New Documents on Accused Ponzi Schemer Allen Stanford: Did Bush's Justice Dept. Take "Appropriate Investigative Steps"?

Previously undisclosed documents show that the Bush-era Justice Department promised to take "appropriate investigative steps" concerning possible corruption by now indicted banker Allen Stanford in 2004, but Stanford wasn't shut down until 2009. So what happened?

Stanford, a Texas billionaire, offshore banker, and gargantuan political donor to both Democrats and Republicans, was indicted last week. But prosecutors also charged the top banking regulator in Stanford's adopted island nation of Antigua with being in on the scheme: they said the Antiguan official had collected thousands per month to protect Stanford. It wasn't necessarily a big surprise, though, since some Americans had been saying for years that Stanford had sheltered his Antigua operations by buying favors in the tiny country.

Now an Antiguan American lawyer has given me documents that laid out allegations to the Justice Department five years ago that Stanford was corrupting Antigua officials, and potentially violating the Foreign Corrupt Practices Act. The documents showed that the Justice Department back then promised "appropriate investigative steps" to respond to the tip. No one will know if it took steps, but certainly nothing happened. At a minimum it raises questions about whether Stanford could have been stopped 5 years ago.

Here's what happened: in 2004 a member of what was then Antigua's opposition party, Mcchesney Emanuel, complained Stanford was giving hundreds of thousands to Antiguan government ministers. (Emanuel is now Antigua's consul in NY.) He even warned American congressman who flew to Antigua with Stanford about Stanford's excessive influence. Emanuel's lawyer, Conrad Airall, sent a letter to 12 American members of Congress, passing a message to the Bush Administration's Justice Department alleging that Stanford was bribing Antiguan authorities. He gave me a copy.

In the letter, he named Antiguan two ministers, (neither one was the man charged in the Stanford indictment) and said "Mr. Stanford paid two government officials EC$100,000 each while they were negotiating a multimillion dollar land exchange deal with Mr. Stanford on behalf of the government of Antigua." That, he said, violated US law, which forbids bribes to foreign officials. It amounted, he concluded to a patent violation of the "Foreign Corrupt Practices Act," which bans Americans from bribing foreign government officials.

Airall later got a polite letter from the head of the Criminal Division of the Department of Justice: "We appreciate you having brought these allegations to our attention," said the letter, "and will take appropriate investigative steps in connection with this matter."

Here is the letter: Download file(PDF)

Airall says he followed through with a phone call to the DOJ and got no more information. "They said, 'We don't want to comment on things under investigation.'"

Whatever the Department of Justice learned, it did nothing. And a spokesman noted the Department can't comment on investigation.

Stanford had plenty of political friends in Antigua and the US, as I reported in GQ Magazine in June. Note that in my interview with him there, he said he could still reach some US politicians, even after the SEC shut him down. (Of course that was before he was actually arrested.)

It is worth asking whether Stanford, who contributed mightily to American politicians and hired expensive D.C. lobbyists, had any protection in the US as well as in Antigua.

 

 

Comments

[hopeforchangenow]

So do you think the DOJ might start working on this. Probably not. They only people who lost were the middle class tax payers. No one in Washington DC gives a rats butt about them.

[lvdragonlady]

Probably not based on the fact that Sanford is a Texan.
We all know there is no way shrubie would do the right thing IF a fellow Texan was involved.

[blueskybigstar]

Please, post my comment referencing what people need to look up to know more about the story and subject.

[sabredance]

Did Bush's Justice Dept. Take "Appropriate Investigative Steps"? Are you kidding? Of course not.

For starters the SEC was told to back off in 2006 (http://www.businessinsider.com/sec-was-told-to-back-off-stanford-in-2006-2009-2). What makes you think they were the only ones so directed?

He might have been a CIA asset... (http://www.telegraph.co.uk/sport/cricket/twenty20/3406293/Sir-Allen-Stanford-in-spotlight-over-CIA-spying-row-Cricket.html)

Plus he may have been involved in drug money laundering, and it seems some GOP senators were balking at returning his donations...

What would be a surprise is if he didn't buy or acquire protection from somebody...

[vfs11]

Stanford was a CI for the DEA...money laundering for narco traffic...DEA went to him in 2006

[the964kid]

President Bush wrote a letter to Stanford praising his banks as examples of how Americans would have solid financial futures, and Stanford's companies used that letter in their promotional materials. So yeh, I'd say Bush and his DOJ completely dropped the ball on Stanford. It's pretty rare when a sitting president actually personally endorses a financial institution - people (who probably voted for Bush) saw that letter and thought their money was safe.

[Raccoon1]

Bush's people were busy putting Martha Stewart in prison. Give 'em a break. They can't do everything at once. ;-)

[nopilikia]

Your right on. They wanted those big dollar crimes. Stanford and Madoff didn't have enough zeros behind their scams. Wait, Martha had way less zeros. What gives?

[schatsie]

Shakedowns same as they did with the IRS audits....the big contributors bought their way out...Why do you think Buffett has unpaid taxes of almost a Billion....

[hopeforchangenow]

Martha tried to play games with the "good ol' boys club". They did not like the female trying to move into their territory - so they ratted her out.

[nomorefed]

As the growth of the financial bubble coincided with the repeal of the Glass-Steagall Act of 1933, maybe it would be wise act to reinstate it as it kept the Banks under control for 66 years.

he's: http://investmintideas.blogspot.com/ absolutely right

Glass-Steagall Act
A 1933 act that prohibited commercial banks from undertaking investment banking activities such as underwriting the securities of private corporations. The legislation was passed to keep banks from entering into nonfinancial businesses (for example, owning corporate stock) and more risky activities. The Glass-Steagall Act was repealed in 1999. Also called Banking Act of 1933.

[Sundialsvc4]

Ahh, nomorefed, you seem to be having a bit of a bad day. Well, I've just added another twenty (million dollars) to your "account," so I am sure that we can keep that little bill in committee for another three months, yes?

[Fremon]

Let's put it this way, if there WAS an opportunity for the Bush SEC and Justice to drop the ball and not execute on their fidiciary responsibilities, they probably did so. With Gonzo and Cox at the helms of Justice and SEC we have two of the most incompetent officials that got their marching orders direct from an indeological and incompetent white house.

[schatsie]

What makes you think they were incompetent? They are laughing their way to the banks...

[lvdragonlady]

America should make ALL off shore banks illegal and/or off limits.
Maybe the people that lose money could bring a suit against the individuals of the Justice Dept? yes?

[Henry]

"It is worth asking whether Stanford, ...., had any protection in the US"

I think that Markopolis has already made this case with respect to Madoff and the SEC. The agencies, the sec or the doj, are beset with major incompetence or, they are operative arms of the government that is run by lobby groups. Is there any other explaination for this?

Remember the woman in the fbi who wrote memos up warning of foreign muslims training to fly but not land commercial air lines? It seems that the staff and line are in order but that the upper level management has an agenda that would not prove consistent with the charter of the agency.