Allen Stanford

Stanford Indicted On Criminal Charges

Zachary Roth | June 19, 2009, 1:12PM

The bell has finally tolled for Allen Stanford.

Federal prosecutors today filed a criminal indictment against the billionaire Texan, as well as three other Stanford Financial Group executives and the former head of the Antiguan bank regulatory agency, charging them with helping to orchestrate a $7 billion Ponzi scheme.

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Allen Stanford

In Interview, Stanford Plays World's Smallest Violin

Zachary Roth | April 6, 2009, 3:34PM

Texas billionaire Allen Stanford has given ABC News his first interview since being charged by the SEC with orchestrating a massive Ponzi scheme. And he doesn't offer a sympathetic portrait.

Amid protestations of innocence -- "I would die and go to hell if it's a Ponzi scheme," and "if it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?" -- Stanford revealed he expects to be indicted by a federal grand jury in the next two weeks. (A senior official at the Justice Department told ABC News the case is "moving along rapidly.")

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Allen Stanford

Lawyer: Stanford Number 2 Helping To Probe Billionaire's Money Trail

Zachary Roth | April 6, 2009, 1:44PM

The walls around Allen Stanford appear to be closing in ever tighter.

David Finn, a lawyer for Jim Davis, the number 2 man at Stanford Financial, tells Bloomberg that Davis is helping investigators track Stanford's European assets, focusing on Swiss banks.

In addition to potentially helping to build a criminal case against Stanford, tracking the assets could help repay victims of Stanford's alleged fraud.

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Allen Stanford

Stanford Lawyer: "SEC Came In Like A Bunch Of Storm Troopers"

Zachary Roth | March 26, 2009, 3:06PM

Dick DeGuerin, the hard-charging Texas lawyer who just signed on to represent Allen Stanford, isn't pulling any punches.

In an interview with TPMmuckraker moments ago, DeGuerin denied that Stanford was running a Ponzi scheme. And, referring to federal investigators' raids on Stanford offices as the SEC prepared charges last month, DeGuerin played the Nazi card, declaring:

The SEC came in like a bunch of Storm Troopers, which caused a panic, and caused the banks in Venezuela and elsewhere to nationalize his banks, just take them away.

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Allen Stanford

Stanford Lawyer: SEC Using Sir Allen As "Distraction" From Madoff

Zachary Roth | March 26, 2009, 2:31PM

Yesterday, we noted BusinessWeek reporting that Dick DeGuerin, the high-profile Texas lawyer who has represented Tom DeLay and David Koresh, among other bold-faced names, might have signed up to defend accused massive Ponzi schemer Allen Stanford.

And today, the magazine confirms that DeGuerin is on the case -- and that the official Stanford fight back, after weeks of being portrayed as a corrupt, Gatsby-esque fraud -- is underway.

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Allen Stanford

For Stanford Number 2, A Gated Home With Ionic Columns, And A God-Fearing Rep

Zachary Roth | March 26, 2009, 12:56PM

Bloomberg has some good details about Jim Davis, Allen Stanford's Number 2 man, who, along with his boss, has been charged with orchestrating a massive Ponzi scheme.

In mid-January, Davis -- who still lives in the region of northern Mississippi where he was born -- sent a text message to the youth pastor of a local church he helped start, telling him: "I'm praying for you."

Among church congregants, Davis, known by some as Mr. Jim, was viewed as God-fearing and honest, according to Ethan Nanney, an elder at the church. In fact, Nanney told Bloomberg, Davis started the church, whose pastor is black, because he wanted a place where black and white people could come together. Davis is also on the board of Memphis's National Civil Rights Museum, which is located at the motel where Martin Luther King Jr. was assassinated.

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Allen Stanford

Stanford Number 2, "Devastated" By Alleged Fraud, Talks With Investigators

Zachary Roth | March 26, 2009, 9:12AM

Is the noose tightening?

James Davis, Allen Stanford's number 2, sat down with FBI and SEC investigators yesterday, Davis' lawyer, David Finn, told Bloomberg. Finn said earlier this week that Davis would fully cooperate with both investigations.

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Allen Stanford

Report: Stanford May Hire DeLay Lawyer

Zachary Roth | March 24, 2009, 6:27PM

We probably should have seen this coming.

Billionaire Texas banker Allen Stanford is considering hiring Dick DeGuerin -- the heavy-hitting Texas defense lawyer who has represented a string of big-name clients, including former House Speaker Tom DeLay -- to defend him on charges that he orchestrated an $8 billion Ponzi scheme, reports BusinessWeek.

The magazine sources that news to "a person familiar with the securities fraud investigation" into Stanford, and adds:

A secretary for DeGuerin says the attorney had been contacted about representing Stanford, but declined to comment further.

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Allen Stanford

In Ominous Sign For Sir Allen, Feds Flip Stanford Number Two

Zachary Roth | March 24, 2009, 1:46PM

This doesn't sound like good news for Sir Allen...

James Davis, the number two at Stanford Financial Group, is cooperating with the federal civil and criminal probes into the $8 billion Ponzi scheme that both are accused of orchestrating, Davis' lawyer has told (sub. req.) the Wall Street Journal.

That's a shift by the former SFG chief financial officer, who was also Allen Stanford's college roommate. Previously, Davis had taken the fifth, along with Stanford himself, and had refused to provide investigators with key company documents.

To date, Stanford, Davis, and a third Stanford employee, Laura Pendergest-Holt, have been charged in a civil complaint filed by the SEC. But only Pendergest-Holt currently faces criminal charges, relating to obstruction of justice.

That's likely to change. Even Davis' cooperation doesn't appear likely to shield him from facing his own criminal charges. But it can hardly come as welcome news for the cricket-loving billionaire.

Allen Stanford

Stanford Exec: Court-Appointed Lawyers Went Through My Panty Drawer!

Zachary Roth | March 11, 2009, 6:16PM

No one likes lawyers rifling through their underwear drawer.

Laura Pendergest-Holt, the chief investment officer for Stanford Financial Group -- who has been charged along with Allen Stanford himself and number 2 Jim Davis -- is trying to get overturned a court order that put her assets under the control of a court-appointed receiver.

In an emergency motion, attorneys for Pendergest-Holt wrote that lawyers for the receiver, Ralph Janvey, conducted a raid of her Mississippi home March 2, seizing her family's car, diverting her mail, went through her underwear drawer, and mocked her husband -- telling him he wouldn't be living in the house for long.

The court filing called the move a "stunning act of bad faith", and asked for the assets to be returned form the control of the receiver. It argued that Pendergest-Holt had agreed to the seizure only before she knew that criminal charges would be filed against her. Now that they have been, the seizure violates her constitutional rights, according to the filing.

The filing says:

In effect, the Receiver's lawyers, in the context of the civil case, have conducted a free-wheeling warrantless search of Ms. Pendergest-Holt's home and have taken Ms. Pendergest-Holt's personal property without due process of law. Because the Receiver's lawyers are duty-bound to cooperate with the SEC, DOJ and FBI under the Receivership Order, the Government will no doubt be the primary beneficiary of the Receiver's unlawful search and seizure of Defendant's property.

