Rendell: Don't rush to judge fund-raiser

A prominent Democratic fund-raiser with a criminal past surrendered to California authorities yesterday as nearly every politician he has helped rushed to disavow him - except Gov. Rendell.

The governor said he would wait to see if Norman Hsu's 1991 fraud conviction was upheld before divesting nearly $40,000 in campaign cash the apparel executive raised for him.

"I think this whole thing stinks," Rendell said in a telephone interview. "If this conviction stands I will give the money back, but this idea of making him out to be some sort of major criminal is absurd."

Rendell said he had talked to Hsu two days ago, at a time when the businessman was still regarded as a fugitive.

Rendell said Hsu "apologized for any embarrassment he caused me. I said, 'Norman, you didn't cause me embarrassment. . . . I wish you the best of luck.' "

The firestorm over Hsu has unsettled the race for the Democratic nomination for president for several days, forcing the front-runner, Sen. Hillary Clinton of New York, to return $23,000 that Hsu donated to her campaign and a political-action committee.

A San Mateo County, Calif., judge ordered Hsu handcuffed and held on $2 million bail as he turned himself in yesterday after being wanted for more than 15 years. Hsu later posted the bail, and his attorney said the money could be used to pay restitution in the case.

Hsu faced up to three years in prison when he failed to appear for sentencing in 1992. He pleaded no contest to a charge of felony grand theft in 1991, on charges he had defrauded investors in a bogus business of $1 million.

"He is a man who has proved himself to be of good character," Rendell said yesterday, adding that he had socialized with Hsu about 15 to 20 times over the years. He said he met Hsu "through my work" as chairman of the Democratic National Committee in 2000.

Rendell received $37,866 from Hsu during 2005 and 2006, according to state campaign-finance records. Pennsylvania does not limit the size of contributions.

Early in his political career, in December 1977, Rendell appeared to have a different standard when a financial supporter got in legal trouble.

Then the Philadelphia district attorney-elect, Rendell immediately returned a loan and a contribution to his campaign from a man, Philip Milestone, who had been indicted on charges of bribing FBI agents.

"Holy Christ!" Rendell said when told of the indictment, which came well after Milestone's loan. "The loan still looks bad," Rendell said at the time. "It has the appearance of impropriety."

The difference in the cases, he said yesterday, was "I didn't know Milestone and I do know Mr. Hsu."

The $10,000 loan was signed by Milestone and two Philadelphia construction union leaders, Thomas J. Magrann and John McCullough, who was later gunned down in a mob hit.

Dozens of prominent Democratic politicians have returned or donated to charity money raised by Hsu, including U.S. Sen. Bob Casey Jr. (D., Pa.) and Democratic U.S. Reps. Joe Sestak and Patrick Murphy of suburban Philadelphia.

Michael Young, a former Penn State professor who has tracked Pennsylvania politics for three decades, said Rendell was violating one of the tenets of Politics 101: When a donor is accused of a crime, "stand up, disavow the contribution, and move on."

Young believes that since his reelection last year, Rendell has been determined not to be a "cookie cutter" politician.

"He is less inclined to evaluate the political cost of what he does," Young said. "He is increasingly disinclined to simply be a knee-jerk politician."

Rendell said his campaign and others can scan political donors with Google and look up their contribution histories in databases, but do not have access to criminal records and thus had no way of knowing of Hsu's trouble.

Of all the contributors to his campaigns, Hsu "is one of the best people in terms of caring about substantive [public] policy and caring for me as an individual," Rendell said.

They have been good enough friends that Rendell remembered having a lunch near the University of Pennsylvania campus with Hsu and his son, Oliver, who graduated from Penn two years ago. Rendell is a Penn graduate, as is Norman Hsu.

Hsu has said he thought that the fraud charges had been taken care of when he declared bankruptcy and had no idea he was wanted on criminal charges.

"He thought this was part of a civil settlement," Rendell said.

He also said that creditors often use the criminal justice system to collect debts by persuading prosecutors to file charges. "Let's not prejudge him [Hsu]," Rendell said.

In a statement, Hsu's San Francisco-based attorney, Jim Brosnahan, said that the case was "moving toward resolution." Hsu's bail money can be used to pay restitution to any fraud victims who have not been reimbursed, Brosnahan said.

Speaking as a former district attorney, Rendell blasted the California authorities. "When we were after a major criminal who fled, we would have captured him 17 different ways by now," he said. After all, Hsu moved in elite political circles and was on the invitations to gala fund-raisers - including several in California - as well as being mentioned on campaign-finance reports.

"It's a little disingenuous for California to say this is a major criminal," Rendell said.