Dirty Money: Funding Decision '08

Sept 21, 2007 — -- After a prominent Democratic fundraiser was charged with bilking millions of dollars from investors, a number of candidates are taking a closer look at where their money came from.

Norman Hsu's dream may have been to buy his way into New York Sen. Hillary Clinton's inner circle. Instead, the only thing Hsu bought was scrutiny from the authorities. Now he's facing additional federal charges of bilking investors out of $60 million in what authorities call a Ponzi scheme

A red-faced Clinton campaign was forced to hand back almost a million dollars that Hsu, a major Clinton fundraiser, collected from, now, clearly questionable sources.

"Unfortunately, none of us caught the problems. This happened to a lot of campaigns," said Clinton, defending her campaign.

It's just a glimpse of the ugly underbelly of the frantic race to raise campaign cash and that can include the practice of "bundling," where donors pool their money to get around campaign donation limits.

The latest revelation to surface involves another Clinton donor. According to The Wall Street Journal, a bundler may have improperly reimbursed employees and friends for giving money to Clinton.

Experts say the drive to round up big bucks, and get credit for it, is pushing people over the line.

"There's a real temptation there. If you're trying to hit your mark, hit your quota as a bundler and you're not doing it, it's pretty easy to say to somebody I'll reimburse you, just write the check," said Massie Ritsch, of the Center for Responsive Politics.

While the spotlight has been on Clinton, she's not the only candidate to face fundraising scrutiny.