Fugitive Dem donor busted in Grand Junction

Alan Gathright and Tillie Fong, Rocky Mountain News

Published September 8, 2007 at midnight

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Norman Hsu, the fugitive Democratic fundraiser who jumped a $2 million bail and skipped a California hearing on a felony theft conviction, was under armed guard at a Grand Junction hospital Friday.

Hsu had been scheduled to appear before a federal magistrate on unlawful flight charges, but FBI spokesman Joseph Schadler said at a news conference in San Francisco that Hsu was not released from the hospital. Hsu was listed in fair condition at the hospital Friday evening.

Once Hsu appears before a magistrate, he would be transferred to federal district court in California, then released to San Mateo County officials to face the felony grand theft charge to which he pleaded no contest in 1992.

It was unclear whether Hsu would fight extradition, Schadler said.

The high-flying political money man was accused of swindling investors out of $1 million in "a Ponzi-type scheme to buy and resell latex gloves that did not exist," according to a statement issued by the California Attorney General’s Office.

Flap over contributions

Hsu’s mounting legal troubles pose embarrassment for Democratic recipients of his campaign contributions, including presidential candidates Hillary Clinton and Barack Obama and Colorado U.S. Rep. Mark Udall, who is running for the Senate.

The growing flap over Hsu’s contributions prompted Democratic presidential candidate Chris Dodd to release a statement Thursday vowing "to refuse to accept or possess campaign contributions raised, solicited, or delivered by fugitives from justice."

Hsu was taken into FBI custody at St. Mary’s Hospital Thursday night after he became ill while riding an Amtrak train that stopped in Grand Junction en route to Denver.

Why he was bound for the Mile High City remains a mystery.

"He remains in fair condition," hospital spokesman Dan Prinster said Friday morning.

Prinster declined to provide details of Hsu’s ailment, other than to say Hsu "was delirious (when he arrived) and had identification."

Hsu, however, "walked out of the train on his own" after fire paramedics were called to the Amtrak station in downtown Grand Junction about 11 a.m. Thursday, Battalion Chief Robert Ferguson told The (Grand Junction) Daily Sentinel.

FBI agents arrived at the hospital about 7 Thursday night, Prinster said, adding he didn’t know how authorities learned of Hsu’s whereabouts. "All I know is I got a call," he said.

Prinster said the FBI is working with the Mesa County Sheriff’s Department to make sure there is a guard posted outside the fundraiser’s room, but it was unclear how long Hsu would be hospitalized.

Mesa County sheriff’s spokeswoman Heather Benjamin said that under normal procedure, Hsu would be booked into the local jail when he is released.

Skipped bail hearing

Hsu had been scheduled to appear Wednesday at a bail reduction hearing in San Mateo County Superior Court in Redwood City, Calif.

He was to turn over his passport to the court and was expected to request a reduction of the $2 million bail he posted last week.

He had turned himself a week ago after spending 15 years on the lam for a felony theft conviction in 1992. California attorney general spokesman Gareth Lacy said Hsu’s attorneys told prosecutors Hsu arrived by charter jet at the Oakland, Calif., airport about 5:30 a.m. Wednesday local time and then wasn’t heard from again.

When it became apparent Hsu had fled the state, California authorities sought the assistance of the FBI, whose agents arrested him Thursday night on charges of unlawful flight to avoid prosecution, Schadler said.

Hsu’s downfall is giving headaches to elected leaders who took his tainted money.

Pennsylvania Gov. Ed Rendell is the latest of many Democratic politicians to return or donate Hsu’s election contributions to charity.

Rendell had said last week he planned to keep nearly $40,000 of Hsu’s money even though he was wanted for failing to appear for sentencing after pleading no contest to bilking investors out of $1 million.

"Though Norman is my friend, and remains so, his failure to appear casts a new light on his assertions regarding the original case," Rendell said in a statement before Hsu’s arrest Thursday.

"As a result, I will follow other elected officials and donate the money he contributed to me to charity."

Turning over donations

Clinton has said she plans to give to charity the $23,000 in donations she received from Hsu for her presidential and Senate campaigns and to her political action committee, HillPac.

Clinton told The New York Times last week that news of Hsu’s criminal problems was "a big surprise to everybody."

Obama planned to give away $7,000 that Hsu contributed to his committees, the Times reported last week.

Hsu also contributed $1,000 to Udall’s Senate campaign.

"The campaign is pleased to hear news of Norman Hsu’s arrest," said Udall’s campaign manager, Mike Melanson. "As with any fugitive, it’s good news that he’s been apprehended and will face justice."

After learning of Hsu’s troubles, Udall donated his contribution to the Colorado National Guard Foundation, Melanson said.

Hsu has said he believed he had resolved his legal issues, but that he would halt his work raising political money.

Prosecutors say Hsu bilked investors out of $1 million by telling them he had a contract to buy and sell latex gloves, but he never purchased the gloves and had no contract to sell them.

The Associated Press contributed to this report.

The Associated Press Contributed to this report.

gathrighta@RockyMountainNews.com or 303-954-5486.

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