Justice Department, SEC Probe Investments Linked to Democratic Fund-Raiser Hsu

Wall Street Journal ^

[Sub-Driver]

Justice Department, SEC Probe Investments Linked to Democratic Fund-Raiser Hsu By IANTHE JEANNE DUGAN and KARA SCANNELL September 19, 2007; Page A3

The Justice Department and the Securities and Exchange Commission are investigating investments associated with prominent Democratic fund-raiser Norman Hsu, people familiar with the matter said.

The SEC started its preliminary investigation after a Wall Street Journal article last week said a New York fund couldn't account for $40 million it had invested with Mr. Hsu. Both agencies also are investigating losses reported by others who have invested with Mr. Hsu, including a complaint from investors in California who claim they are missing more than $30 million.

A lawyer for Mr. Hsu couldn't be reached for comment, and a spokesman had no comment.

Mr. Hsu, one of the most generous donors to Democratic political candidates, rose to national prominence in recent weeks after news reports raised questions about his fund raising and his past brushes with the law. He is credited with pouring more than $1 million into the coffers of Hillary Clinton and other politicians. Many recipients say they will donate Mr. Hsu's contributions to charity. Mrs. Clinton's campaign says it will return money to donors who gave via Mr. Hsu.

Mr. Hsu also is under investigation by federal prosecutors for potential violations of federal election laws.

The latest probes center on a case also being looked into by the Manhattan district attorney's office. Two weeks ago, Source Financing Investors, a fund started by Joel Rosenman, a founder of the Woodstock music festival, told the district attorney's office it was concerned about $40 million it gave recently to Mr. Hsu to invest in 37 deals, its partners told investors last week.

[kittymyrib]

The Dems will hold the appointment of the new Attorney Gen. hostage until this investigation is abandoned. Count on it.

[pieceofthepuzzle]

“The Dems will hold the appointment of the new Attorney Gen. hostage until this investigation is abandoned. Count on it.”

Then the Republicans should encourage this link and exploit it such that the AG story can’t be brought up in the MSM without also discussing Hsu. Republicans need to learn how to counterpunch and to use talking points just like the dems.

[Neverforget01]

$70 Million??? No wonder this guy tried to kill himself.

[BARLF]

The Dems will hold the appointment of the new Attorney Gen. hostage until this investigation is abandoned

That might not be a bad thing. Take a look at Paul D. Clements.

http://www.usdoj.gov/osg/aboutosg/paul_d_clementbio.htm

[Free State Four]

Then the Republicans should encourage this link and exploit it

Exactly. The Justice Department will continue day-to-day operations. It is full of permanent employees. Keep Hsu's name in the headlines and the Dem's obstruction in the minds of voters.

[Eroteme]

Then the Republicans should encourage this link and exploit it such that the AG story can’t be brought up in the MSM without also discussing Hsu. Republicans need to learn how to counterpunch and to use talking points just like the dems.

Amen. We could use a little more of that positive, productive attitude around here.

When we expect nothing, we get nothing. We must not only expect it, we must demand it. And if they can't figure out how to do it, we show them. Over and over and over.

However true it may be that nothing will come of it if left to lazy, compromised, or weak-willed, entrenched bureaucrats, it is ridiculous to wave the white flag for them.

[Liz]

ping

[pieceofthepuzzle]

“However true it may be that nothing will come of it if left to lazy, compromised, or weak-willed, entrenched bureaucrats, it is ridiculous to wave the white flag for them.”

Very well stated!

[Unicorn]

BTTT

[Eroteme]

Get a load of this spin: Hsu meant to attend that hearing, but may have accidentally boarded the Amtrak train headed out of state rather than a Bay Area Rapid Transit train, his spokesman Jason Booth said late Tuesday.

"That's what appears to be how it happened," Booth said. "He was disoriented at the time. ... We believe he suffered a psychological, mental, or physical breakdown. How that was caused I don't know. I'm not a doctor."

Jason Booth works for a high-powered crisis management firm. Making up stuff is part of his job. You'd think he could do better than, "oops wrong train."

Norman Hsu, with his supposed MBA from Wharton, managed to get to the Amtrak station and BUY the ticket, but could neither read it or understand it. He couldn't read the dozens of AMTRAK signs around him, could not decipher the words DENVER/CHICAGO at the ticket area, boarding area, or train gate. His sudden mental illness also left him deaf, unable to hear the departure announcements blaring over the PA, then rendered incapable of using his cell phone once aboard the train for hours watching mountains go by--either to dial or answer it. (You DID call him, didn't you Jason?)

Besides, who in hell believes a guy who posts a $2M cash bond and charters a private plane to CA would then hop a rapid transit bus by himself for the rest of the trip? ROFL.

[tiger640]

Please excuse if someone else has answered this question (and I’m sure they have) but...

In their rush to give away all this money to charity, aren’t the Dems just a tad guilty of obstruction of justice? If it turns out that this money is part of fund investors losses through fraud, to the tune of $70 Mil, then how the heck can they possible justify giving this dirty money to charity or back to the bundled donors? How about putting ALL this money in the custody of the DOJ or in some kind of escrow acct until this thing can be sorted out? There should be a freeze on all this money until this investigation is complete. Yet I have heard NO ONE say that they are filing for an injunction on it. Not only that, but Hillary is refusing to release the names of the donors she is supposedly returning this money to. WTF?

Isn’t it like saying you are going to get rid of stolen goods that you got from unknown sources (fences) by donating it to charity? How is this different? Is it legal??? NOT!!!

Just a thought.

[Presbyterian Reporter]

Be sure to check out the great research being done by Suitably Flip.

http://suitablyflip.blogs.com/suitably_flip/2007/09/hsu-recobbled.html

[Dad yer funny]

really good , .. Suitably Flip , in my faves list

{{ btw , .. sure would be nice if SEC/JusticeDep would talk to FEC folks , .. I can dream , OK? }}

[Eroteme]

Such a good point. No one has filed an injunction to freeze the funds. The dog that didn't bark.

Why wouldm't Rosenman do that? 40 mil fleeced from his company, his investors. It's his reputation. He brought these people in on the weight of his reputation, and he had a fiduciary duty to them.

A man of Rosenman's financial experience simply does not overlook basic due diligence. He's spent 35 years reviewing and vetting business venture proposals, and he doesn't recognize the red flags flying around the room? Does the man not own a phone? A few calls (which he's plenty connected to do) would have established what Women's Wear Daily printed today, less than a week after Rosenman's story came to light: that nobaody at Prada had ever heard of Hsu, they do not manufacture their products in China, and have no intent of ever doing so.

At present, the most benign reading of Rosenman and Cheng's behavior in this is that they were so beguiled by the 40% profits Hsu dangled, they didn't care if it was legit. Don't ask, don't tell. A more realistic reading would be that Rosenman and Cheng were much more complicit than they pretend.