Rendell gives away fugitive's donations

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HARRISBURG -- For two weeks, Democratic Gov. Ed Rendell stood by big-time political fund-raiser Norman Hsu, insisting the fugitive California businessman is still his friend and going so far as to call him "one of the best 10 people I've met."

But there are limits even to Mr. Rendell's political loyalty. Faced with Mr. Hsu's failure to show up in a California courtroom for a hearing this week -- after being sought by California authorities for the last 15 years -- Mr. Rendell altered his stance yesterday and put a little distance between himself and the rainmaker, who was arrested by the FBI last night in Grand Junction, Colo.

Mr. Rendell issued a statement saying he was "disappointed" that Mr. Hsu, who pleaded no contest in 1991 to charges of bilking investors in the late 1980s, didn't go to the bail-reduction hearing.

As a result, Mr. Rendell joined a number of other high-profile Democrats, including presidential candidate Hillary Clinton and U.S. Sens. Edward Kennedy, John Kerry, Barbara Boxer and Dianne Feinstein, and gave nearly $38,000 in campaign donations from Mr. Hsu to charity.

"Though Norman is my friend and remains so, his failure to appear casts a new light on his assertions regarding the original [fraud] case," said Mr. Rendell, a former Philadelphia district attorney. "As a result I will follow other elected officials and donate the money he contributed to me to charity."

He didn't say which charity or charities will benefit. His press secretary, Chuck Ardo, said later that the governor won't seek tax benefits from the donation.

Mr. Rendell said he wasn't giving the money away because of criticism he'd received from some Pennsylvania Republicans or because of "the media feeding frenzy" surrounding the Hsu case.

Mr. Rendell got the donations from Mr. Hsu in 2005 and 2006, but said, "It was never about the money. It's about standing up for one of the principles of our judicial system -- that a person is presumed innocent until proven guilty."

Mr. Hsu pleaded no contest in 1991 to a single felony count of grand theft, based on his taking $1 million from investors by falsely claiming he had a contract to import latex gloves. He faced up to three years in jail but didn't show up for his 1992 sentencing hearing and has been absent from California ever since.

When he failed to show up in court this week, a California judge ordered his $2 million bail forfeited, issued a new arrest warrant and said Mr. Hsu would be jailed without bail if he is found.

House Republican leader Sam Smith of Punxsutawney on Wednesday had urged the governor to give the $38,000 back to victimized investors.

"Gov. Rendell should do the right thing and help the original victims of Mr. Hsu's alleged crime," said Mr. Smith. He said the governor's loyalty to Mr. Hsu was "misplaced stubbornness."

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

According to an Associated Press story, the governor said last week that Mr. Hsu had "never asked for a bloody thing -- not a job, not a contract," in exchange for his donations. Mr. Rendell also had said that "making him out to be some sort of major criminal is absurd."

State Republican Chairman Bob Gleason also called on the governor to cut his ties with Mr. Hsu. "I find it sad that he continues to be so loyal to this criminal," Mr. Gleason said. "Gov. Ed Rendell should not be using illegal money to help get Democrats elected."

Mr. Gleason said he considered Mr. Hsu's plea of no contest to the theft charge "to be a clear admission of guilt."

As for giving the Hsu money back to the victims, Rendell aide Mr. Ardo said, "Clearly the Republican state leadership would take any opportunity to score political points, even if the play is out of bounds."

He said Mr. Rendell can't give the money directly back to Mr. Hsu because "how would he know where he is?''

Mr. Ardo said that a civil suit against Mr. Hsu, stemming from the latex glove case, was recently settled, and perhaps Mr. Hsu mistakenly thought "that that settlement also settled the criminal case."


The Associated Press contributed. Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.


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