MIAMI: US diplomats in the Caribbean were already wary of Texas financier Allen Stanford, who faces trial for allegedly leading a $7 billion Ponzi scheme, years before he was detained in 2009 on massive fraud charges, a diplomatic cable released by WikiLeaks shows.
The May 2006 confidential report from the US Embassy in Bridgetown, Barbados describes Stanford as a “controversial Texan billionaire” and major investor in the Caribbean and adds: “His companies are rumored to engage in bribery, money laundering, and political manipulation.”
“Embassy officers do not reach out to Stanford because of the allegations of bribery and money laundering,” said the cable, which recounted an April 21, 2006 breakfast in Barbados in which US Ambassador Mary E. Kramer met Stanford for the first time in what was described as a “chance encounter”.
The cable made public this week, one of a stream of confidential and secret US diplomatic cables being released by WikiLeaks in a major international embarrassment to the United States, showed that US authorities were well aware of reports of financial irregularities surrounding Stanford, long before the major fraud scandal broke in 2009.
The Texas financier, who was a flamboyant jet-setting billionaire and sports entrepreneur in the United States and Caribbean, is due to stand trial in a Texas court in January 2011. He denies any wrongdoing.
He is charged with bilking thousands of investors in a scheme involving certificates of deposit issued by his bank on the small twin-island state of Antigua and Barbuda, where he was by far the biggest foreign investor. He was known there as “Sir Allen” after being granted a knighthood by a previous government which was revoked after the fraud scandal emerged.
The Bridgetown cable said that at the 2006 breakfast, which was organized by the “Legends of Cricket” group and was also attended by then Barbados Prime Minister Owen Arthur, Stanford “bent the (US) Ambassador's ear concerning his significant new tourism and property investments in Antigua and plans for his Caribbean Star and Caribbean Sun airlines.”
“The Ambassador managed to stay out of any one-on-one photos with Stanford during the breakfast,” the confidential diplomatic report added.
US prosecutors allege Stanford, who was a high-profile sponsor of West Indian cricket competitions, paid “thousands of dollars in bribes” to Antigua's then top financial regulator to turn a blind eye to his banking and financial dealings.
The cable quoted Stanford telling US diplomats at the Barbados breakfast “he preferred to conduct his business without contacting the Embassy, resolving any investment disputes directly with local governments”.
“It is whispered in the region that Stanford facilitates resolution with significant cash contributions,” it added.
Antigua and Barbuda, a small Caribbean state of around 85,000 people, has said the Stanford scandal badly hurt its economy and image as an offshore finance destination, causing significant economic losses and layoffs.