Allen Stanford Ponzi Scheme

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January 20, 2006: Lawmakers Fly to Tropics as Montego Bay Tops Abramoff (Update1)

By Michael Forsythe and Alison Fitzgerald
http://www.bloomberg.com/apps/news?pid=10000103&sid=adgR4suaamIM&refer=us#

Jan. 20 (Bloomberg) -- A week before party leaders proposed to ban privately funded congressional travel, Representative Gregory Meeks and three other Democrats boarded a jet in Washington for Jamaica's Montego Bay. The jet's owner: Stanford Financial Group, operator of an Antigua-based offshore bank.

Nine other lawmakers -- three Democrats and six Republicans, including Senator Trent Lott of Mississippi --spent last week on Hawaii's Kona Coast, guests of an airport executives' group.

That the trips took place even as party leaders were moving to prohibit them shows the crucial role that travel plays in providing companies and interest groups with access to lawmakers. In the last five years, more than 60 percent of the current members of Congress have accepted privately funded January trips.

The bipartisan appeal of the junkets -- Democrats took 49.6 percent of them -- may make it hard to curb this perquisite of power. ``There is a real opportunity to end this, but there will be a lot of resistance,' said Fred Wertheimer, who heads Democracy 21, a Washington group seeking limits on corporate- funded congressional travel. ``Members of Congress like these perks.'

On Jan. 17, House Speaker Dennis Hastert, an Illinois Republican, proposed a ban on private travel, a reaction to the Scotland golf vacations and Super Bowl trips set up by lobbyist Jack Abramoff. Abramoff has pleaded guilty to trying to corrupt lawmakers and their aides, including through the use of junkets.

Pelosi Agrees

The day after Hastert's proposal, House Minority Leader Nancy Pelosi, a California Democrat, also offered a private- travel ban.

Privately financed trips often allow members of Congress to live beyond their $165,000 annual salaries, with trips on luxury jets and stays at top hotels. These include the Ritz-Carlton in Montego Bay, where Democratic Representatives George Butterfield of North Carolina, Stephanie Tubbs Jones of Ohio, Albert Wynn of Maryland and Meeks of New York stayed Jan. 11-15.

Wynn said that while ``clearly travel has been abused' by some lawmakers, if all privately financed trips are eliminated, members of Congress will either have to fly at taxpayers' expense or important regions such as the Caribbean won't get the attention they deserve.

``It's impossible to understand what's going on without traveling,' Wynn said. Said Butterfield: ``It allows me to gain first-hand knowledge about the problems of the world. And because Jamaica is so close by, their problems could easily become our problems.'

Security on Agenda

The lawmakers met with Jamaica's prime minister and discussed issues such as port security and drug interdiction. Tubbs Jones's spokeswoman didn't respond to messages left at her office and on her cell phone.

Meeks represents at least 50,000 people of Jamaican descent in his congressional district, which includes portions of Queens, New York, and found this year's trip ``very important to the constituent base,' spokeswoman Candace Sandy said.

Lott, the former Senate majority leader, was aware of the ``frenzy' over travel, yet took the Hawaii trip anyway because of his interest in the airline industry as chairman of an aviation subcommittee, spokeswoman Susan Irby said. Lott joined in a panel at the event, which was sponsored by the Alexandria, Virginia-based American Association of Airport Executives.

Republican Senator Craig Thomas of Wyoming used his own campaign funds to pay for the Hawaii trip, spokesman Cameron Hardy said. ``This is the first year he was able to attend, and due to the number of Wyoming constituents attending, he felt it was important to go,' Hardy said.

337 Members

The Hawaii trip included a golf tournament as well as the panel on aviation issues and a session where congressional staff discussed Washington politics, according to the airline association's Web site. An association spokeswoman didn't respond to two phone calls and an e-mail.

During the last five years, at least 337 of the 533 current members of Congress took privately financed trips in January, the most popular month to get away, according to PoliticalMoneyLine, a Washington-based company that tracks campaign finance.

For companies such as Houston-based Stanford Financial, the trips help cement relationships with lawmakers.

Stanford, which manages at least $17 billion, is a principal backer of the Inter-American Economic Council, a Washington-based group that sponsored the Jamaica trip. The council works with the Organization of American States, bringing together businessmen, government officials and politicians. R. Allen Stanford, 55, Stanford Financial's owner, is the 2006 recipient of the council's ``Excellence in Leadership' award.

Caribbean Caucus

All four Democrats who went on the trip belong to the House Caribbean Caucus, a bipartisan group of lawmakers who work to better understand U.S.-Caribbean relations. Previous trips by the council have included Republicans such as Bob Ney of Ohio, the caucus co-chairman, and Pete Sessions of Texas.

Ney and Meeks sit on the Financial Services Committee, which is responsible for overseeing companies such as Stanford Financial and drafting laws affecting offshore banks such as its Antiguan subsidiary, Stanford International Bank Ltd.

Sessions's biggest campaign donors for the 2004 elections were employees of Stanford Financial, Federal Election Commission records show. He was asked to join the Caribbean Caucus by Allen Stanford, said Guy Harrison, Sessions's chief of staff.

``Mr. Stanford is very focused on making sure the Caribbean is noticed within the U.S. foreign policy structure,' said Harrison. He said Stanford never asked Sessions for anything else.

`Never Lobbied'

Stanford Financial donated the use of its aircraft to the Inter-American Economic Council, which was permitted under House ethics rules, the company said.

``Stanford has had nothing to do with the establishment, administration or operations of the Inter-American Economic Council,' the company said in a statement. ``Stanford has never lobbied any of the members who traveled on our aircraft.'

Some members of the caucus have taken actions that may have helped Stanford Financial, such as opposing rules restricting aid to offshore tax havens. Ney praised Allen Stanford in the Congressional Record on Sept. 15, 2005. ``I join with the residents of the entire 18th Congressional district of Ohio in honoring and congratulating Allen R. Stanford for his outstanding achievements,' Ney said.

Ney spokesman Brian Walsh said the lawmaker's words were ``perfectly logical' because Ney, the Caribbean Caucus co- chairman, was praising Stanford for his award from the council. Ney received at least $12,000 from Stanford employees in 2004, ranking third among members of Congress in Stanford donations for that election behind Sessions and Senator Richard Shelby of Alabama, according to FEC records.

The Caribbean trips sponsored by the council leave lawmakers with leisure time. A trip last year didn't have any mandatory events scheduled after 11 a.m., other than lunches and dinners, and included a stay at Antigua's Carlisle Bay Hotel, where rooms in January can go for $990 a night, according to its Web site.

This year's event was busier, and included a tour of real- estate and road projects, the port of Kingston, and the site of a 2007 cricket tournament, as well as meetings with business leaders and Jamaican cabinet officials.

To contact the reporters on this story: Mike Forsythe in Washington [e-mail] Alison Fitzgerald in Washington at [e-mail].
Last Updated: January 20, 2006 16:23 EST

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