What’s the difference between the Pete Sessions / Allen Stanford scandal and Pretty Woman?
A: Julia Roberts won’t kiss you– for any amount of money
The bubbling scandal over the “mini Madoff”, R. Allen Stanford, and the Ponzi scheme he (allegedly) engineered in his bank, Stanford Financial, continues to percolate and slime everyone he had dealings with.
Let’s briefly reset the stage, shall we? Sir R. Allen Stanford was a relatively big financier, meaning he would take your money, invest it, then give you a healthy return. Of course, what he is accused of doing by the Securities and Exchange Commission (SEC) is “massive ongoing fraud” of investment funds worth over $8 billion. Allegations are that Stanford would take your money, use it to pay other clients who had previously invested with him, and then take money from others and give it to you—this is what is known as a “Ponzi scheme” and is the same thing Bernie Madoff was convicted of. But with Stanford it’s much less clear, as many of his bank accounts are hidden in notorious banking black holes in various Caribbean islands, so Stanford is not yet convicted of anything: we should continue to give him the presumption of innocence that our legal system affords him. Ditto on the allegations that he laundered money for the Mexican Gulf Cartel or cheated on his personal and property taxes to the tune of hundreds of thousands of dollars.
However, the following are facts which are NOT in dispute. Stanford threw money around Congress and various elections like it was water, with over $2.4 million given to various candidates from Stanford, Stanford Financial’s PAC, and its employees bundling their donations. These donations were often given to individuals who sat on committees who would mark up a bill which would regulate financial securities and clamp down on fraud– the same fraud he is now alleged to have been perpetrating. Convenient, no? From the Center for Responsive Politics:
Between its PAC and its employees, Stanford Financial Group has given $2.4 million to federal candidates (including both candidate committees and leadership PACs), parties and committees since 2000, with 65 percent of that going to Democrats. Stanford and his wife, Susan, have given $931,100 out of their own pockets, with 78 percent going to Democrats. The top recipients of cash in the current Congress include Sen. Bill Nelson (D-Fla.), who received $45,900; Rep. Pete Sessions (R-Texas), who collected $41,375; and Sen. John McCain (R-Ariz.), who brought in $28,150. (For a full list of recipients in the 111th Congress, see below. For a full list of party committees and lawmakers, past and present, who have collected money from Stanford Financial Group, go here.)
The company gave the most during the 2002 election cycle, when Congress was debating the Financial Services Antifraud Network Act, a bill that would have created a computer network linking the databases of state and federal banking, securities and insurance regulators to curb financial fraud. Lobbying reports indicate that Stanford Financial Group lobbied on the bill, which the House passed but the Senate did not. Nelson was vice chair of the Democratic Senatorial Campaign Committee during the ’02 cycle, when the DSCC collected more than $800,000 from the company. (UPDATE 2/18/09: A spokesman for Nelson pointed out to Capital Eye that Nelson was not a member of the Senate Banking, Housing and Urban Affairs Committee, where the antifraud act appears to have stalled in 2001. Nelson’s spokesman said the senator supported the bill, which Stanford presumably opposed.)
Stanford Financial Group has spent a total of $4.8 million on lobbying efforts since 1999, primarily on issues related to money laundering, financial services and banking. Last year the firm’s lobbying spiked by more than 300 percent, totaling $2.2 million, by far the most it has ever reported spending. In addition to sending its own in-house lobbyists to Capitol Hill, the company also hired lobbying shop Ben Barnes Group last year to represent its interests.
Now here’s where the story gets steamy: you’ll notice the second biggest recipient was Pete Sessions (R-Dallas). This mirrors the fact that during Sessions’ barn-burner campaign in 2004, one of the most expensive House races EVER, Stanford also happened to be Sessions’ #2 donor for the election cycle. A friend in need is a friend indeed?
So, when federal indictments from the SEC are handed down on Feb 17, 2009 and most of Stanford’s assets seized or frozen, what’s a sitting Congressman to do? Well, according to reporting by the Miami Herald, Sessions fired off this quickie email:
“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.”
Now, let’s give Sessions the benefit of the doubt and be completely fair: since Stanford’s indictments, he has been on the forefront of calling for SEC action and investigation. And, according to Sessions spokeswoman Emily Davis:
While the referenced e-mail cannot be authenticated, Congressman Sessions believes that its contents resemble language he would use to communicate with a person in crisis to encourage right decisions and prevent further tragedy.
I just have one question, then: how many other indicted financiers has Congressman Sessions written similar emails to? How many of his constituents has he said similar things to? How many other of his donors? I’m betting none, which then gives the implication that the $1,000,000,000 dollar question is:
“How much money do you have to donate to a member of Congress in order to get an ‘I love you’ from him during your darkest hour?”
About $46,000.
The problem here is not with Sessions. He did nothing wrong except play within the confines of the system that we force him to. Congressional races ain’t cheap, and someone has to pay for them — especially when you’re running in as expensive a media market as Dallas. But money, if it doesn’t buy votes, certainly buys access – enough access to have the head of the National Republican Congressional Committee send you a quick note as the walls of your financial house of cards are falling around you.
So, what to do? How about freeing our elected officials from the confines of having to slave away raising money, a task which none of them enjoy and most will admit honestly that it corrupts the system, at least privately. We can replace it with a system of fair elections, where candidates can choose to take public money– no strings attached. Lawmakers can face the public, and vice versa, with the public completely trusting that their representatives are only representing the interests of their constituents, and not their donors.
We can restore confidence in the integrity of government and the efficacy of citizens, and most importantly, shove (alleged) sleazebags like Stanford to the curb.
They can go hawk their love on some other streetcorner.
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