Controversial donation has State Dems in hot water

National fund-raiser convicted of grand theft gave money to Tennessee Democrats

Email | Print By Ken Whitehouse

While most of the political universe last week watched the career of Idaho Republican Senator Larry Craig go up in a big bang, Democrats stayed silent at the national level as they are weathering a scandal of their own, one that touches Tennessee politics.

Democratic fund-raiser Norman Hsu, a native of Hong Kong and resident of New York City, was arrested in California. A prominent rainmaker for Democratic causes all across the country, Hsu, 56, was wanted by California authorities for failing to appear in court in 1992 after pleading guilty to a single count of grand theft.

According to the the San Francisco Chronicle, "The case involved what a prosecutor described as a Ponzi scheme in which he defrauded investors of more than $1 million. Prosecutors believed Hsu had fled to his native Hong Kong."

What ties Hsu to Democrats in Tennessee is that he donated $38,000 to the Tennessee Democratic Party in 2006 and over $4,000 to Democratic Senate candidate Harold Ford, Jr. Nationally, Hsu has been a major contributor to the campaigns of Senators Hillary Clinton and Barack Obama.

When news of the scandal broke, Clinton, Obama, and a myriad of other politicians who recently received money from Hsu began donating money they got from Hsu to various charities. Not so in Tennessee.

When contacted by NashvillePost.com this morning about the fund raiser, Tennessee Democratic Party spokesman Wade Munday said, "The contributions were received, properly disclosed and utilized during the previous election cycle."

When asked if state Democrats planned to donate money to charity or return it to Hsu, Munday stated, "The party utilized that money in the last cycle, and now we are moving ahead."

According to federal campaign financial disclosure documents, Hsu's last contribution to Tennessee Democrats was in October of 2006. When asked if either he or state Democratic chairman Gray Sasser had ever met Hsu, Munday said that neither he nor Sasser, who took over as party chairman in February of this year, had ever met or spoken to the man.

Appearing this morning on the conservative talk show hosted by radio personality Steve Gill, former Democratic Senate candidate Harold Ford, Jr. acknowledged that he had met Hsu but that he had already closed his campaign account. Ford said that like most other politicians, he was unaware of Hsu's legal troubles at the time of his campaign.