Pendergest-Holt was charged by the SEC earlier this month with making misrepresentations to the FBI about, among among things, her knowledge of Stanford's portfolio.

Allen Stanford

Stanford Takes The Fifth

Zachary Roth | March 11, 2009, 3:05PM

In better days, Allen Stanford was, by most accounts, a loqacious and charming figure, wooing clients, lawmakers, and foreign dignitaries alike with the sheer power of his personality.

Now, not so much.

In court documents filed today, Stanford took the fifth, declining to testify in the SEC's complaint against him, in which he is accused of orchestrating an $8 billion Ponzi scheme.

His former college roommate and Number 2 at Stanford Financial Group, Jim Davis, is likewise staying mum, it was reported last week.

Allen Stanford

Stanford Said He Talked To Treasury About Changing Tax Law

Zachary Roth | March 10, 2009, 5:40PM

We told you earlier today about Allen Stanford's lobbying to get some businesses taxed at the US Virgin Islands rate rather than the US rate. And about how Stanford had lately been in the process of moving his Caribbean headquarters to St. Croix, in the Virgin Islands.

Well, one Virgin Islands paper, the St. Thomas Source, has some more interesting details on those subjects...

The paper reports that, in a speech at a 2007 economic summit in St. Croix, Stanford made his pitch for more favorable tax laws that he said would spur more investment. He sought changes that would have allowed money from companies headquartered in the Virgin Islands (like his own) to flow into the US virtually tax free.

Stanford presented this change as a boon to the whole region:

"If that were to happen, the Caribbean Basin as a whole, and the Virgin Islands in particular, would see serious investment begin to flow in almost overnight."

Stanford even said he brought up the idea to US Treasury Department officials, and hoped to have "draft legislation" ready to present by mid October.

He repeated the pitch at a ceremony to break ground on his new planned Caribbean headquarters in the V.I.

"The law must include all Caribbean-created revenues, as long as the company is headquartered in the Virgin Islands," he told the crowd, which contained local dignitaries and lawmakers.

There is no record of any such legislation being introduced since at least 2005, says the paper.

Allen Stanford

Stanford Financial: Help Wanted!

Zachary Roth | March 10, 2009, 11:28AM

Allen Stanford may have been accused of orchestrating an $8 billion Ponzi scheme. But maybe things aren't all doom and gloom for his firm.

It looks like Stanford Financial is still hiring -- even in these tough economic times!

The company's Antiguan assets have been seized, but if you want to work in client services, IT, or security(!) on the island, you can still send in your resume.

Perhaps unsurprisingly, the firm doesn't seem to have any openings for accountants, or lawyers.

Allen Stanford

Stanford Lobbyist: He Wanted Virgin Islands Tax Rate

Zachary Roth | March 10, 2009, 11:16AM

The Houston Chronicle has a takeout on Ben Barnes, the storied Texas power-broker who's been thrust back into the limelight through his work as Allen Stanford's Washington lobbyist.

Barnes -- who didn't return our call when we wanted to talk about this several weeks ago -- reveals one intriguing nugget about what he was up to on Stanford's behalf.

Reports the paper:

[O]ver the past year, [Stanford] was interested in having business taxed at the U.S. Virgin Islands tax rate rather than the U.S. rate, Barnes said. Stanford wanted legislation to promote investment in the Caribbean.

"This was not Allen Stanford's legislation. This was the U.S. Virgin Islands idea because they wanted more people to come down there, earn money there," Barnes said.

No such measure was approved either by Congress or the U.S. Treasury, he said.

It's unclear exactly what this means. Which businesses would this change have applied to? Stanford had assets in the Virgin Islands, but the major part of his business was based in Antigua.

But -- along with Stanford's opposition to efforts to crack down on offshore tax havens -- it's another small piece of evidence that goes to answer the question of what Stanford hoped to get out of his assiduous attention to American lawmakers.

Late Update: We overlooked this, but it seems that Stanford was in the process of moving his operation to the Virgin Islands. In February 2008, he announced plans to break ground on construction of the ominously titled "Stanford Financial Group global management complex," which would "serve as the head office for Stanford's operations in the Caribbean."

Lester Byrd, the Antiguan prime minister with whom Stanford had been worryingly close -- it was through Byrd that Stanford obtained his knighthood -- left office in 2004, and the Texan had chillier relations with his successor.

Allen Stanford

Texas Paper On Cornyn and Sessions' Stanford Ties: "What Were They Thinking?"

Zachary Roth | March 4, 2009, 11:05AM

Are lawmakers who took those Antiguan junkets on Allen Stanford's dime paying a political price back home?

It's hard to say. But John Cornyn and Pete Sessions, the Texas GOP senator and congressman respectively, can't be psyched about this Dallas Morning News editorial.

"What were they thinking?" asks the piece in its lead, pointing out that Cornyn and Sessions must have known when they accepted those trips that Stanford would have been looking to curry favor.

The editors conclude, a bit lamely:

Sessions and Cornyn have donated $9,000 of those funds to charity. They would be wise to donate the rest - and to use better judgment next time.

The paper might have added that Sessions would also be wise to ensure that his staff doesn't misinform reporters about the nature of the congressman's relationship with Stanford.

Still, it's a start.

Allen Stanford

Stanford Victims Starting To Emerge

Zachary Roth | March 3, 2009, 2:37PM

Just as happened in the Bernard Madoff scandal, we're now starting to hear some heart-wrenching stories from the victims of Allen Stanford's alleged fraud.

One older couple told their tale of woe to a North Texas TV station:

Marsha and Arlie Carter always planned to live out their golden years in Rainbow, Texas, outside Dallas. They sold their software company -- the business they built together from nothing -- to finance their dream.

"We hoped to pass it down to my kids and grandkids," Marsha said.

Then, last month, they turned on the news and learned the company their broker worked for was entangled in a case of massive alleged fraud. All the money associated with Stanford Financial Group was frozen, including about 30,000 brokerage accounts.

That's where the Carters were keeping most of the money they had saved.

"There's a possibility that we might lose the house if we can't have enough income to make the payments on it," Marsha Carter said.

Less tragically, the Dallas Morning News reports that many clients who had brokerage, money-market or mutual fund accounts with Stanford can't get to their money because those accounts have been frozen by a court-appointed receiver.

Reports the paper:

Mark Choate, chief executive of an irrigation landscape company, has a brokerage account that's been frozen for two weeks. "During that time," Choate says, "the stock market has been dropping like a rock, and I haven't been able to do anything about it."

A lawyer for clients like these tells the DMN:

A guy called me Thursday who has all of his net worth tied up in a construction project and meets his payroll through his Stanford accounts. He said, 'Larry, if I don't have access to that money, all these people aren't going to get paid. My construction project will go kaput, and my whole life will be in ruin.'

There's even a suggestion that Stanford may have swindled some of those West Indian cricket players who "won" $1 million each after beating England in a Stanford-organized match last year. In an interview conducted before Stanford's alleged fraud came to light but published this week, one player told (sub. req.) the New Yorker that he had left his prize-money in Stanford's bank, after the billionaire assured him and other players that he would keep it safe.

