BLUE SUEDE HSUS: Things aren’t lookiing good. Hillary worried about these kinds of problems, but failed to prevent them:

Of all the possible vulnerabilities facing Senator Hillary Rodham Clinton’s presidential campaign, Mrs. Clinton has long believed that the one of the biggest was money, friends and advisers say. Some sort of fund-raising scandal that would echo the Clinton-era controversies of the 1990s and make her appear greedy or ethically challenged.

As a result, Mrs. Clinton told aides this year to vet major donors carefully and help her avoid situations in which she might appear to be trading access for big money, advisers said. Also to be avoided, the senator said, were fund-raising tactics that might conjure up the Clinton White House coffees and the ties to relatively unknown donors offering large sums, like the Asian businessmen who sent checks to the Democratic National Committee.

Yet nine months into her campaign, Mrs. Clinton is grappling with exactly the situation she feared — giving up nearly $900,000 that had been donated or raised by Norman Hsu, a one-time fugitive and one of her top fund-raisers, whose actions raise serious questions about how well the campaign vetted its donors. As a result, Mrs. Clinton now finds herself linked to a convicted criminal who brought in tens of thousands of dollars from potentially tainted sources.

So they’re returning the money. But then they’re asking for it back:

The campaign will try to get most of the donors to give the money back right after the refunds, said a senior Democratic strategist who advises Mrs. Clinton’s campaign. “That’s the plan,” the strategist said.

But it doesn’t seem like a very good plan, since there are worries about the donors, whose names the campaign still refuses to release:

Mrs. Clinton and her advisers are concerned that rival campaigns or the news media will dig into the background of each donor, and they want to be prepared if some of the donors end up having money funneled to them from Mr. Hsu or have shady backgrounds.

If the money was funneled from Mr. Hsu, it may have to be returned a second time, since the WSJ reports that it might be stolen:

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.

Hey, his campaign-donation checks never bounced. But let’s look at this: Hilary knew she had a problem, and her people had past experience. Nonetheless, they wound up taking lots of money from a fugitive felon who may have embezzled it from business partners, then routed it through straw donors to avoid federal election law. And yet they’re hoping to get the money in the end anyway? Doesn’t sound smart to me.

Meanwhile, Jim Geraghty notes conveniently shifting standards of responsibility:

So let me get this straight… to Hillary, Norman Hsu gets the benefit of the doubt, but not General David Petraeus?

I guess Petraeus neglected to donate.