Texas Businessman Sought Influence in Corridors of Capitol By GLENN R. SIMPSON and T.W. FARNAM WASHINGTON -- Texas businessman R. Allen Stanford, whose multibillion-dollar investment empire was ordered seized Monday by a federal judge, has long enjoyed big influence in Washington thanks to a steady supply of campaign contributions, Caribbean trips for lawmakers and fees to lobbying firms. Mr. Stanford and his affiliated companies have spent more than $5 million on lobbying fees since 2000, federal records show. The businessman and his top executives have also contributed at least $2 million to candidates, including key lawmakers, and additional thousands of dollars on jets and resorts. The Antigua Sun, controlled by Texas financier R. Allen Stanford, published this photo in a June 2008 article describing an encounter with then-Sen. Barack Obama after a Miami speech by the presidential candidate. A White House spokesman said, "This is one of hundreds of thousands of photos the president took at events during the campaign." The businessman's primary goal for the last three to four years has been to minimize taxes to the Internal Revenue Service, according to interviews with lobbyists and lobby filings. Tax-Rule Lobbying For the past few years, Mr. Stanford, who moved to St. Croix in the U.S. Virgin Islands, has been lobbying to preserve and expand tax rules that enable him to pay minimal federal income taxes as a resident there, according to lobbyists. While allies of Mr. Stanford in Congress have managed to fend off attacks on rules, his efforts to expand them further have thus far been unsuccessful, lobbyists said. Among the recipients of Mr. Stanford's largesse is House Ways and Means Committee Chairman Charles Rangel (D., N.Y.), who has long advocated lenient tax policies toward Virgin Islands residents and in 2007 introduced a bill to enforce a statute of limitations on IRS scrutiny of islanders' old tax returns. That year, Mr. Rangel traveled to Antigua for a development conference partly sponsored by Mr. Stanford, who also donated $28,300 to Mr. Rangel in 2008. "I met Stanford a couple of times," Mr. Rangel said. "He has never discussed any legislative issue with me nor has anyone to my knowledge representing him ever discussed any legislation." Mr. Stanford wrote two $250,000 checks to the Democratic Party in 2002. Related Article SEC Accuses Texas Financier of 'Massive' $8 Billion FraudHe also was a big supporter of New York Democrat Gregory Meeks, a member of a House Financial Services subcommittee dealing with offshore banks that received an estimated $17,600 from a Stanford fund-raiser held in the Virgin Islands in July. Mr. Meeks's campaign later reimbursed the organizers of the event $3,591 for the cost of food and beverages, according to the campaign's financial disclosures. From 2003 to 2006, Mr. Meeks and his wife traveled to the Caribbean every January on trips paid for by the Inter-American Economic Council, a group backed by Mr. Stanford, federal records show. The first trip was for "fact finding" and subsequent trips were for a "business roundtable," often including hotel and meal charges of over $2,000. On at least one occasion, the trip was taken on Mr. Stanford's jet. "For me, I have a vested interest in the Caribbean," Mr. Meeks said, noting that he is a member of the Caribbean Caucus and that he represents a district in Queens with a large population of immigrants from the islands. "I can just say that Allen Stanford has always treated me fair and decently and above the board," Mr. Meeks said. "I have no idea what the investigation is about, but if I was asked about Allen Stanford I would say that he was a guy who was wealthy but he was also helping people." The Stanford Financial Group also donated $10,000 in July to the Congressional Baseball Game, an annual event with proceeds donated to charity, according to lobbying records. Influential Democratic lobbyist and fund-raiser Ben Barnes of Texas is among Mr. Stanford's roster of advocates, lobbying records show, with $1.125 million in fees over the past two years. In his lobby filings for Stanford Financial Group, Mr. Barnes states that he works on "economic development in the Caribbean, specifically the Virgin Islands." The tax law on which Mr. Sanford is lobbying, which allows Virgin Islands residents to pay an effective rate of 3.5%, is construed by the territories as an economic-development measure. Offshore Income In an interview, Mr. Barnes said he assisted Mr. Stanford in setting up a government-relations office in Washington on various Caribbean economic development matters. Among other things, he said, Mr. Stanford sought unsuccessfully to change the tax rules so that his income from offshore sources would be included in the low tax rates applied to Virgin Islands residents. Mr. Barnes said he had no involvement in Mr. Stanford's business activities but has been friends with him for 20 years. "I am shocked and saddened by this," he said. "This is an overwhelming event." Mr. Stanford is also fighting an IRS claim for more than $70 million in back taxes and penalties for the years 2000 and 2001, according to documents on file at U.S. Tax Court in Washington, D.C. The IRS claims Mr. Sanford had more than $150 million in capital gains from Stanford International Bank in those two years. Larry Campagna, the tax lawyer for Mr. Stanford, said his client disputes the claims but is in pretrial settlement talks with the agency. Other top recipients of the Stanford employees' political giving are Sen. Bill Nelson (D., Fla.), who received $43,000, and Rep. Pete Sessions (R., Texas), who received $39,000. Mr. Nelson said Tuesday that he would donate the money to charity. On the state level, the largest recipient of Mr. Stanford's help was former California Gov. Gray Davis. The Stanford Financial Group gave $200,000 for his 2002 campaign and another $100,000 to fight his recall by ballot initiative the next year. Mr. Sessions and Mr. Davis didn't respond to a request for comment before press time. Write to Glenn R. Simpson at glenn.simpson@wsj.com and T.W. Farnam at timothy.farnam@wsj.com
The gall these members of Congress have when looking down upon the banking CEO's when they are befriending the biggest crooks in our country and profiting from it. Madoff, Stanford, etc...created their wealth by cheating the very public Congress is commissioned to protect and instead Congress is soaking up the bribes and soaking up the sun while looking the other way. When will these bafoons get it. When the wealthy come knocking with money and asking for favors 'it is too good to be true'.