The resurfacing of Norman Hsu reminds us that he was a well-known bundler for Hillary Clinton just two election cycles ago. Today he is ensconced in prison making $40 per month as a high school tutor for his fellow prisoners.
By giving his first interview since he was convicted and sent to prison (WSJ, 8/12/15), we are reminded that he once lived the American dream. He took money for the gullible promising handsome returns. He then gave some to the politicians. The photo-ops with politicians gave him credibility, which enabled him to take more money from more gullible people.
Instead of merely taking money from the later investors to pay off the early ones, his cutting politicians in on the take gave his Ponzi scheme an extra twist. OK, according to the Journal article, he didn’t siphon from funds he raised so much as he badgered his investors into making political contributions directly to the candidate. After all, he was making so much money for the suckers that they should be happy to donate just to stay on the good side of Hsu.
As anyone running a Ponzi scheme can tell you, you have to bait your scheme by giving away money to early investors in order to establish credibility. Hsu gave money to politicians and gained even greater credibility and faster.
At the time of Hsu’s arrest, the mainstream media made a big deal out of his being a Chinese from Hong Kong. Rush Limbaugh among others suspected conspiracy from the sinister Mainland China. The anti-China hysteria raised during the Wen Ho Lee scandal and alleged campaign finance irregularity had not yet gone away. If some white guy had tried the con, the case would have been nowhere near as sensational.
Being Chinese had nothing to do with Hsu’s con. He was simply taking advantage of the flaw in the American political process. He understood that politicians gravitate towards the rich and famous, because the rich and famous can write big checks and can influence others to do the same.
If the campaign fundraisers are really good at it, they are called bundlers. If they step over a fine line and violate the law, they become launderers. Successful bundlers get recognition and status. If the candidates they support get elected, they get appointed to positions in the government. At the very least, they get access and can claim to have influence in high places.
This is the American democracy in action. It’s all about money. To get elected, the candidate has to raise lots of money. Once elected, the successful candidate has to raise more money so as to scare potential rivals into not running against him or her again. The strength of any candidacy is measured by the amount money in his/her war chest.
Today only money talks. Hsu simply used the system to create a new persona for himself. Others have done the same before him and others will follow. If they are not ethnic Asians, they will not be noticed.
Media’s attention has focused on the scoundrel but not the system that makes such scoundrels possible. Yet it is the system that is corrupt. In America, democracy is no longer one person, one vote. It is $1 million (or some amount depending on the office but increasing with every election) one vote. It is not possible to even run for local city council without raising a lot of money. Small wonder, public interest and voter participation is declining.
It’s laughable to go around the world telling others to be more democratic and be more like us when our system is badly broken and not one any other country would wish to emulate.
Dr. George Koo recently retired from a global advisory services firm where he advised clients on their China strategies and business operations. Educated at MIT, Stevens Institute and Santa Clara University, he is the founder and former managing director of International Strategic Alliances. He is a member of the Committee of 100, the Pacific Council for International Policy and a director of New America Media.
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