When Texas financier R. Allen Stanford came to Washington in February 2006 to be feted at a celebratory dinner by a group called the Inter-American Economic Council, a few of his friends were in the crowd. They included lobbyists and such members of Congress as then-Reps. Bob Ney and Michael Oxley, both Ohio Republicans.
At the affair, Stanford received a special leadership award from the council, a business-backed group whose activities included underwriting trips for lawmakers to such countries as Antigua, where the Texan ran the Stanford International Bank.
The award was a way for the council to thank Stanford for his largess the prior year. In 2005, 85 percent of the council's budget of $472,000 came from Stanford and his companies, Barry Featherman, the group's president, told National Journal.
Further, Stanford had provided some of his own private planes to the council, enabling about two dozen congressional Republicans, Democrats and staffers to fly to Antigua on educational and pleasure trips.
But until last month, when the Securities and Exchange Commission charged Stanford's bank with misleading investors in an ongoing $8 billion fraud involving certificates of deposit, the Texan had spent years wooing lawmakers and other influential politicos around the world to help expand his businesses, fend off government regulators and seek tax breaks.
"We were as shocked as anybody," Featherman said of the SEC action. "The allegations are disgraceful." Featherman noted that 2005 was the peak year for Stanford's support of the council. Last year, for instance, Stanford donated about 10 percent of the group's overall budget of $578,000, according to Featherman.
Until several months ago, Stanford was busy wooing friends in Washington, some of whom he tapped for business advice. For example, Oxley, who retired from Congress at the end of 2006, was one of several prominent figures who joined an international advisory board of Houston-based Stanford Financial Group. The group, according to two board members, was set up partly to spur business in overseas markets.
Oxley, who was chairman of the House Financial Services Committee and is now of counsel at Baker Hostetler in Washington (which, sources say, has done some legal work for Stanford), joined the board about six months ago and attended one meeting in New York. He resigned from the board upon learning of the SEC charges, according to sources familiar with the group.
Others on the international advisory board, which typically met twice a year in Washington or New York, included Peter Romero, a former ambassador to Ecuador and a State Department official in the Clinton administration; Lee Brown, a former drug czar under Clinton; Jorge Castaneda, a former foreign minister for Mexico; Luis Giusti, a former Venezuelan oil executive; and Adolf Ogi, who was once president of Switzerland. All resigned from the board around the time of the SEC charges.
Stanford opened an office in Switzerland about a year ago, and much of his business in CDs was in Venezuela, Ecuador and other countries.
"He used people for foreign markets and advice," said one board member who requested anonymity. The board member declined to say how much he received in compensation.
Others politicians were helpful to Stanford in the United States. For instance, Ney, who took one trip to Antigua underwritten by the council, placed a statement in the Congressional Record in September 2005 congratulating Stanford "for his outstanding accomplishments." After not getting any campaign donations from Stanford in 2005, within several weeks of placing the statement Ney received $14,200 from Stanford and his employees, according to the nonprofit group Sunlight Foundation, which tracks money in politics.
Stanford later contributed to a legal defense fund that Ney set up in 2006 when the congressman was being probed for his ties to disgraced lobbyist Jack Abramoff. Ney was eventually convicted and jailed for 18 months for taking illegal gifts from Abramoff and other lobbyists in return for legislative favors. Among the favors was putting a statement in the Congressional Record that was intended to help Abramoff buy a casino cruise company in 2000.