Pantsuit Returning $850,000 of Hsu Funny Money

The Clintons must realize this scandal could quickly mushroom, and are hustling to distance themselves from the tainted Norman Hsu megabucks.

Just imagine what they might do if the media paid one-tenth the amount of attention to this as they did to the hapless Larry Craig.

I'd like to know how many other shady donors they've received money from.

Still now, after two weeks, not a single Democrat presidential candidate has mentioned this scnadal.

Obviously, they're very afraid.

The timing of this announcement is a bit suspicious, to say the least, coming after the Petraeus testimony today and just as we're about to enter the 9/11 anniversary news cycle. Just like the old Clinton scandal days, with the 6 pm Friday document drops.

Clinton to return $850,000 raised by Hsu

WASHINGTON - Sen. Hillary Rodham Clinton's presidential campaign said Monday it will return $850,000 in donations raised by Democratic fundraiser Norman Hsu, who is under federal investigation for allegedly violating election laws.

Clinton, D-N.Y., previously had planned only to give to charity $23,000 she received from Hsu for her presidential and senatorial campaigns and to her political action committee, HillPac.

The FBI is investigating whether Hsu paid so-called straw donors to send campaign contributions to Clinton and other candidates, a law enforcement official said Monday.

"In light of recent events and allegations that Mr. Norman Hsu engaged in an illegal investment scheme, we have decided out of an abundance of caution to return the money he raised for our campaign," Clinton spokesman Howard Wolfson said in a statement Monday night. "An estimated 260 donors this week will receive refunds totaling approximately $850,000 from the campaign."

Wolfson said the Clinton campaign also will vigorously review its fundraisers, including thorough criminal background checks, in the future. "In any instances where a source of a bundler's income is in question, the campaign will take affirmative steps to verify its origin," he said.

Ah, Howard Wolfson. Funny, he wasn't being so contrite when this scandal first broke.

A Clinton campaign spokesman, Howard Wolfson, said in an email: "Norman Hsu is a longtime and generous supporter of the Democratic party and its candidates, including Senator Clinton. During Mr. Hsu's many years of active participation in the political process, there has been no question about his integrity or his commitment to playing by the rules, and we have absolutely no reason to call his contributions into question."

Would you like to take that one back now, Howie?

Questions still linger. Such as, where did the money come from?

Federal authorities are looking into whether Hsu leaned on investors to contribute to political candidates after paying them big earnings from a shady business venture he was running, the law enforcement official said. Such a scam — using conduit contributors known as straw donors — is a violation of the Federal Election Campaign Act, which limits how much money individuals can give to candidates and political committees.

The FBI may be looking at other potential charges as well, according to the law enforcement official who spoke on condition of anonymity because of the ongoing investigation.

In addition to the $260,000 he contributed to federal candidates, Hsu also contributed at least $330,000 to state Democratic candidates and state party committees and ballot initiatives during the 2004 and 2006 election cycles. Among the state officials who received money were New York Gov. Eliot Spitzer and New York Attorney General Andrew Cuomo. Both have said they would divest their campaigns of the donations.

UPDATE: More from Allahpundit, Suitably Flip, Blue Crab Boulevard.