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Hsu Was Financed By “Woodstock” Creator

From the Wall Street Journal:

 

’60s Figure Says He Financed Donor Hsu

Woodstock Creator Tells DA That Funds Have Gone Missing

A $40 Million Shortfall

By IANTHE JEANNE DUGAN and BRODY MULLINS
September 12, 2007; Page A1

Where did Norman Hsu get his money?

That has been one of the big questions hanging over the prominent Democratic fund-raiser, as reports have surfaced about hundreds of thousands of dollars he made in political donations, plus lavish parties, fancy apartments and a $2 million bond he posted to get out of jail earlier this month.

New documents reviewed by The Wall Street Journal may help point to an answer: A company controlled by Mr. Hsu recently received $40 million from a Madison Avenue investment fund run by Joel Rosenman, who was one of the creators of the Woodstock rock festival in 1969. That money, Mr. Rosenman told investors this week, is missing.

Mr. Hsu told Mr. Rosenman the money would be used to manufacture apparel in China for Gucci, Prada and other private labels, yielding a 40% profit on each deal, according to a business plan obtained by the Journal. Now the investment fund, Source Financing Investors, says Mr. Hsu’s company owes it the $40 million, which represents 37 separate deals with Mr. Hsu’s company. When Source Financing recently attempted to cash checks from the company, Components Ltd., the investors say they were told the account held insufficient funds.

Source Financing’s arrangement with Mr. Hsu’s company, according to court documents and investor accounts, echoes an older matter that came to light in recent weeks. In 1991, California officials charged Mr. Hsu with grand theft for failing to repay investors for money he raised to import latex gloves from China.

Norman Hsu has an extraordinary ability to deceive,” says Seth Rosenberg of Clayman & Rosenberg, a lawyer representing Mr. Rosenman.

Mr. Rosenman and a partner, Yau Cheng, wrote a joint letter on Monday to alert their fund’s investors. “Last week, our attorneys met with representatives of the Manhattan District Attorney’s office to inform them of the situation,” they wrote. The district attorney is investigating, the letter says. A spokesman for the district attorney did not respond to a request for comment…

Joel Rosenman, who gained fame as one of the creators of the Woodstock festival, now runs an investment fund that put money into one of Norman Hsu’s companies.

More Democrats are expected to follow. A Wall Street Journal analysis of campaign finance reform records has linked Mr. Hsu with at least $1.8 million in donations to Democrats since 2004.

Mr. Rosenberg, the attorney for Mr. Rosenman, asked politicians to hold on to the funds so that Source Financing and other investors can be made whole. “It appears that Source Financing Investors joins Hillary Clinton…and many others as his victims,” Mr. Rosenberg said in an interview. “We urge candidates who received contributions from Mr. Hsu to retain those funds so that they may be returned to victims of the scheme.”

Mr. Rosenman, the son of a Long Island, N.Y., orthodontist, is best known for his role in Woodstock. In 1967, Mr. Rosenman had degrees from Princeton University and Yale Law School, but was working as a guitarist at clubs on Long island and in Las Vegas.

He and a friend with a big trust fund, John Roberts, decided to pitch a situation comedy about a hapless duo who hatched a new business plan every week. Looking for material, they placed an ad in The Wall Street Journal and New York Times that said: “Young Men With Unlimited Capital looking for interesting, legitimate, investment opportunities and business propositions.”

The responses — thousands of them — inspired them to become venture capitalists instead of screenwriters, according to a book by Messrs. Rosenman and Roberts, “Young Men With Unlimited Capital.”

One of the ideas was for a three-day concert. Together with two others, the pair raised money, produced and organized Woodstock in 1969…

Woodstock’s creators… struggled with enormous debt and bad publicity, according to the account by Messrs. Rosenman and Roberts. They opened and then sold a recording studio in Manhattan. Eventually, they opened an investment firm in New York called JR Capital. Mr. Rosenman co-produced Woodstock ’94, a 25th-anniversary reprise of the first iconic event…

As I recall (and the article suggests), Woodstock lost money.

For the record, here is the FEC search results for JR Capital employees:

Contributions to Political Committees

ROBERTS, JOHN MR.
NEW YORK, NY 10019
JR CAPITAL CORP./VENTURE CAPITAL

MCCAIN, JOHN S
VIA MCCAIN 2000 INC

02/23/2000
1000.00
20990076441

ROSENMAN, JOEL
NEW YORK, NY 10019
JR CAPITAL/INVESTMENTS

CLINTON, HILLARY RODHAM
VIA FRIENDS OF HILLARY

05/11/2006
1230.00
26020482759

05/11/2006
1970.00
26020482759

Total Contributions:    4200.00

True to cliché, the man with the trust fund is a country-club Republican and the “Woodstocker” is a Democrat.

  Update!

From July’s Jawa Report:

Hillary/Schumer want $1 Million For Hippie Museum

July 17, 2007

… The grassroots free-market group Americans for Prosperity (AFP) today released a list of Senate earmarks slated to be included in the Fiscal Year 2008 Labor, Health and Human Services, and Education appropriations bill.

The 1,016 earmarks total nearly $392 million, and include millions for questionable projects such as $1 million in tax dollars for a museum dedicated to recreating the 1969 Woodstock Music Festival experience

Probably this is just a coincidence.

This article was posted by Steve on Wednesday, September 12th, 2007. Comments are currently closed.

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