Runaround Hsu update: Big bouncing bundles of cash

It’s looking like the Hillary campaign has been wearing its running Hsus for a while now.

Disgraced fund-raiser Norman Hsu did a lot more than just pump $850,000 into Hillary Clinton’s campaign bank account: He also raised hundreds of thousands of dollars for local, state, and federal candidates who have endorsed Clinton or whose support she courted…

Last fall, as the Nevada governor’s race was heating up, Clinton agreed to help raise money for Democrat Dina Titus, a prominent party leader in a state that holds a key early presidential caucus. Clinton arranged for Hsu, at the time a little-known New York apparel executive with no apparent reason to take interest in Nevada politics, to give Titus $5,000 on Nov. 3, according to a person with knowledge of Clinton’s fund-raising.

And in February, when former Iowa governor Tom Vilsack ended his own White House bid, he was about $450,000 in the red. A month after dropping out, Vilsack endorsed Clinton, and Clinton agreed to help him retire his debts. (Both insisted there was no quid pro quo.)

Over the next few months, some of Clinton’s biggest fund-raisers gave Vilsack checks, including Hsu, who kicked in the maximum allowable contribution, $2,300, on May 3 after attending an event organized by Clinton’s campaign, Newsweek reported this month. An associate of Hsu’s, Paul Su, chipped in $1,000 on the same day.

In other cases, Clinton helped direct Hsu’s money to influential politicians who have yet to endorse her but hail from key presidential primary states. Clinton raised at least $6,000 from Hsu and his network last year for Governor John Lynch of New Hampshire, according to Lynch aides. Lynch has no plans to endorse anyone before the state’s crucial January primary, aides said.

The story points out that there’s nothing illegal about steering donations to other candidates, but the Hillary campaign’s conduct raises legitimate questions about just how much it coordinated its activities, endorsements and so forth with moneyman Hsu. And in turn, just how much the campaign actually knew about him. As a wanted fugitive, Hsu’s name should have come up in any background checks conducted by the Secret Service. And a California businessman claims that he warned the Hillary campaign three times about Hsu’s investment schemes.

Irvine, Calif., businessman Jack Cassidy told the FBI that he sent at least three e-mails to a Clinton campaign official on the West Coast this summer, specifically raising concerns that Hsu was engaged in a risky investment scheme and was using Hillary Clinton’s name “in vain” to solicit people for his business proposition, according to a person directly familiar with the matter.

Cassidy’s concern was that Hsu was using the Clintons to give credence to his business venture, the source said, speaking only on the condition of anonymity because of the ongoing FBI inquiry.

We now know that Hsu was using his connection to Democrats like Clinton to bolster his credibility with potential investors, whose cash he would turn around and use in his massive Ponzi scheme. So it seems to have worked this way: To Democrats, Hsu delivers and directs money while using his business contacts as references, while to his business contacts, he used his connections with the likes of Clinton and Obama to bolster his credibility with them. This helped him raise money from the business investors to fuel the Ponzi scheme and to keep up the donations to the Democrats.

It’s not just Hsu’s connections to the Clinton campaign that may be a problem here. If Clinton wins in 2008, she’ll get to choose a cabinet. That cabinet may be full of dirty Hsus.

And at least some of the $17,000 that Governor Jennifer Granholm of Michigan collected from Hsu and his associates in 2005 and 2006 stems from a Nov. 29, 2005, fund-raising reception for her hosted by Steven Rattner, a New York investment firm executive and major Clinton donor seen as a candidate for US Treasury secretary if Clinton wins. Granholm’s office said she has not made an endorsement decision.

We’re talking about millions of dollars that went almost exclusively to Democrats, and that was apparently coordinated through the Hillary Clinton campaign to candidates that she favored and/or wanted to endorse her.

And her campaign had been warned that Hsu, who has since that time confessed to running a gigantic Ponzi scheme, was dirty.

So just what did the Hillary Clinton campaign know about Norman Hsu, and when did they know it?

By the way, Hsu is now facing additional criminal charges in NY State.

Federal prosecutors in New York unsealed a separate criminal complaint against Hsu on Thursday, charging him with breaking campaign finance laws by giving to Clinton and other candidates in other people’s names and with running a “massive” Ponzi scheme to defraud investors out of more than $60 million.

Hsus just keep dropping.

Senator Clinton, do you think any of these revelations will have any effect on your campaign?