Caring for Hillary: unlikely sources of cash

http://online.wsj.com/article/SB118826947048110677.html?mod=hpp_us_whats_news

[rquoter]
Six members of the Paw family list this house in Daly City, Calif., as their address.



Big Source of Clinton's Cash
Is an Unlikely Address
Family's Donations
Closely Track Those
Of Top Fund-Raiser
By BRODY MULLINS
August 28, 2007; Page A3

DALY CITY, Calif. -- One of the biggest sources of political donations to Hillary Rodham Clinton is a tiny, lime-green bungalow that lies under the flight path from San Francisco International Airport.

Six members of the Paw family, each listing the house at 41 Shelbourne Ave. as their residence, have donated a combined $45,000 to the Democratic senator from New York since 2005, for her presidential campaign, her Senate re-election last year and her political action committee. In all, the six Paws have donated a total of $200,000 to Democratic candidates since 2005, election records show.

That total ranks the house with residences in Greenwich, Conn., and Manhattan's Upper East Side among the top addresses to donate to the Democratic presidential front-runner over the past two years, according to an analysis by The Wall Street Journal of donations listed with the Federal Election Commission.

It isn't obvious how the Paw family is able to afford such political largess. Records show they own a gift shop and live in a 1,280-square-foot house that they recently refinanced for $270,000. William Paw, the 64-year-old head of the household, is a mail carrier with the U.S. Postal Service who earns about $49,000 a year, according to a union representative. Alice Paw, also 64, is a homemaker. The couple's grown children have jobs ranging from account manager at a software company to "attendance liaison" at a local public high school. One is listed on campaign records as an executive at a mutual fund.

The Paws' political donations closely track donations made by Norman Hsu, a wealthy New York businessman in the apparel industry who once listed the Paw home as his address, according to public records. Mr. Hsu is one of the top fund-raisers for Mrs. Clinton's presidential campaign. He has hosted or co-hosted some of her most prominent money-raising events.

People who answered the phone and the door at the Paws' residence declined requests for comment last week. In an email last night, one of the Paws' sons, Winkle, said he had sometimes been asked by Mr. Hsu to make contributions, and sometimes he himself had asked family members to donate. But he added: "I have been fortunate in my investments and all of my contributions have been my money."

Mr. Hsu, in an email last night wrote: "I have NEVER asked a single favor from any politician or any charity group. If I am NOT asking favors, why do I have to cheat...I've asked friends and colleagues of mine to give money out of their own pockets and sometimes they have agreed."

Lawrence Barcella, a Washington attorney representing Mr. Hsu, said in a separate email: "You are barking up the wrong tree. There is no factual support for this story and if Mr. Hsu's name was Smith or Jones, I don't believe it would be a story." He didn't elaborate.

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."

Kent Cooper, a former disclosure official with the Federal Election Commission, said the two-year pattern of donations justifies a probe of possible violations of campaign-finance law, which forbid one person from reimbursing another to make contributions.

"There are red lights all over this one," Mr. Cooper said.

There is no public record or indication Mr. Hsu reimbursed the Paw family for their political contributions.

For the 2008 election, individuals can donate a maximum of $4,600 per candidate -- $2,300 for a primary election and $2,300 for a general election -- and a total of $108,200 per election to all federal candidates and national political parties.

In the wake of a 2002 law that set those limits, federal and state regulators and law-enforcement officials said they have seen a spike recently in the number of cases of individuals and companies illegally reimbursing others for campaign donations. Those cases don't necessarily implicate the candidates, who sometimes don't even appear to be aware of such payments executed on their behalf.

The 2002 law also raised penalties for infractions and included the prospect of prison sentences for offenders for the first time. That increased incentives for the FEC and federal prosecutors to investigate and prosecute infractions. Since the law was enacted, the FEC has collected millions of dollars in fines for illegal donations, including its largest-ever penalty, a $3.8 million levy against Freddie Mac last year.

According to public documents, Mr. Hsu once listed his address at the Paw home in Daly City, though it isn't clear if he ever lived there. He now lives in New York, according to campaign-finance records, on which he also lists a half-dozen apparel companies as his employer. In the campaign-finance forms, Mr. Hsu lists his companies as Next Components, Dilini Management, Because Men's Clothes and others.

He is on the board of directors of the New School in New York. News stories in the mid-1980s said he criticized trade policies that made it harder to import goods from China.

Mr. Hsu is also a major fund-raiser for Mrs. Clinton and other Democrats. When Democrats won control of Congress in November, he threw a party at New York City hot spot Buddakan with many prominent party leaders. Press reports said that toward the end of the night, he grabbed the microphone from the deejay and shouted: "If you are supporters of Hillary for President 2008, you can stay. Otherwise, get out."

Mr. Hsu has pledged to raise $100,000 or more for Mrs. Clinton, earning the title of "HillRaiser" along with a few hundred other top financial backers of her campaign. Earlier this year, he co-hosted a fund-raiser that raised $1 million for Mrs. Clinton at the Beverly Hills, Calif., home of billionaire Ron Burkle. He is listed as a co-host for another Clinton fund-raiser next month in northern California.

The Paw family is just one set of donors whose political donations are similar to Mr. Hsu's. Several business associates of Mr. Hsu in New York have made donations to the same candidates, on the same dates for similar amounts as Mr. Hsu.

On four separate dates this year, the Paw family, Mr. Hsu and five of his associates gave Mrs. Clinton a total of $47,500. In all, the family, Mr. Hsu and his associates have given Mrs. Clinton $133,000 since 2005 and a total of nearly $720,000 to all Democratic candidates.

The Paw's Daly City home is a one-story house in a working-class suburb of San Francisco. On a recent day, a coiled garden hose rested next to a dilapidated garden with a half-dozen dried out plants. The din of traffic from a nearby freeway was occasionally drowned out by jumbo jets departing San Francisco International Airport.

William and Alice Paw are of Chinese descent. The entire family got their Social Security cards in California in 1982, according to state records. All but one of the Paws registered to vote as "nonpartisan." A San Mateo County elections official said that members of the Paw family vote "sporadically."

No one in the Paw family had ever given a campaign contribution before the 2004 presidential election, according to campaign-finance reports. Then, in July 2004, five members of the family contributed a total of $3,600 to the presidential campaign of Sen. John Kerry, the Massachusetts Democrat. Five of the checks were dated July 27, 2004. About the same time, Mr. Hsu made his first donations to a political candidate, contributing the maximum amount allowed by law to Mr. Kerry in two separate checks, on July 21, 2004, and on Aug. 6.

From then on, the correlation of campaign donations between Mr. Hsu and the Paw family has continued. The first donations to Mrs. Clinton came Dec. 23, 2004, when Mr. Hsu and one Paw family member donated the then-maximum $4,000 to her Senate campaign in two $2,000 checks, campaign-finance records show. In March 2005, the individuals gave a total of $17,500 to Mrs. Clinton.

Since then, Mr. Hsu, his New York associates and the Paw family have continued to donate to Democratic candidates. This year, Alice Paw and four of the Paw children have donated the maximum $4,600 to Mrs. Clinton's presidential campaign.[/rquoter]