The news of the federal fraud charges against billionaire Texan financier Sir Allen Stanford (he got the knighthood from his dual citizenship from Antigua) has been greeted with glee by pro-regulatory forces because he dared to lobby against financial regulations in the early part of the decade. The Huffington Post huffs and puffs:
Though tough anti-money-laundering legislation overwhelmingly sailed through the House Banking Committee in 2000, it had difficulty getting to another vote as powerful GOP lawmakers — then-House Majority Leader Dick Armey, then-House Majority Whip Tom DeLay and then-Senate Banking Committee chair Phil Gramm stymied its future.
DeLay was among the largest recipients of Stanford’s largesse. And “DeLay’s committees paid for flights on Stanford’s jets at least 16 times since 2003, including on Oct. 20, the day the former House majority leader was booked in a Houston courthouse on money-laundering charges,” according to Bloomberg News.
There are a few problems with this black-and-white evil-GOP-lawmakers-stand-in-way of-good-regulation narrative. First, as Ralph Nader’s Public Citizen relates (Case Study #3 here), it was actually Democrats who controlled the Senate at the time, and Majority leader Tom Daschle was a prime recipient of Stanford’s cash:
Stanford became the single largest contributor between July 1, 2000 and June 30, 2001 to the 527 groups of Daschle and Frost. (Public Citizen’s efforts to discuss these contributions were rebuffed by a Stanford Financial Group spokesperson.)
Stanford also contributed the maximum allowed to Daschle’s 527, given Daschle’s self-imposed limit of $10,000 per donor per year. Stanford contributed $10,000 from his company and $10,000 from himself in both 2000 and 2001.
Why? What was Stanford trying to get from Daschle, the highest-ranking Democrat in the Senate, and Frost, the third-highest ranking Democrat in the House?
We should also note that the bills Stanford appears to have lobbied against were also opposed by that strongly conservative body, the ACLU (see quote from Greg Nojeim, legislative counsel, here).
Finally, as Public Citizen notes, the legislation Stanford lobbied against passed through Congress, with Daschle as a prime mover, after 9/11. It appears to have done nothing to prevent his alleged fraud.
Oh, and look who he’s been palling around with lately.
The only lesson from Stanford’s lobbying appears to be that lobbying is an equal-opportunity employment opportunity, and that the only way to get less government corruption is to have less government, not more.