Posted by: Matthew Goldstein on February 21
The political blogs are going ga-ga over all the political contributions that disgraced financier R. Allen Stanford and his employees have given to both Democrats and Republicans. In all, more than $1.1 million since 2002, according to the political donation tracking website opensecrets.org .
The contributions make for good gossip and speculation about what kind of favors the 58-year-old Texas-born billionaire may have gotten. That speculation is particularly titillating in light of the civil fraud charges pending against Stanford.
If the SEC’s allegations are true, it would appear that Stanford’s purported $50 billion empire, which drew in wealthy investors from the US, Venezeula, Mexico and Ecuador, was built on pack of lies. Or, more appropriately, out of sand castles on the beaches of Antigua, where his now infamous offshore bank that issued dubious certificates of deposits was based.
But here’s the thing: the political donations likely are just one big distraction. Sure, all the donations may have gotten Stanford some influence in helping to shape US laws that impacted offshore banking. But there’s no evidence that any of that money helped keep investigators at bay.
We know that Stanford and his company were investigated by multiple agencies for more than 20 years. There’s no evidence that any politicians put the kibosh on any inquiries by the SEC, FBI, IRS or DEA. In fact, a number of political sources, say such a suggestion is ludicrous.
The donations were probably just another part of Stanford’s strategy to portray himself as larger than life in order to impress investors. It’s no different than all the tens of millions he spent on sports endorsements, cricket matches and charitable events. It was just another way to get the Stanford name spread around the world—and it worked.
Frankly, we don’t know why investigators came up empty all those years until now. But it’s doubtful that Stanford’s political largess had anything to do with it.
But if the Washington press corps and political blogosphere wants to obsess about political donations by Stanford, here’s one DC mystery that’s never been fully explained. Stanford and his employees were one of the largest contributors to former NJ Senator Robert Torricelli’s legal defense fund. The NJ senator stepped aside in the middle of his 2003 re-election campaign because of all the ethical questions surrounding him.
No one has ever offered up a good explanation for a then unknown Texas-based firm contributing heavily to an embattled NJ senator.
BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.