The decision came Wednesday as other Democrats began distancing themselves from Norman Hsu, whose legal encounters and links to other Democratic donors have drawn public scrutiny in the past two days.
Sens. Edward Kennedy and John Kerry, both of Massachusetts, also planned to turn over Hsu's contributions to charity. Sens. Barbara Boxer and Dianne Feinstein of California; Al Franken, a Senate candidate in Minnesota; Reps. Michael Honda and Doris Matsui of California; and Rep. Joe Sestak of Pennsylvania also said they would divest Hsu's contributions.
Hsu is a fundraiser for Clinton and is described as a devoted fan of the presidential candidate and New York senator. He had planned to co-host a money event for Clinton on Sept. 30. In a statement Wednesday, Hsu said he believed he had resolved his legal issues, but said he would halt his work raising political money.
"I would not consciously subject any of the candidates and causes in which I believe to any harm through my actions," he said. "Therefore, until this matter is resolved, I intend to refrain from all fundraising activities on behalf of all candidates and causes."
Clinton campaign spokesman Phil Singer said the $23,000 included contributions from Hsu to Clinton's presidential campaign, her Senate re-election and her political action committee. The campaign did not plan to return any money Hsu raised from other donors, Singer said.
"In light of the information regarding Mr. Hsu's outstanding warrant in California, we will be giving his contribution to charity," Singer said.
Reports in The Wall Street Journal and The Los Angeles Times this week caused numerous Democratic candidates and organizations that have benefited from Hsu's contributions to reconsider the donations.
Hsu gave Kennedy $4,000 in 2004 and gave his political action committee $5,000 this year, according to Federal Election Commission records. He also gave Kerry's presidential campaign $4,000 and donated $2,000 to a separate Kerry legal compliance fund. Boxer's campaign received $2,000 from Hsu in 2004, and her political action committee received $2,000 in 2005. Franken received $2,300 this year from Hsu, Matsui received $6,100 since 2004 and Sestak and Honda each received $1,000 for their re-election efforts.
Federal Election Commission records show that Hsu has donated $260,000 to Democratic Party groups and federal candidates since 2004. Though a fundraiser for Clinton, he also donated to Sen. Barack Obama's Senate campaign in 2004 and to Obama's political action committee.
In 1991, Hsu pleaded no contest to a single felony count of grand theft but failed to appear in court for sentencing, according to Ronald Smetana, a California deputy attorney general who prosecuted the case.
Smetana said there is an outstanding warrant for Hsu's arrest. A clerk at the San Mateo County courthouse where Hsu was prosecuted said the warrant was issued in 1992 and orders were for $2 million bail for Hsu if he were arrested.
Smetana said Hsu collected about $1 million from investors by falsely claiming he had a contract to import latex gloves. Smetana said he planned to ask a judge to sentence Hsu to prison.
"We would obviously like Mr. Hsu to return and face justice," said Smetana, who said he had assumed Hsu, a Hong Kong native, had fled the country.
In a statement Wednesday, Hsu said:
"I believe I properly resolved all of the legal issues related to my bankruptcy in the early 1990s. Therefore, I was surprised to learn that there appears to be an outstanding warrant - as demonstrated by the fact that I have and do live a public life. I have not sought to evade any of my obligations and certainly not the law."
On Tuesday, Hsu's Washington attorney, E. Lawrence Barcella Jr., disputed any suggestion that Hsu had any hand in improperly directing contributions from other donors. The Journal reported that six members of the family of William Paw, a San Francisco mail carrier, donated a total of $45,000 to Clinton since 2005. The Journal reported that the donations closely track Hsu's contributions.
By Associated Press Writer Jim Kuhnhenn. The AP's Paul Elias, Fred Frommer, Erica Werner and Kimberly Hefling contributed to this report.