Meanwhile, a showdown has quietly been brewing, reports the Associated Press, between that court-appointed receiver, Texas lawyer Ralph Janvey, and the government of Antigua, where the Senate voted Friday to seize Stanford's property.

Stanford is Antigua's largest private employer, with about 800 people working for him. So the country's officials are anxious to keep Stanford's businesses in operation, rather than allowing Janvey to use the assets to pay back swindled investors.

Looks like this story could be with us a while...

Allen Stanford

In Stanford's Wake, Levin Announces New Improved Tax Haven Bill

Zachary Roth | March 2, 2009, 5:01PM

Remember that bill we told you about last week, the one that was designed to crack down on offshore tax havens and might have helped stop Allen Stanford's alleged $8 billion scam? Well, it's back.

As we reported, the bill, introduced in 2007 by Sen. Carl Levin, died in the Senate Finance committee. A committee aide later told us that Committee chair Max Baucus never took it up because he favored a different approach to the problem.

But now Levin -- joined by Senators Sheldon Whitehouse, Claire McCaskill, D-Mo. and Bill Nelson -- has come back with an improved version of the legislation, the "Stop Tax Haven Abuse Act."

According to a press release, the bill now has three new provisions, that would:

(1) treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes; (2) close an offshore tax dividend loophole that enables non-U.S persons to dodge payment of U.S. taxes on U.S. stock dividends; and (3) expand the tax return reporting requirements for passive foreign investment corporations (PFICs) to include U.S. persons who don't own a PFIC, but have formed, sent assets to, received assets from, or benefitted from a PFIC.

Baucus has already announced that he intends to introduce his own version of the legislation, that's more targeted at giving the IRS the tools it needs to detect tax cheats. So we'll have to see how that plays out.

But it seems like one silver lining in the Allen Stanford case is that it's gotten lawmakers into gear to try to fix the problem once and for all.

Allen Stanford

Stanford Provided Majority Of Funds For Group That Sponsored Lawmaker Junkets

Zachary Roth | March 2, 2009, 12:34PM

From the start of the Allen Stanford mess, we've sort of had a hunch that the Inter-American Economic Council -- which paid for several Caribbean junkets and other events for US lawmakers -- was largely a creature of the Texas billionaire. And that hunch is looking increasingly accurate.

The Dallas Morning News reports that in 2005, the year the IAEC funded that big trip to Antigua for lawmakers of both parties that we posted pictures of, Stanford Financial provided 85 percent of the IAEC's revenue, according to its president, Barry Featherman.

Featherman also told the DMN that the IAEC raises no money except for the funds it receives from sponsors like Stanford for specific events. In other words, the organization exists, it appears, only to hold events with public officials.

And Featherman added that the group hasn't paid for any trips since 2007, thanks mostly to ethics rules passed by the new Democratic Congress early in that year, which banned House members from accepting free trips on private planes.

There are some other interesting nuggets in the DMN story. The paper reports that Tom DeLay "made at least 11 trips on Stanford planes between 2003 and 2006, according to federal campaign finance records."

And remember how the office of Texas GOP congressman Pete Sessions first claimed that Sessions didn't know Stanford personally -- a claim that was undone when we posted pictures of the two men schmoozing on that 2005 trip to Antigua? Well it looks like Sessions was getting more than just a nice Caribbean trip out of Stanford. The DMN reports that in 2004 when, thanks to redistricting, Sessions was in a razor-tight race to hold onto his Congressional seat against the powerful incumbent Democrat Martin Frost, Stanford's company came to the rescue, giving $37,875 in the final weeks of the race.

Separately, it looks like Team Stanford is staying mum on the charges that it orchestrated an $8 billion fraud. James Davis, Stanford's college roommate and the number two at Stanford Financial, who has also been charged in the SEC complaint, took the Fifth last week under questioning by agency investigators.

And last week, Laura Pendergest-Holt, the company's chief investment officer, was charged with criminally obstructing the SEC probe. The FBI filed court documents claiming Pendergest-Holt made "misrepresentations" about her knowledge of Stanford's investment portfolio, and about whether she met with other Stanford officials to prepare for her testimony. The charge may be evidence that the government is trying to flip Pendergest-Holt to testify about Stanford himself.

Allen Stanford

Baucus Committee: We Prefer Different Approach To Tax Haven Problem

Zachary Roth | February 25, 2009, 4:55PM

Yesterday, we revealed how a bill that might have sought to close off-shore tax loopholes -- and which might have helped catch Allen Stanford -- died in Max Baucus' Senate Finance committee in 2007.

Now, a Finance committee aide has provided an emailed statement to TPMmuckraker, making the case that the committee didn't take up the bill, sponsored by Carl Levin, because Baucus differed with some aspects of the bill's approach, and noting that Baucus is working on a separate bill to address the problem.

In a nutshell, according to the statement, Baucus favors an approach more targeted at giving the IRS the necessary tools to detect tax cheats than was the Levin bill, which took a broader tack.

The Chairman announced in 2008 that he is writing legislation to address the use of tax havens by individuals. In particular, Senator Baucus and his staff are working with Treasury and the IRS to give them the right tools to detect the tax abuse we are all concerned about. Senator Baucus's goal is to move the sharpest possible bill that will give the IRS tools -- including additional reporting requirements -- to determine when a taxpayer uses a tax haven and the identity of the user.

It will be important to move legislation that gives the IRS the best chance to find abusers in the first place, in order to apply certain rebuttable presumptions that would make income US-sourced income on which US taxes should be paid.

The bill you mention is quite broad, and while it creates a series of changes to the burden of proof, that only helps once the IRS has detected the use of a tax haven.

The Finance Committee actively fights offshore tax havens - in the JOBS bill with inversions policy, tax shelter penalties, and increased transparency with regard to tax shelter promoters; in last year's military bill, with provisions to stop US companies with Federal contracts from setting up entities in tax havens to run employees through in order to avoid employment taxes. FOGEI/FORI in the energy bill tightened up a bit the way oil and gas pay US tax on foreign-earned income. Other proposals have been made public as well, particularly with regard to Bermuda reinsurance. The Committee also sent the GAO to Ugland House in the Cayman Islands to investigate one of the most notorious suspected tax havens in the world. And the Committee will take this issue up again at a hearing in March.

In other words, according to the aide, this was an issue of legitimate policy differences -- not an effort by Baucus to kill legislation opposed by a contributor.

We'll be watching for those hearings in March.

Allen Stanford

Ney Praised Stanford In Congressional Record -- Just As He Did For Abramoff

Zachary Roth | February 24, 2009, 6:21PM

Did Allen Stanford get the Jack Abramoff treatment from Bob Ney?

