US politicians refuse to hand back Stanford campaign cash
Obama on list of those who received money from Texan financier on trial for fraud
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Wednesday 15 February 2012
American politicians including Barack Obama are refusing to hand over $1.8m in campaign donations to the alleged victims of Allen Stanford, the cricket-loving Texan financier who is on trial for fraud.
Thousands of Mr Stanford's investors lost their savings in what prosecutors say was the second-biggest pyramid scheme in history after the one engineered by Bernard Madoff, and the receiver charged with getting back some of their money wants politicians to return contributions made by the financier and his companies.
In a move calculated to shame the Obama campaign into co-operating, a lawyer for the receiver said the President had no more right to the money than someone who was given it by "a guy who goes into a 7-Eleven and robs the store".
Mr Obama was given $4,600 by Mr Stanford for his presidential campaign at the same time that the freshman Senator was intent on introducing reforms to offshore banking laws.
Stanford Financial Group and its founder showered money on lawmakers and political parties, it has emerged, and in particular on Congressmen from his home state of Texas and those on powerful banking committees.
The receiver says a small number of beneficiaries of Mr Stanford's largesse have paid back the money – House Speaker John Boehner and Senator John McCain among them – but the $154,000 returned is dwarfed by the $1.8m (£1.2m) still outstanding.
The $4,600 sought from the Obama campaign reflects only direct contributions from Mr Stanford himself. The total may be up to $31,000, when his contributions to Mr Obama's other campaign committees are included, along with money from Stanford executives, and the Stanford Financial Group's now defunct political action committee.
The $4,600 was donated to charity days after Mr Stanford was charged with fraud in 2009, but the receiver says the money should be handed over to compensate victims. Kevin Sadler, lead counsel for the receivership, told Reuters: "The money was never theirs to begin with."
Last year, a court ruled that the receiver can claw back money from political campaigns, but the decision is being appealed and the law in this area has never been clarified.
Mr Stanford's trial in Houston is entering its fourth week, with prosecutors building their case that his financial empire was built on lies. What Mr Stanford said was a $7bn savings pot in fact had reserves of just $88m, it is claimed.
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