Returning contributions from Bad People is common. For example, Anti-Arab prejudice was so strong that in 1984 Democratic Presidential nominee Walter Mondale returned campaign contributions from Arab-Americans to avoid alienating Jewish-Americans.
Of course, returning contributions like Mondale did tacitly admits you are a whore. To paraphrase George Bernard Shaw, once you start returning donations, you've already established that you're a political prostitute, and we're just trying to decide who you will whore for.
Dr. Paul is, relative to the other candidates, nobody's whore. He's been in and out of Congress for over 30 years, and everybody knows he's going to do what he thinks is right, which might not be what you or the rest of the world think is right, but it will be what he thinks. What, is the New Republic worried that if a Nazi gives him $500, President Paul will invade Poland? What's his aksing price for invading Russia: $1000? (Of course, the ways things are going now, it likely won't be long before the New Republic is demanding the U.S. Army invade Russia.)
In contrast, nobody is talking about the sainted Sen. Barack Obama's connection to a man linked to Louis Farrakhan and Col. Gaddafi: the the radical Afrocentrist minister Rev. Jeremiah T. Wright, Obama's spiritual adviser for the last two decades.
Obama knows he has a big problem with the Rev. -- that's why Obama "disinvited" him at the last moment from giving the invocation at Obama's campaign kickoff last winter. And the Rev. knows he's a big problem for Obama. (For one thing, he's a loose cannon who loves to be in the spotlight.) According to the NYT:
"When [Obama's] enemies find out that in 1984 I went to Tripoli [in Libya]" to visit Col. Muammar el-Qaddafi, Mr. Wright recalled, "with [Black Muslim leader Louis] Farrakhan, a lot of his Jewish support will dry up quicker than a snowball in hell." [March 6, 2007 Disinvitation by Obama Is Criticized By Jodi Kantor]
Wright didn't give Obama $500, he gave Obama's life meaning.
If Obama gets on the Democratic ticket, the GOP operatives will make the Rev. Wright famous, and fast. If Obama wants to be taken seriously as Presidential or Vice-Presidential timber, he needs to do a public Sister Souljah on his spiritual adviser, and soon.