Via the Sunlight Foundation, check out what Ney, the Ohio GOP congressman who went to jail for his role in the Jack Abramoff scandal, entered into the Congressional Record in September 2005:

Mr. Ney: Mr. Speaker --

Whereas, Allen R. Stanford has been recognized as the 2006 Recipient of the "Excellence in Leadership Award" by the Inter-American Economic Council ; and

Whereas, Allen R. Stanford has been acknowledged for his performance and leadership in the areas of finance and investments; and

Whereas, Allen R. Stanford should be commended for his service as the CEO of the Stanford Financial Group based in Houston, Texas.

Therefore, I join with the residents of the entire 18th Congressional District of Ohio in honoring and congratulating Allen R. Stanford for his outstanding accomplishments.

We already knew that Stanford and Ney, who sat on the House Financial Services committee, were tight. Here they're positioned right next to each other at a 2004 Washington event put on by the Stanford-backed Inter-American Economic Council.

(Looks like Ney even got a speaking gig at that event).

And Ney's chief of staff, Wil Heaton -- who also pleaded guilty in connection with the Abramoff scheme -- went on that now-famous (kind of) 2005 junket to Antigua for lawmakers and their aides, paid for by the IAEC.

But the statement unearthed by the Sunlight Foundation suggests the relationship was even cozier. Indeed, it fits an intriguing pattern:

According to Abramoff's plea agreement, one of the "official acts" that Ney took on behalf of Abramoff was an October 2000 agreement "to insert a statement into the Congressional Record which praised the new owner of the Florida gaming company, Abramoff's business partner."

The Abramoff partner was Adam Kidan, who in 2005 pleaded guilty to conspiracy and fraud in connection to his venture with Abramoff. Abramoff and Kidan gave $10,000, in Ney's name, to the National Republican Congressional Committee.

Just as Abramoff and Kidan sought to get a PR boost by having nice things said about them in Congress, Stanford may have also have stood to benefit from Ney's move. Stanford's ability to attract investors depended on maintaining a sterling reputation. Having his "outstanding accomplishments" praised in the Congressional Record could go a long way to polishing that reputation.

What might Ney have gotten in return? Well, he received $26,200 in campaign contributions from Stanford Financial Group employees. And, even more interestingly, the Sunlight Foundation's Paul Blumenthal notes that the majority of that sum, $14,200, came just over a month after the Congressional Record statement -- after Ney had gotten nothing from Stanford for all of 2005.

Blumenthal also notes that, during more trying times for the congressman, Stanford became a contributor to Ney's legal defense fund.

So, memo to federal investigators: if you see Bob Ney praising anyone else in the Congressional Record, it might be worth getting a little suspicious.

Allen Stanford

Bill That Might Have Helped Catch Stanford Died In Senate Finance Committee

Zachary Roth | February 24, 2009, 1:58PM

It's clear by this point that Allen Stanford put a lot of energy into wooing members of Congress. He was a prodigious political giver over the last decade, and even seems to have paid for some lucky lawmakers to soak up the sun in Antigua.

But few people, we're guessing, would choose to hang out with John Sweeney, Katherine Harris and co. just for fun. So what did Stanford want in return?

Over at TPMDC, Elana provided part of the answer in two posts that explain how Stanford's firm helped fight an effort to crack down on international money laundering during the late Clinton years, as well as how, shortly after, he met with Martin Frost, at the time the chair of the House Democratic caucus (and to whose political groups Stanford was contributing soft money), in a bid to convince Frost to oppose anti-money laundering initiatives.

But that was hardly the last congressional effort to deal with the problems of offshore business operations. In February 2007, Sen. Carl Levin, joined by then-senators Norm Coleman and Barack Obama, introduced the Stop Tax Haven Abuse Act, which would have closed offshore tax loopholes and forced companies to disclose far more information about their operations.

The bill listed 34 jurisdictions as probable locations for U.S. tax evasion -- one of which was Antigua and Barbuda, the Caribbean island nation where Stanford's sprawling financial empire was headquartered.

Although the measure was not primarily intended to root out large-scale frauds like the one Stanford is now accused of orchestrating, it likely would nonetheless have done so, as a "nice side benefit", according to Robert McIntyre of Citizens for Tax Justice, simply because it would have given US authorities access to far more information about offshore businesses.

What happened to the bill? Levin's office told us it came under the jurisdiction of the Senate Finance committee, which appears never to have brought it to a vote.

Since 2000, Finance chair Max Baucus has received $1000 from Stanford's firm, according to the Center for Responsive Politics. And Chuck Schumer has taken $17,000, more than all but sitting five members of Congress*.

During 2007, Stanford paid $500,000 to Ben Barnes' firm to lobby the Senate on a range of issues, including "lobbying issues related to banking" according to Senate lobbying disclosure records.

It's worth clarifying: Stanford is hardly the only businessman who'd potentially have had a lot to lose from efforts to crack down on offshore tax loopholes. Numerous Fortune 500 companies have offshore operations that could help them avoid paying US taxes, a recent GAO report found. And "fair tax" advocates tell TPMmuckraker that a broad range range of corporate interests has, over the last decade, been involved in preserving such loopholes. So even if Stanford's influence with lawmakers was a factor here, it's not as if he would have been working alone.

A spokesman for the Senate Finance committee pledged to provide TPMmuckraker with more information about the circumstances under which Levin's bill died. We'll update with anything else we learn.

* This sentence has been edited from an earlier version which referred to the contributions from Stanford received by Bill Nelson, a current finance committee member. Nelson did not join the committee until January of this year -- after the period in question.

Joe Biden

Report: Biden's Relatives Ran Fund Marketed By Stanford

Zachary Roth | February 24, 2009, 10:05AM

A fund of hedge funds run by Vice President Biden's son and brother -- Hunter Biden and James Biden -- was marketed exclusively by Allen Stanford's companies, reports the Wall Street Journal.

From the paper:

The $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and a Stanford Financial Group entity and was known as the Paradigm Stanford Capital Management Core Alternative Fund. Stanford-related companies marketed the fund to investors and also invested about $2.7 million of their own money in the fund, according to a lawyer for Paradigm. Paradigm Global Advisors is owned through a holding company by the vice president's son, Hunter, and Joe Biden's brother, James.

The fund has offered to turn over the $2.7 million investment it received from Mr. Stanford's firm in 2007 to a court-appointed receiver in the SEC's civil fraud case involving Mr. Stanford, according to Paradigm's attorney, Marc X. LoPresti. The fund terminated its relationship with Mr. Stanford's companies after the SEC filed civil charges against them last week, Mr. LoPresti said.

Paradigm's lawyer told the Journal that the Bidens never met or communicated with Mr. Stanford. "There is no connection between the Bidens and Allen Stanford or Stanford period, full stop," he said. "There never was any meeting between any member of the Biden family, no phone calls, zero correspondence."

Stanford was charged last week by the SEC with orchestrating an $8 billion investment scam. He has cultivated ties to a slew of Washington lawmakers.

A Paradigm marketer, Jeffrey Schneider, told the Journal he brought in the Stanford business.

According to Paradigm's lawyer, companies owned by Stanford put up $2.7 million in seed money and marketed the fund. SEC records show the fund, launched in June 2007, had 104 investors with assets of $49.8 million, as of November 2008.

