As deadline looms, clean cash is king

With five days until the end of third-quarter fundraising, Democratic presidential candidates are looking to avoid media maelstroms like the one Sen. Hillary Rodham Clinton (D-N.Y.) endured thanks to Norman Hsu, a lack of oversight and a mountain of checks. A key part of their strategy? Increasing background checks on donors.

White House hopefuls are intensifying their efforts to ensure that when the next round of numbers are released, there is no repeat of the episode that forced Clinton and other Democrats to return money or donate to charity funds contributed by or raised through associates of Hsu, who was wanted for an outstanding warrant on charges of fraud.

“As soon as my campaign found out what I and dozens of other campaigns did not know, that he was a fugitive from justice, we took action,” Clinton said Sunday on “Meet the Press with Tim Russert.”

“And out of an abundance of caution, we did return any contribution that we could in any way, no matter how indirect, link to him. And I believe that we’ve done what we needed to do based on the information as soon as it came to our attention.”

The Clinton campaign, which returned about $850,000, has “gone even further,” according to Clinton, including “additional” criminal background checks for potential contributors. Campaign spokesman Phil Singer said the campaign has “instituted vigorous additional vetting procedures on our bundlers.”

Though Clinton bore the brunt of the Hsu fallout this month, her Democratic rivals all have been subjects of unflattering press accounts focused on shady characters who have donated to the campaigns. And in a race where “change” is an oft-repeated theme and fundraising records are being smashed, the candidates risk creating the perception that their fundraising efforts are anything but above-board.

Hsu contributed to both Sens. Barack Obama (D-Ill.) and Joseph Biden (D-Del.) in the past, and former Sen. John Edwards’s (D-N.C.) campaign is awaiting the outcome of a case against lawyer Geoffrey Fieger, who recently was indicted for trying to illegally donate more than $125,000 to Edwards’s 2004 bid.

“I’m sure they’re looking at it a lot more closely than they have in the past few years,” one of Clinton’s top fundraisers, John Catsimatidis, told The Hill.

Catsimatidis said all of the candidates have been “put on notice” by the Hsu debacle, and they all know there’s “no room for anyone” to have future incidents like that one.

That said, the New York businessman argued Hsu was an anomaly, and said he doesn’t see any “major problems” facing Clinton’s fundraising in the future.

“I don’t think they have any other problems that I know about,” Catsimatidis said. “Hsu should’ve stuck out. He came out of nowhere. He was such a nice guy, he disarmed everybody.”

Most of the campaigns have begun to institute background checks on donors as part of their fundraising operations.
“We have always had an extensive vetting process for our raisers, but due to the recent events involving Norman Hsu and the Clinton campaign, and to err on the side of caution, we have begun doing criminal background checks as well,” Edwards’s spokeswoman, Colleen Murray, said.

The sheer volume of checks the campaigns are processing adds another layer of difficulty to the process of screening for troublesome donors.

“With hundreds of thousands of donors, we are constantly updating our procedures to try to catch any potential problems,” Obama spokeswoman Jen Psaki said Monday in an e-mail.

The policy director at the Campaign Legal Center, Meredith McGehee, said the problems the candidates are facing with shady donors are inherent in the “mad marathon to go and shake the money tree over and over again.”

{mosads}“You can’t be surprised when some bad apples come down with the good,” McGehee said. “The bundling is kind of a symptom of a much larger disease.”

McGehee said all the campaigns will have “to go back and look at their vetting procedures.” In the past, she said, “you probably used to more or less just Google somebody.”

McGehee said the intensified efforts to identify potentially troublesome donors is “daunting,” particularly as “at the same time, you’re trying to raise more money.”

“At some point, you’re kind of chasing your own tail,” she said.

Catsimatidis said one way to improve the vetting process without turning off or insulting the same people candidates are asking for money is to look at the motives of some who contribute, “especially if they’re bundlers.”

“You don’t have to let them know you’re scrutinizing them, but you’ve still got to do it,” he said.