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Political donor skips day in court

Times Staff Writers

The event unfolded like the judicial equivalent of a bride left at the altar.

The mysterious political donor and fundraiser Norman Hsu was scheduled to appear in San Mateo County Superior Court on Wednesday to begin dealing with the fact that 15 years ago, he pleaded no contest to felony fraud charges and agreed to spend as long as three years in prison and then disappeared.

But on Wednesday, instead of appearing in court and beginning to shed light on his affairs, Hsu again vanished, standing up Superior Court Judge Robert D. Foiles, Deputy Atty. Gen. Ralph Sivilla, San Francisco defense attorney James J. Brosnahan and two crisis-management executives -- not to mention leaving behind $2 million in cash bail.

His failure to appear, echoing the events of 1992, was a shock not just to the court, but reverberated in the upper levels of Democratic politics, especially the presidential campaign of Sen. Hillary Rodham Clinton of New York.

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Hsu has given directly to her and raised hundreds of thousands of dollars from others whose contributions he solicited and bundled together.

The Superior Court hearing, which was to consider a request to cut Hsu’s bail in half and other matters, was expected to clarify Hsu’s background and activities since 1992. And it seemed to begin routinely in Foiles’ wood-paneled courtroom, though the judge announced he had received a call saying Hsu would be 10 minutes late.

Minutes later, Brosnahan, along with another lawyer and two executives from a crisis communications firm, appeared in the courtroom, minus Hsu.

Brosnahan asked to confer with Sivilla in the hallway. Trailed by a gaggle of reporters, the lawyers talked privately for several minutes. Then Brosnahan asked to speak with the judge in chambers.

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Six minutes later, back in the courtroom, Brosnahan announced in matter-of-fact tones that he did not know “Mr. Hsu’s current whereabouts.”

“We don’t know where he is,” Brosnahan said, adding that he hoped he would appear.

Foiles issued a bench warrant for Hsu’s arrest and said that if he returned, he would be held without bail.

Hsu had also been expected to surrender his passport at the hearing, but Brosnahan told the court he was unable to produce the document.

Brosnahan said Hsu had said the passport could be found in his New York condo, but that a 90-minute search by a law clerk from Brosnahan’s firm, Morrison & Foerster, failed to locate it.

Outside court, Brosnahan repeated: “Mr. Hsu is not here and we don’t know where Mr. Hsu is. . . . We expected him to be here.”

After the hearing, Sivilla said that Hsu held a U.S. passport, but that he was not sure whether Hsu was in the country. “I would imagine he has the capability” of fleeing the United States, Sivilla said. “We don’t know if he has his passport.”

Hsu, a Hong Kong native, is believed to have returned there when he fled the first time.

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Multiple sources said he has described himself as a producer of knockoffs of high-end clothing.

He reportedly bought designer suits and accessories for duplication in China and resale in the United States, though concrete evidence of his business affairs has proved difficult to find.

“We believed the amount of bail was appropriate,” Sivilla said, adding that Hsu’s failure to appear was “disappointing.”

“There are some things in motion,” Sivilla said when asked about what authorities were doing to find Hsu.

But when asked whether they had leads regarding Hsu’s location, Sivilla said: “I wish that were true.”

With offices in Los Angeles and New York, the crisis communications firm of Sitrick and Co. is a prominent player. Its slogan is: “If you don’t tell your story, someone else will tell it for you.” On Wednesday, however, Sitrick spokesmen refused to discuss Hsu.

Federal investigators are looking into Hsu’s fundraising -- Democratic candidates in national, state and local contests have received his support -- and the possibility that he may have reimbursed some donors; reimbursing campaign contributors is a violation of federal law.

The fact that Hsu was a fugitive from a felony fraud charge growing out of a $1-million Ponzi scheme, which was first disclosed by The Times, sent shivers through Democratic political circles as well as such institutions as the New School in New York, on whose board Hsu served.

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Some at first defended Hsu, then said they would or might return his contributions or donate them to charity.

Hsu claimed his legal problems arose from misunderstandings over a failed business venture. He denied intentionally skipping the 1992 court hearing or realizing he had pleaded no contest to a felony.

Wednesday, however, as news spread that Hsu had again failed to appear in court, politicians and others who had benefited from his largesse adopted a more guarded tone.

Howard Wolfson, a spokesman for the Clinton campaign, said in a statement: “We believe that Mr. Hsu, like any individual who has obligations before the court, should be meeting them, and he should do so now.”

Hsu has generated hundreds of thousands of dollars in donations for Clinton’s presidential campaign.

Hsu earned the title of “HillRaiser” for pledging to raise more than $100,000 for Clinton’s presidential campaign.

The Clinton campaign has said it will give $23,000 in direct donations from Hsu to charity, but keep the money he bundled. Wolfson declined to release the names of bundled donors. He said that the campaign had not been contacted by the FBI about Hsu’s fundraising.

Public Citizen, a Washington watchdog group that has pushed presidential candidates to identify bundlers and the money they bring in, urged Clinton to at least disclose which donations were tied to Hsu.

“She should say who they are,” said Taylor Lincoln, research director for the group’s Congress Watch division. “If she really wanted to be a standard-bearer, she should return all the money.”

Hsu’s disappearance stunned many of those who had defended him, including former Sen. Bob Kerrey (D-Neb.), president of the New School. Kerrey had recruited Hsu to join the school’s board of directors and, even after his past was revealed last week, called him an exemplary member.

On Wednesday, Kerrey expressed bafflement and dismay.

“There’s a lot more there than I thought,” he said. “Obviously, there’s a lot about him I didn’t know.”

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dan.morain@latimes.com

chuck.neubauer@latimes.com

robin.fields@latimes.com


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