Hsu and the Democrats
There is evidence that suggest an elaborate fraud by Mr. Hsu and the likely use of straw men donors in bundled donations to various campaigns including the Clinton campaign.
This is something that cannot be fixed by donating the tainted money to charity or returning funds to potential straw men donors who were participants in the scheme. If the money was originally taken under false pretense as is suggested by the lawyer for a man who invested $40 million with Mr. Hsu, then the disgorged money is something his client has a claim on.
The Democrats who received direct and bundled donations from Hsu should place all of those funds in an escrow account that would be tendered to a court to appoint a trustee to determine who the rightful owner is. If any of the donations were legitimate then they can be returned to the appropriate campaign. If they were not, then the funds should be returned to their rightful owner.
The FBI and the Federal Election Commission should investigate these donations concurrently with the trustee and the trustee should turn over the results of his investigation to the regulatory and law enforcement agencies.
While I initially thought the Clinton decision to return the funds to the bundled donors made sense, the new information suggest it would be a mistake to give those funds to people who may have participated in a fraudulent transaction. In fact it would compound the problem
While some may suggest that the campaigns knew that Mr. Hsu was not legitimate, there is another possibility that should be of even more concern politically. It is likely that Mr. Hsu was using his relationship with the candidates and the photos with them to give his "investors" the impression that his business was successful. In other words they may have been props in a scheme to defraud. For people seeking high office to be taken in by such a scheme raises serious questions about their judgment. Those questions will all have to be answered as the campaign goes forward. The questions will also have to be answered by people who won elections with this money.
The Belmont Club looks for explanations for Hsu's conduct now that it appears the money was not of foreign origin. I still believe the politicians were probably props in his scam. That makes it all the more ironic when fraud buster Attorney General of New York, Elliot Spitzer's campaign benefited from the scam.
This is something that cannot be fixed by donating the tainted money to charity or returning funds to potential straw men donors who were participants in the scheme. If the money was originally taken under false pretense as is suggested by the lawyer for a man who invested $40 million with Mr. Hsu, then the disgorged money is something his client has a claim on.
The Democrats who received direct and bundled donations from Hsu should place all of those funds in an escrow account that would be tendered to a court to appoint a trustee to determine who the rightful owner is. If any of the donations were legitimate then they can be returned to the appropriate campaign. If they were not, then the funds should be returned to their rightful owner.
The FBI and the Federal Election Commission should investigate these donations concurrently with the trustee and the trustee should turn over the results of his investigation to the regulatory and law enforcement agencies.
While I initially thought the Clinton decision to return the funds to the bundled donors made sense, the new information suggest it would be a mistake to give those funds to people who may have participated in a fraudulent transaction. In fact it would compound the problem
While some may suggest that the campaigns knew that Mr. Hsu was not legitimate, there is another possibility that should be of even more concern politically. It is likely that Mr. Hsu was using his relationship with the candidates and the photos with them to give his "investors" the impression that his business was successful. In other words they may have been props in a scheme to defraud. For people seeking high office to be taken in by such a scheme raises serious questions about their judgment. Those questions will all have to be answered as the campaign goes forward. The questions will also have to be answered by people who won elections with this money.
The Belmont Club looks for explanations for Hsu's conduct now that it appears the money was not of foreign origin. I still believe the politicians were probably props in his scam. That makes it all the more ironic when fraud buster Attorney General of New York, Elliot Spitzer's campaign benefited from the scam.
Comments
Post a Comment