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Clinton vows 'vigilance' in accepting funds

Democrats donate money raised by fugitive from law

Norman Hsu, with Hillary Clinton at a 2005 fund-raiser, said he will stop raising money until his legal issues are resolved. Norman Hsu, with Hillary Clinton at a 2005 fund-raiser, said he will stop raising money until his legal issues are resolved. (stephen schwartz photo)

As Democratic politicians raced to shed contributions from a wealthy fund-raiser who turned out to be a fugitive from the law, Hillary Clinton said yesterday that her presidential campaign will be more careful about scrutinizing donors.

Norman Hsu, who has donated large sums to numerous Democrats including Clinton and Barack Obama, has been wanted by California authorities for 15 years in connection with a fraud case.

"We have a vetting process," Clinton said in a telephone interview. "It didn't work on this one instance, apparently, for any of us. There were many, many people receiving his contributions, but nobody knew there was an issue."

"Obviously, we will increase our vigilance," she added.

Clinton's campaign said Wednesday that it will give $23,000 it received from Hsu to charity. The money included contributions to Clinton's presidential campaign, her US Senate reelection, and her political action committee.

Hsu had been scheduled to host a major fund-raiser for Clinton next month.

Clinton also told the Globe that the campaign would return any of the contributions that Hsu raised from other donors if they turned out to be tainted.

Clinton acted after the Los Angeles Times reported Wednesday that Hsu faced an arrest warrant in connection with a 1991 fraud case.

He agreed to serve three years in prison after pleading no contest to grand theft, but then disappeared.

The Wall Street Journal reported Tuesday that a San Francisco family's contribution patterns closely tracked Hsu's, suggesting that he may have directed their donations. The Paw family appears to be of modest means, headed by a mail carrier and a homemaker who own a gift shop, yet six family members have donated a total of $200,000 to Clinton since 2005, the Journal reported.

Obama is returning $2,000 that Hsu donated to his Illinois Senate race and $5,000 that went to his political action committee. And Obama's staff wrote a letter to the Paw family asking them to affirm that they donated their own money and were not contributing on Hsu's behalf, a spokesman said yesterday.

Other Democrats, including US Senators Edward M. Kennedy and John F. Kerry of Massachusetts, are also donating to charity money from Hsu. Kerry is donating about $7,000 to the New England chapter of the Paralyzed Veterans of America.

Federal Election Commission records show that Hsu has donated $260,000 to Democratic Party groups and federal candidates since 2004.

Hsu said Wednesday that he had been unaware of the arrest warrant, but will stop raising money for candidates until his legal case is resolved, according to the Associated Press.

Marcella Bombardieri can be reached at bombardieri@ globe.com.

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