It's hard to know what to make of this for now. But there seems to be more information yet to come out about the fee structure of the arrangement.

The paper reports:

Under an agreement, Stanford was entitled to share in a portion of the fund's management and performance fees, Mr. LoPresti [Paradigm's lawyer] said. "That's all I'm going to say on the fee side of things," he said.

Just what the White House needs.

Allen Stanford

For Stanford, A Long Trail Of Run-Ins With Authorities

Zachary Roth | February 23, 2009, 12:13PM

Relatively few Americans had heard of Allen Stanford until the last week or so. But it turns out that, over the last decade, the Texas billionaire had attracted the scrutiny of a range of government authorities, and been the subject of several civil suits -- so much so that it's hard to believe it took until last week for him to be formally charged.

Let's recap what we know about the various inquiries, investigations, and lawsuits focused on Stanford's sprawling financial empire over the last decade:

Circa 1998

- Stanford writes in a letter to the US ambassador to Antigua that he has been investigated by numerous agencies over the years, and none had found evidence of wrongdoing.

1999

- After Stanford finds that a former Mexican drug lord had used his bank to hide or launder money, he voluntarily makes out a cashier's check worth $3.1 million, and gives it to the Drug Enforcement Agency.

- The Treasury Department places Antigua -- where Stanford's business is based, and with whose government he is cozy -- on its money-laundering watch list.

Circa 1999

- Texas securities regulators find evidence of potential money laundering involving Stanford. They refer it to the FBI and the SEC, because it involves offshore banks. Texas securities commissioner Denise Voigt Crawford later tells the state legislative committee: "Why it took 10 years for the feds to move on it, I cannot answer." She added: "We worked with the FBI and the SEC and basically gave them the case. We told them what we'd seen and they were going to run with it."

2005

- A lawsuit filed in Florida accuses Stanford of aiding a Ponzi scheme.

2006

- The SEC's Fort Worth office opens an investigation into Stanford's business, but is asked by another agency to "stand down," and complies. (Rep. Dennis Kucinich, who chairs the House Domestic Policy subcommittee, asked late last week that the agency turn over documents related to that sequence of events.)

2006

- A second Florida lawsuit, this one filed by a former employee, accused Stanford of being involved in a Ponzi scheme.

2007

- Two former employees sue Stanford, alleging fraud.

- The SEC finds, during a routine exam, that Stanford's Houston-based broker-dealer operation is violating net capital requirements. The firm pays a $20,000 fine.

- Stanford Financial pays a $10,000 fine to FINRA in response to allegations that it gave out "misleading, unfair and unbalanced information" about its certificates of deposit.

2008

- Stanford Financial pays a $30,000 fine to FINRA in response to allegations that it didn't adequately disclose in its research reports its method for valuing certain securities, among other information.

- FBI opens an investigation into whether Stanford laundered drug money for Mexico's violent Gulf Cartel. Mexican authorities detained one of Stanford's private planes after officials found checks inside believed to be connected to the cartel. (The DEA also at some point probed Stanford for laundering drug money.)

- That inquiry into Stanford by the SEC's Fort Worth office is reopened, in the wake of widespread criticism of the agency for failing to catch Bernard Madoff's alleged $50 billion Ponzi scheme, and for de-emphasizing enforcement in recent years.

2009

- SEC files charges against Stanford, alleging "massive ongoing fraud."

As we reported last week, there's strong reason to believe that the SEC should have pushed harder on Stanford sooner. The long history of inquiries that failed to uncover Stanford's alleged $8 billion fraud only strengthens that notion.

Allen Stanford

Through Obscure Non-Profit, Stanford Wooed Lawmakers

Zachary Roth | February 20, 2009, 6:58PM

By now, we've all seen those pictures of Allen Stanford hobnobbing with lawmakers in Antigua. But, with the exception of one trip by Sen. John Cornyn, it wasn't Stanford himself who picked up the tab for these jaunts -- it was an obscure outfit called the Inter-American Economic Council.

And taking a closer look at the IAEC, and its ties to Stanford, sheds some light on how the Texas billionaire gained access to all those members of Congress -- and what he hoped to gain by doing so.

The IAEC's website says that the Washington-based group was founded in 1999 and that it aims to "provide senior Government Officials, leading Business Executives, and Academic Professionals the opportunity to engage in a dialogue about current and future economic strategies in the Hemisphere." And in 2003, the Associated Press reported (via Nexis) that, according to IAEC president Barry Featherman, the organization "relies mostly on contributions from U.S. corporations."

But the group appears to have remarkably close ties to Stanford himself. In this 2006 report, Bloomberg described Stanford as a "principal backer" of the organization. And Stanford Financial told Bloomberg that it had "donated the use of its aircraft" to the IAEC for one 2006 trip to Jamaica that four Democratic lawmakers went on.

That same year, the IAEC gave Stanford its "Excellence in Leadership" award. A press release put out by the group (since removed from its website) declared that Stanford "has strongly supported the work that the IAEC is doing in Latin America and the Caribbean."

Stanford also appears to have taken advantage of IAEC-funded events by showing up personally to schmooze lawmakers. We already posted these shots of current or former lawmakers including Katherine Harris, Pete Sessions, Tom Feeney, James Clyburn, and John Sweeney chilling with Stanford and Caribbean dignitaries in Antigua in 2005.

But there's also another set of interesting shots from the previous year, showing Stanford breaking bread with, and addressing, lawmakers -- including former GOP congressman Bob Ney (since jailed for taking bribes from Jack Abramoff) -- at an IAEC-sponsored event in Washington.

(You can see the slideshow of photographs from that event here.)

What was Stanford talking to lawmakers about? An IAEC press release from (via Nexis) from the event gives a hint. It says that in his speech, Stanford "addressed the need to streamline regulatory regimes that make it difficult for investors to take advantage of all of the opportunities that exist in the region."

And that same year, Newsday reported (via Nexis) on an IAEC-sponsored trip to Jamaica that included Democratic congressman Gregory Meeks. The IAEC, said the paper, hoped to "ease Patriot Act restrictions on offshore banking," and that according to Meeks, "the trip was an effort by the Inter-American Economic Council to explain the hardships the act has imposed on Caribbean banks."

In other words, Stanford and the IAEC used these events to try to convince lawmakers not to crack down on tax loopholes that work to benefit offshore banking -- exactly the loopholes that allowed Stanford to operate his alleged multi-billion-dollar scam, free from regulatory scrutiny, for so long .

In fact, the IAEC even seems to have used its clout to create a new congressional caucus -- the Caribbean Caucus -- made up of may of the lawmakers who went on the IAEC-backed trips.

After one such trip in 2003, attended by then-Rep. Phil Crane (R-IL), among others, Featherman, the IAEC president, revealed that "Congress is expected to form an informal, bipartisan Caribbean caucus to focus on issues of interest to the region," according to the AP (via Nexis).

The Caribbean Caucus would at various times include, among others, Ney, Meeks, Sweeney, Sessions, Feeney, Charlie Rangel, Mel Watt, Donald Payne, Phil English, Steve Chabot, Donna Christensen, Diane Watson, and Al Wynn, all of whom went to events on IAEC's dime.

