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Aram Roston

Aram Roston

Posted: June 25, 2009 07:58 AM

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

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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.