Hillary Clinton has given away campaign contributions of $23,000 because the donor — one of the leading fundraisers for the entire Democratic Party — has been revealed as a fugitive from the law.

Norman Hsu, a Hong Kong-born businessman and ardent Clinton supporter, was a designated "HillRaiser", who had pledged to raise more than $100,000 for Mrs Clinton's presidential campaign.

Under US election law, donors can only personally give $4,600 per candidate, but through persuading others or giving money to a plethora of political action committees, determined fundraisers, such as Mr Hsu, can achieve much higher totals.

Records reported in the US press this week showed that he had personally donated more than $500,000 to Democratic candidates in the last three years and had encouraged others to give a further $500,000, making him one of the most important givers to the party.

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But last night, the New York Senator announced that she would be handing on Mr Hsu's donation of $23,000 to charity because he had failed to turn up for sentencing in a grand theft case in California in 1991. A string of other leading Democrats, including Edward Kennedy and John Kerry, the senators from Massachusetts, also said they would get rid of Mr Hsu's money.

According to law enforcement officials quoted by the Los Angeles Times, Mr Hsu disappeared after admitting that he had raised $1 million from investors on the back of a non-existent contract to import latex gloves . He agreed to serve up to three years in prison before vanishing. A warrant for his arrest was issued in 1992.

"He is a fugitive," Ronald Smetana, an attorney on the case told the newspaper. "Do you know where he is?"

In fact, Mr Hsu's name had been prominent in the pages of The Wall Street Journal since the beginning of the week, which was investigating his links to the Paws, a family of apparently modest means who have suddenly become significant donors to Mrs Clinton's campaign, giving a total of $47,500 since 2005. The family, led by William Paw, a postman, has given $200,000 to Democratic candidates since 2005.

The newspaper reported that the family's donations "closely track" those made by Mr Hsu, who used to run a business from their address. It is illegal under US campaign finance laws to reimburse people for political donations that you have asked them to make.

But it was the revelation of Mr Hsu's outstanding legal issues in California that prompted Democrats to distance themselves from the businessman, who runs around half a dozen apparel companies in New York and is reported to have a variety of business interests.

A spokesman for Mrs Clinton's campaign said that a total of $23,000 given by Mr Hsu to the senator's presidential campaign, her Senate re-election and her political action committee would be handed over to charity. Other donations secured by Mr Hsu's lobbying would not be returned.

“In light of the information regarding Mr Hsu’s outstanding warrant in California, we will be giving his contribution to charity,” said the spokesman.

Mr Hsu said that he would stop giving money to political causes until his legal affairs were resolved.

“I believe I properly resolved all of the legal issues related to my bankruptcy in the early 1990s," he said in a statement. "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."

“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.”

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