Posted on Sun, Dec. 27, 2009 Feds probing many ties of banker Allen Stanford and U.S. Congress BY MICHAEL SALLAH AND ROB BARRY msallah@MiamiHerald.com Just hours after federal agents charged banker Allen Stanford with fleecing investors of $7 billion, the disgraced financier received a message from one of Congress' most powerful members, Pete Sessions. ``I love you and believe in you,'' said the e-mail sent on Feb. 17. ``If you want my ear/voice -- e-mail,'' it said, signed ``Pete.'' The message from the chair of the National Republican Congressional Committee represents one of the many ties between members of Congress and the indicted banker that have caught the attention of federal agents. The Justice Department is investigating millions of dollars Stanford and his staff contributed to lawmakers over the past decade to determine if the banker received special favors from politicians while building his spectacular offshore bank in Antigua, The Miami Herald has learned. Agents are examining campaign dollars, as well as lavish Caribbean trips funded by Stanford for politicians and their spouses, feting them with lobster dinners and caviar. The money Stanford gave Sessions and other lawmakers was stolen from his clients while he carried out what prosecutors now say was one of the nation's largest Ponzi schemes. Sessions, 54, a longtime House member from Dallas who met with Stanford during two trips to the Caribbean, did not respond to interview requests. Supporters say the lawmaker, who received $44,375 from Stanford and his staff, was not assigned to any of the committees with oversight over Stanford's bank and brokerages. His press secretary, Emily Davis, said she was unable to comment on the e-mail sent at 11:31 a.m. on the day Stanford was charged by the U.S. Securities and Exchange Commission. ``I haven't seen it, so I can't verify its authenticity at this time,'' she said. But the message found on Stanford's computer servers and the contributions he made to Sessions and other lawmakers -- totaling $2.3 million -- are now part of the government's inquiry. Records show Stanford also doled out $5 million on lobbying since 2001, setting up his own Washington firm last year with expensive furnishings and artwork -- the money plundered from his customers' accounts. D.C. CONNECTIONS Over the years, he took on battles to protect his banking network while fending off regulators. In 2001, he pressed successfully to kill a bill that would have exposed the flow of millions into his secretive offshore bank in Antigua. The next year, he helped block legislation that would have drawn more government scrutiny to his bank. While he was fighting reforms to financial secrecy and offshore banking laws, Stanford was hobnobbing with dozens of lawmakers. Stanford hosted New York Congressman John Sweeney's wedding dinner at his five-star restaurant in Antigua in 2004 -- toasting the couple for photographers -- and staged a cocktail fundraiser for now-disgraced Ohio congressman Bob Ney at his bayfront Miami office. ``He legitimized himself by having himself vetted by powerful members of Congress,'' said Steven Riger, a former vice president at Stanford's Miami brokerage. ``It was all about the public's perception.'' Kent Schaffer, Stanford's court-appointed attorney, said his client never asked for special favors. ``Stanford gave contributions to politicians, but there was nothing criminal behind it,'' he said. The federal investigation comes after months of criticism from victims' groups complaining that elected leaders failed to vet Stanford before accepting money from him the past 10 years. If they had, they would have discovered that the U.S. State Department in 1999 concluded that Stanford helped create a haven for money-laundering in Antigua. Most members of Congress contacted by The Herald declined to discuss their ties to the banker, other than to say they have since returned the contributions. FIGHTING REFORMS Stanford's foray into the Washington power game began in 2001, shortly after he was allowed to open a controversial trust office in Miami. The special office was a boon to Stanford's bank, generating millions in the sale of certificates of deposit -- the money stuffed in pouches and sent on jets to his banking headquarters in Antigua. But when a bill was created to compel offshore bankers to reveal the sources of money flowing into their banks, Stanford jumped into the fight to kill it. The measure would have forced Stanford -- who was moving millions illegally through his Miami trust office -- to open his books to federal regulators. ``He wanted the complete freedom to move money offshore without any threat,'' said Jack Blum, a lawyer who testified before Congress supporting the legislation. ``He was cheerleading for the offshore tax havens.'' To combat the bill, Stanford launched a strategy he would use for the next eight years: He gave money to the party in power, including $40,000 to the Senate Republican Campaign Committee and $100,000 to the inaugural committee of George W. Bush, records show. By summer of 2001, the bill was dead. In the ensuing years, Stanford's banking empire flourished, with the Miami office generating hundreds of millions of dollars, records show. In late 2001, Stanford confronted another threat: A bill allowing state and federal regulators to share details about fraud cases -- which would have brought Stanford's brokerages under closer scrutiny -- landed in the Senate Banking Committee. Though the Senate was now controlled by Democrats, Stanford was prepared: He had given $500,000 to the Democratic Senatorial Campaign Committee in 2002 -- his largest-ever contribution. ``I told him that the Democrats were going to take over, and he needed to make friends with them,'' recalled his lobbyist Ben Barnes, once Texas' lieutenant governor. Stanford also doled out $100,000 to a national lobbying group to fight the measure. The bill, which sparked sweeping opposition from brokerages and insurers, never made it to a vote.