Saturday, September 29, 2007

The Not so Strange Case of Norman Hsu

Editor's Note: Democratic fundraiser Norman Hsu's Chinese roots has attracted much attention after his financial shenanigans came to light. But New America Media commentator George Koo says Hsu's story is really an age-old American story.George Koo is an international business consultant and occasional contributor to New America Media. (First appeared in

Confidence man Norman Hsu drew the attention of the media on an otherwise slow summer by living the American dream and following the American way. He did this by giving away lots of other people’s money to politicians.

Until his unsavory past came to light, he was touted as a master bundler. After his expose, he went back to being just a petty con-artist who found the secrets to big times.

As anyone running Ponzi scheme can tell you, you have to bait your scheme by giving away money to early investors in order to establish credibility. Hsu’s action was a grand variation of the theme. Namely, he gave money to politicians and gained even greater credibility, instantly.

When the news first broke about the bundler’s prowess, the mystery was Hsu’s source of funds. Rush Limbaugh rushed to condemn China as the source of illicit funds. The actual truth turned out to be much more mundane. Hsu took investor’s funds and apparently gave some away in the form of political contributions.

Even though he was described as wanting nothing from the politicians for his financial support, he parlayed his hobnobbing with the famous and powerful into an aura of legitimacy that helped raised millions for various dubious schemes.

Mainstream media focused on Hsu’s Chinese from Hong Kong background as if his ethnicity merited heightened interest. Actually, there was nothing exotic about his story. He was following the American way.

To ask what is the American way is the same as asking why politicians flock towards the rich and famous. Because the rich and famous can write big checks and can influence others to do the same. If they are really good at it, they are called bundlers. If they step over the line and violate the law, they become launderers.

Conversely, those wishing to be rich and famous but cannot write big checks can spend their energy hustling for contributors in hopes of being recognized as bundlers. 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 was measured by the amount money raised.

In less than one generation, the American democratic process has undergone a drastic transformation. Grass roots, door-to-door volunteers have gone extinct, replaced by professional telemarketers trolling for dollars. Neighborhood coffee klatches to meet the candidates now come with obvious strings where highest level donors get quality face time with the candidate and perhaps a photo op. Candidates now pay lip service to public forum where issues are discussed. Instead they favor artfully created spots on TV to present their best side to the public.

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 Asian, 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 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.