Indeed, Stanford seems to have had some sway not only over the IAEC, but over the membership of the Caribbean Caucus itself. That Bloomberg story from 2006 reports that it was Stanford himself who asked Sessions to become a member of the caucus. Sessions seems to have agreed.

The IAEC is staying mum about its relationship to Stanford -- it hasn't returned either of TPMmuckraker's calls over the last few days. And the office of Rep. Payne, who was at one time listed as a co-chair, along with Ney, of the Caribbean Caucus, declined to make anyone available to answer TPMmuckraker's questions.

Allen Stanford

Five-Star Dining, Stanford Style!

Zachary Roth | February 20, 2009, 2:26PM

"It's not often that an owner sets an unlimited budget for creating a tabletop. The Pavilion in Antigua is that rare situation."

That's from a 2004 "Tabletop Performance Special Mention" -- which seems to be some kind award for setting the table. And we're betting you can guess who that free-spending owner is.

The write-up, posted on the site AllBusiness.com, continues:

This restaurant's owner, R. Allen Stanford, created this extremely luxurious, 5-star dining establishment in 2003. It not only serves local residents and guests but also Stanford's high-net-worth clients who fly into Antigua to visit the Stanford International Bank with interest in investing in one of his operations on this island located in the eastern Caribbean.

...

Located at the entrance to V.C. Bird International Airport and overlooking the Stanford Cricket Grounds, The Pavilion was designed in the style of the great Caribbean plantation homes of the 18th century. To showcase their wealth, taste and sophistication, European settlers built these grand residences, called "Great Houses."

It gives a shout-out to Stanford's one-time girlfriend, Andrea Stoelker, who was then managing the restaurant -- and whose brother owns the house in Fredericksburg, Virginia where Stanford has been staying in recent days:

Also instrumental in the design process was The Pavilion's manager, Andrea Stoelker, who charged Nodler and Bailey to "design a tabletop fit for a king." Literally, no expense was spared to accomplish this goal. With the owner's blessing to spend $160 per sterling-silver goblet, $32.50 per crystal stem, $65 per glass bread & butter plate and $10 per pure linen napkin, a spectacular table was set.

Literally!

In case you wanted more details about the table:

The chinaware is primarily Bernaudaud's sculptured undecorated Provence pattern, with the bread & butter plates and the tea cups customized for this installation. The glass service plates are a retail item that the interior designers located and specified and are used in the wine cellar with its reclaimed oak beam-and-timber ceiling, handmade used American bricks and antique French limestone floor, which also houses its 10,000-bottle collection of vintage wine. The glass B&B plates from Annieglass, used as accent pieces, are again retail items made from recycled windowpanes. The crystal stemware is from Riedel's Sommelier collection and is complemented by Christofle Hotel's heavy French silver-plated flatware in its Beau Harnais pattern. Of course the selection process was geared to serve the French creole cuisine of Executive Chef Andrew Knoll.

Of course.

And to top it off:

While the customer felt that Riedel's wine glassware was perfect, they wanted a totally unique water glass. The result was the location and purchase of custom sterling-silver goblets, which, according to Bailey, were handmade for the client in Istanbul, Turkey, each arriving in its own gift sack.

Allen Stanford

Stanford: How I Avoided Sub-Prime Debacle

Zachary Roth | February 20, 2009, 12:17PM

You've probably seen or read about the interview from last year in which Allen Stanford tells a sycophantic CNBC talking head that "it is fun being a billionaire".

But that same interview also features Stanford boasting -- with the interviewer's eager prompting -- about how, unlike so many other banks, his company was smart enough to "avoid the sub-prime debacle" because it couldn't assess the risk.

Said Stanford:

When you start packaging something with a lot of assets that are all mixed up, and you can't get your arms around what the real asset is, therefore what the risk is, we decided that whatever perceived there might be, we decided not to take that risk, because we didn't know what the risk really was and the perceived profits really became irrelevant.

If only all our bankers had showed the foresight and restraint of Sir Allen!

Check it out...

Allen Stanford

Sessions-Stanford: The Pics Keep Coming

Zachary Roth | February 20, 2009, 11:43AM

Just in case you were still wondering whether Pete Sessions and Allen Stanford know each other, here's another picture of them on that same Antiguan trip, this one posted on the website of the Antiguan government:

Sessions's press secretary told Bloomberg that the congressman did not know Stanford personally.

Allen Stanford

Stanford Pitched Sessions On Protecting Off-Shore Loopholes

Zachary Roth | February 20, 2009, 11:16AM

Earlier this morning, we caught the office of GOP congressman Pete Sessions falsely telling a reporter that Sessions didn't know Allen Stanford personally. (Check out this pic for the evidence he did.)

And here's another interesting example of Sessions and Stanford crossing paths.

A 2004 press release (via Nexis), put out by the Stanford-linked Inter-American Economic Council, touts a meeting the IAEC organized with Caribbean officials and members of Congress, including Sessions.

It declares:

Mr. Allen Stanford spoke about the need for additional assistance to the nations devastated by the hurricanes. He also addressed the need to streamline regulatory regimes that make it difficult for investors to take advantage of all of the opportunities that exist in the region.

In other words, Sessions was at a meeting at at which Stanford pressed lawmakers to leave open the loopholes that benefit off-shore corporations.

A few months later, Sessions and colleagues would fly to Antigua on the IAEC's dime to talk further about the issue.

It's also worth noting that Sessions and Texas GOP senator John Cornyn, unlike a slew of other lawmakers, have declined to return Stanford's money.

Allen Stanford

Pete Sessions' Office Falsely Claims He Didn't Know Stanford

Zachary Roth | February 20, 2009, 10:13AM

Here's a fun one...

With lawmakers scrambling to distance themselves from Allen Stanford, Bloomberg reports:

Representative Pete Sessions, a Texas Republican, got $41,375 [from Stanford's firm]. Spokeswoman Emily Davis said Sessions didn't know Stanford personally.

But check out this picture we posted the other day. It's from that 2005 junket that a group of lawmakers took to Antigua (paid for by the Stanford-linked Inter-American Economic Council) and it shows Sessions, now the NRCC chair, happily chatting with the cricket-loving billionaire.

And in 2006, Sessions' chief of staff told Bloomberg that the two men did know each other -- indeed, that Stanford asked Sessions to become a member of the Caribbean Caucus.

We're guessing that Davis' claim won't remain operative too long. We've contacted her and will let you know what we hear.

Thanks to reader T.D. for the tip.

Late Update: Davis responded via email: "No comment."

Allen Stanford

SEC Vet: Agency Should Have Looked Closer At Stanford

Zachary Roth | February 19, 2009, 4:50PM

Did the SEC fall down on the job by not paying closer attention to Allen Stanford, the billionaire Texas banker accused of orchestrating an $8 billion fraud? One former long-time enforcement director for the agency thinks it may well have.

