Stanford fraud scandal: Stumped by Sir Allen

Posted by: Ian Rowley on February 18, 2009

Perhaps it shows lack of journalistic instinct on my part but when I interviewed Sir Allen Stanford—the Texan billionaire at the center of a $8 billion fraud allegation—in September we only talked about the business of cricket. After all, there were already signs that Sir Allen (he was knighted by the Antigua authorities) might not be all he seemed. Around the same time, for instance, Private Eye, the excellent British satirical magazine, published a two-page story which raised questions about some of the Stanford group’s business practices.

In my defense, the cricket story was fascinating (Disclaimer: I am British so I care about this kind of thing). For those who don’t follow the game, Sir Allen is already notorious in cricket circles after his attempts to bankroll a new annual tournament backfired last fall. He first ruffled a few feathers when he turned up at Lords, the rather stuffy home of cricket in London: emerging from a helicopter with a case containing $20 million in is not an everyday event in the cricket world and Lords’ members thought it was all rather vulgar. Unconfirmed reports said some spluttered into their gin and tonics.

Sir Allen nevertheless struck a $100 million deal for a new tournament, which turned out to be even more controversial. Its concept was a bit too flashy for many in the cricket fraternity. The Stanford Superstars, made up of cricketers from the Caribbean, would take on the England national team in a one-off winner-takes-all $20 million match. The bumper payday, huge by cricket standards, was to be repeated every year for five years at Stanford’s own stadium in Antigua. Its critics said this just wasn’t cricket, particularly as the contest was an abridged form of the game lasting barely three hours. In its longest (some might say most proper) form, a game of cricket can last five days, complete with lunch and tea breaks, and even then can still end in a draw.

Still, it was Sir Allen’s antics at the tournament that sparked up the merciless British tabloids. The England players were upset when, during a game, Sir Allen popped up on the big screen inside the ground enjoying himself rather too enthusiastically with a bevy of young women in the crowd. Unfortunately, the women were the players’ wives and girlfriends. That the $20 million match was a bit of damp squib, due to a pudding of a pitch, only made matters worse and, even before recent events, it seemed this year’s match would be scrapped.

Of course, Stanford, who has been charged by the SEC, now has rather more to worry about. Reading reports over the last week from my BusinessWeek colleague Matt Goldstein, things don’t look at all good for him, his company or its investors.

That said, when I chatted with him for 45 minutes over the phone in September, he came across as genuine as one can during a long distance call. He seemed committed to promoting cricket and enthused when talking about legends of the game in the Caribbean who were now his friends (and in some cases also on his payroll). He even appeared to be taking seriously a baffling idea to try to sell cricket to Americans, spending several millions on a project in Fort Collins, Colorado.

Perhaps if there is one winner in all of this its the Indian Premier League, an upstart cricket league that caused a huge storm in India last year bringing with it untold glamor and a massive media rights deal. Unlike his counterparts in Britain, IPL chief Lalit Modi steered well clear of Stanford’s money and seems to have done the impossible—reinventing a 400-year-old game for a new market of non-cricket fans. Stanford, by contrast, looks to have proved his naysayers right.

Reader Comments

larry

February 18, 2009 11:35 AM

How high can a pyramid be?
Madoff = $tandford x 7.5

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