Robert Fusfeld, who spent 31 years as an SEC enforcement lawyer, and for 15 managed the trial unit in the commission's Denver office before retiring in 2006, told TPMmuckraker that there was plenty of reason for the SEC to aggressively scrutinize Stanford's operation.

"A registered broker dealer and registered investment adviser is selling offshore Caribbean CDs in mammoth volumes, and nobody's looking at the bonafides of the bank," he said.

The New York Times reported today that the Stanford Group paid several fines over the last few years after regulators found that it did not have enough capital to meet the requirements of being a broker-dealer and used misleading sales literature. "There were numerous very significant red flags that included a history of violations," said Fusfeld.

The case, he said, contained the "same kind of red flags as Madoff" -- like consistently high returns -- but with the added red flag of the Antiguan CDs. "It's not Germany, France, or England," he continued, noting the history of "flagrant offshore CD frauds" over the last 10-15 years.

Because Stanford was a registered broker dealer and investment adviser, the SEC had full access to its operation, Fusfeld added. "They can walk right in."

The SEC was publicly flogged earlier this month for its failure to catch Bernard Madoff's alleged $50 billion Ponzi scheme. Since then, its appears to have been making a special effort to show it's capable of acting aggressively -- a concern which may have affected the timing of the Stanford complaint filed Tuesday.

It would certainly be ironic if, in this case too, it was found to have fallen down on the job.

Allen Stanford

Stanford Found In U.S.

Zachary Roth | February 19, 2009, 4:35PM

Reuters is reporting that Allen Stanford has been found in Virginia and served by the FBI with court papers.

MSNBC just confirmed that report moments ago.

Stanford has been accused by the SEC of orchestrating an $8 billion fraud, but still has not been criminally charged.

Late Update: ABC News has more Stanford details:

- According to one of his lobbyists, Ben Barnes, Stanford has turned in his passport and said he won't flee. He's described as "very depressed" and sought to end the manhunt by approaching DOJ officials himself.

- In addition:

In the meantime, the SEC has begun to seize an array of private property owned by Stanford and his firm.

Stanford's fleet of six private jets were recalled to the corporate hangar at Sugarland Airport outside Houston, including the Bombardier 500 luxury jet that was used exclusively by Stanford.

According to flight records, the Stanford jet flew into Washington, D.C. earlier this week and returned to Houston yesterday afternoon. Flight crews said Stanford was not seen on the plane when it unloaded.

- And Stanford has hired top DC criminal defense lawyer Brendan Sullivan, of Williams and Connolly. Sullivan represented Oliver North and Ted Stevens.

Separately, AP adds that Stanford was served with court papers in Fredericksburg, Virginia.

Allen Stanford

Lawmakers' Caribbean Junket With Allen Stanford: The Pictures That Reveal All

Zachary Roth | February 18, 2009, 2:45PM

We've put together a slideshow of that 2005 junket that a group of lawmakers -- including Katherine Harris, Tom Feeney, John Sweeney, James Clyburn, and Pete Sessions, went on to Antigua, paid for by an organization with close ties to Stanford.

Our favorite is the one of Harris and Sir Allen gazing into each other's eyes.

Check it out...

Allen Stanford

Six Degrees Of Allen Stanford

Zachary Roth | February 18, 2009, 2:24PM

Here at TPMmuckraker, the more we think about the Allen Stanford saga, the more it seems like a kind of harmonic convergence of recent high-profile muck.

The emerging story's range of ties -- some incidental, some more substantive -- to some other high-profile scandals of the past few years, from Bermard Madoff to Jack Abramoff to Rod Blagojevich -- is pretty striking.

First, Madoff.

It's not just that questions about the pace of the SEC's Stanford investigation -- including whether the agency's decision to bring charges yesterday was prompted in part by recent news reports -- have to be considered in light of the SEC's well-documented missteps on the Madoff case.

It's also that, according to the SEC complaint, Stanford's investors were exposed to losses via Madoff -- but falsely assured them they weren't.

From the complaint:

In a December 2008 Monthly Report, the bank told investors that their money was safe because SID "had no direct or indirect exposure to any of [Bernard] Madoffs investments."

But, contrary to this statement, at least $400,000 in Tier 2 was invested in Meridian, a New York-based hedge fund that used Tremont Partners as its asset manager. Tremont invested approximately 6-8% of the SIB assets they indirectly managed with Madoffs investment firm.

Pendergest, Davis and Stanford knew about this exposure to loss relating to the Meridian investment. On December 15, 2008, an Analyst informed Pendergast, Davis and Stanford in a weekly report that his "rough estimate is a loss of $400k ... based on the indirect exposure" to Madoff'.

As for Abramoff, we reported yesterday that a bevvy lawmakers with ties to the crooked lobbyist or a history of other ethical problems - including then-GOP members of Congress Bob Ney, Katherine Harris, Tom Feeney, and John Sweeney, as well as current Rep. Charlie Rangel -- went on a 2005 junket to Antigua that was funded by an organization with close links to Stanford.

Indeed, until yesterday, that organization, the Inter-American Economic Council, had photographs from the trip -- showing Harris, Feeney, and pals hobnobbing in splendor with Antiguan dignitaries -- posted on its website. It's since removed them, but not before we saved them. You can see the slideshow here.

And there's also another congressional angle which, though not on a par with the Abramoff sleaze, nonetheless appears to reflect the cynical money-for-access culture that has characterized Washington politics in recent years:

In 2002, as we reported yesterday, after lobbying from Stanford's firm, the Democratic-controlled Senate killed a bill designed to bolster efforts to catch financial fraud. During that cycle, Stanford's company had given an eye-popping $800,000 to the Democratic Senatorial Campaign Committee. And according to campaign finance records examined by TPMmuckraker, it had also given generously to key Democrats on the Senate Banking committee: $8000 to Chuck Schumer, $6000 to Chris Dodd, and $1000 to then-chair Paul Sarbanes.

So there's that.

What about Blago?

Well, it turns out that, according to lobby disclosure reports examined by TPMmuckraker, one of Stanford's paid lobbyists in 2002 -- the year that the firm was lobbying on the anti-financial-fraud bill -- was John Wyma. One form lists Wyma and his team's work as "Helping them address legislature (sic) which involves financial services companies."

In case you'd forgotten, Wyma used to be one of Blagojevich's closest aides, before cooperating with Pat Fitzgerald's investigation by secretly recording conversations with the then governor.

The two were apparently think as thieves at one time. The Chicago Tribune reported at the time of Blago's arrest:

The governor routinely reported exchanging personal gifts and often appeared at Wyma-sponsored fundraisers where Wyma's clients hobnobbed with the governor before turning over checks for his campaign fund.

Now all we need is a link to the U.S. Attorney firings, and we'll be all set.

Allen Stanford

Report: Stanford Tried To Get On Flight To Antigua

Zachary Roth | February 18, 2009, 11:26AM

CNBC reports that, according to a source, Allen Stanford, who was charged yesterday with perpetrating an $8 billion fraud, tried unsuccessfully to get a one-way flight out of the U.S. to Antigua.

Says the business channel:

R. Allen Stanford tried to arrange the direct flight to Antigua, here his offshore banking operations are based. He contacted a private jet owner and attempted to pay for the flight with a credit card, but was refused because the company would only accept a wire transfer, a source in the private jet industry said.

The suggestion that Stanford may still be on U.S. soil could be encouraging for those hoping to see the flamboyant cricket-loving billionaire brought to justice. There has been speculation in the last 24 hours that he may already have scarpered to Latin America or elsewhere.

Allen Stanford

After Lobbying From Stanford, Senate Killed Bill To Combat Financial Fraud

Zachary Roth | February 17, 2009, 5:08PM

A great catch on Stanford by Lindsay Renick Mayer of the Center for Responsive Politics.

To summarize: The cycle during which the Stanford Financial Group gave the most in political contributions was 2001-2002. That may have been because, at that time, Congress was debating the Financial Services Antifraud Network Act, which, according to CRP, would have "created a computer network linking the databases of state and federal banking, securities and insurance regulators to curb financial fraud."

That bill ended up passing the House, but not the Senate. And according to lobbying reports, says Renick Mayer, Stanford Financial Group lobbied on the bill. (It's not hard to guess their position.)

During that same cycle, Renick Mayer continues, the Democratic Senatorial Campaign Committee took in more than $800,000 from the firm. At the time, the DSCC was chaired by Florida Democratic senator Bill Nelson. And Nelson is the current member of Congress who has received more campaign cash from Stanford and its employees than any other, raking in $45,900.

Leaving Nelson aside, could that 2002 bill to combat financial fraud, which died in the Senate after lobbying from Stanford, have helped authorities uncover the firm's alleged fraud much sooner? Seems worth asking...

Allen Stanford

Stanford-Tied Group Funded Numerous Antiguan Trips For Lawmakers

Zachary Roth | February 17, 2009, 4:12PM

The number of lawmakers who may have taken trips to Antigua and Barbuda backed by alleged billion-dollar fraudster Allen Stanford just keeps getting bigger.

According to congressional travel disclosure reports posted on the Legistorm website, between 2003 and 2005 several members of Congress or their aides took trips to the island nation that were financed by the Inter-American Economic Council.

Among the lawmakers current or former: Bob Ney (R-OH), Pete Sessions (R-TX), Max Sandlin (D-TX), Donald Payne (D-NJ), John Sweeney (R-NY), Phil Crane (R-IL), and Gregory Meeks (D-NY).

Aides to Ney, Sessions, Sandlin, and Tom DeLay (R-TX) also soaked up the Antiguan sun.

Stanford is closely tied to the IAEC. In 2006, he received the organization's "Excellence in Leadership" Award. A press release put out by the group declared that Stanford "has strongly supported the work that the IAEC is doing in Latin America and the Caribbean."

There's no firm evidence that Stanford paid for all these lawmakers' trips. But he certainly seems to have been a major financial backer and ally of the outfit that did.

We've called the IAEC to ask about its ties to Stanford and will let you know what we find out.

Bob Ney

"Caribbean Caucus" Lawmakers Took Trips On Stanford Jets

Zachary Roth | February 17, 2009, 3:03PM

Last May, buried in a long Bloomberg report about Stanford's tussles with Stanford University over his claim to be descended from the school's founder, was this nugget:

Members of the House Caribbean Caucus take annual trips to the region on Stanford's jets. Lawmakers are required to reimburse companies at a first-class commercial rate, which is often a fraction of the actual cost.

The House Caribbean Caucus? We don't mind telling you, we weren't even aware of its existence.

But according to this announcement from the Inter-American Economic Council, which appears to be from circa 2005, it has some pretty interesting co-chairs:

Co-Chairs of the Congressional Caribbean Caucus Congressman Donald Payne (D-NJ), Congressman Robert Ney (R-OH), Congressman Pete Sessions (R-TX), Congressman Tom Feeney (R-FL), Congressman Charlie Rangel (D-NY), Congressman John Sweeney (R-NY), Congressman Mel Watt (D-NC), Congressman Phil English (R-PA), Congressman Steve Chabot (R-OH) Congresswomen Donna Christensen (D-VI), and Congresswoman Diane Watson (D-CA).

That's something of a rogue's gallery...

Ney, of course, did jail time after pleading guilty to lying about his involvement in the Jack Abramoff scandal.

Feeney also was implicated in the Abramoff scandal, and was named one of the "20 Most Corrupt Members of Congress" in a report by Citizens for Responsibility and Ethics in Washington.

Sweeney also made CREW's list, and went on an Abramoff-funded junket to the Northern Mariana islands with Tony Rudy.

Rangel is currently being investigated by the House ethics committee in connection with, among other issues, unpaid taxes on income from a Caribbean vacation home.

This story just gets more and more interesting...

Allen Stanford

Cornyn Took Caribbean Junket On Stanford's Dime

Zachary Roth | February 17, 2009, 2:20PM

So we already knew that Allen Stanford -- the Texas banker charged by the SEC today with running an $8 billion "fraud of shocking magnitude" -- had some pretty impressive political contacts with both parties.

But it looks like his relationship with one of his home-state senators, Republican John Cornyn, may have been especially cozy.

According to Cornyn's Senate disclosure reports -- posted on the site Legistorm.com, which tracks privately financed trips by members of Congress -- the Stanford Financial Group paid for the Texas senator and an unnamed companion to take a November 2004 trip down to Antigua and Barbuda, the tiny Carribean nation where the company has its headquarters.

The three day trip is described by Legistorm as a "financial services industry fact-finding mission hosted by constituent company with substantial operations on site."

The site adds:

Sen. Cornyn discloses expenses for himself and a companion, but does not disclose the identity of the companion.

The total cost of the trip: $7,441.00

It would be hard to blame Cornyn if financial regulation wasn't the only thing on his mind while he was in Antigua. The trip occurred right after the November 2004 election, during which Cornyn was working hard for George W. Bush. And just last Sunday, the New York Times travel section described Antigua as a group of "famously paradisiacal islands that actually lives up to the hype."

The paper continued:

An array of über-luxurious resorts have cashed in on the lush surroundings, and provide their well-heeled guests with so many hedonistic diversions that many never emerge to see what lies beyond the resort gates.

Sounds like just the spot for some fact-finding!

We've told you all about Stanford's generous record of contributions to lawmakers from both sides of the aisle -- and especially to those with authority over the banking sector. The New York Times has gone further, reporting that Stanford's contributions appear to focus "particularly on legislators considering bills that would change offshore banking rules."

Cornyn this year became a member of the Senate Finance committee, though in 2004 he was not a member.

We've put in a call to Cornyn's office to ask what he learned on the "fact-finding mission" Stanford paid for -- and who his mystery companion was -- and will update with anything we learn.

Thanks to reader B.K. for the tip.

Late Update: It looks like Cornyn's spokesman was asked by the Center for Public Integrity back in 2006 about the identity of Cornyn's companion, and responded that it was Cornyn's wife.

Interestingly, CPI said the trip was "to tour the offices of trip sponsor Stanford Financial Group."

Thanks to commenter Snig for pointing that out.