Politicians Slow To Repay Tainted Donations When a big donor is felled by scandal, politicians often rush to get rid of the sullied contributions. But politicians are ignoring requests to repay nearly $2 million in contributions from financier Allen Stanford, who is charged in a Ponzi scheme.


Politicians Slow To Repay Tainted Donations

Politicians Slow To Repay Tainted Donations

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Financier Allen Stanford steps off a prison transport bus at the federal courthouse for a hearing Sept. 15. Pat Sullivan/AP hide caption

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Pat Sullivan/AP

Financier Allen Stanford steps off a prison transport bus at the federal courthouse for a hearing Sept. 15.

Pat Sullivan/AP

Billionaire investor Allen Stanford was one of the biggest players in the financial meltdown.

His empire collapsed a year ago this week, and he's now awaiting trial on fraud charges.

Meanwhile, a court-appointed lawyer is trying to recover $1.8 million in campaign contributions that Stanford and his executives made with clients' money.

If the name Allen Stanford jogs your memory at all, it might be because he got the government of Antigua to dub him Sir Allen Stanford.

Or because he threw millions of dollars into his passion for the game of cricket.

Or because of an interview he did in June 2008 on CNBC, in which he responded to the question: Is it fun being a billionaire?

"Well, ah — yes, yes. I have to say it's fun being a billionaire. But it's hard work. But it's hard work," Stanford said.

Whether Stanford would call making campaign contributions hard work or fun, he made a lot of them.

Stanford and his two top executives dropped nearly $2 million in Washington, D.C. The money went to five party committees, three presidential campaigns and 82 members of Congress.

A judge has appointed what's called a "receiver" to recover whatever he can for investors — including that campaign money.

Kevin Sadler, a lawyer representing the receiver, says the Stanford operation used political money as a tool. It was "a business organization that from the outside appeared to be a legitimate business and was doing many things to give an appearance of legitimacy, one of which was to provide political contributions."

The fact is politicians don't like to let go of money they've raised. The receiver sent letters last March asking for refunds.

Out of the $1.8 million, a bit less than $89,000 came back.

Returned Political Contributions
Amount Source
$14,000 Shelby for U.S. Senate
$1,000 Barney Frank for Congress Committee
$4,000 Arcuri for Congress
$2,000 Neugebauer Congressional Committee
$1,000 Marsha Blackburn for Congress
$8,000 Friends for Harry Reid
$1,500 David Scott for Congress
$1,000 Freedom Fund -- Sen. Mike Crapo (R-ID), honorary chairman
$11,500 Chris Dodd for President
$16,000 Friends of Chris Dodd
$2,500 Friends of Mark Warner
$2,300 Minnick for Congress
$2,000 Lloyd Doggett for Congress
$3,000 Alexander for Senate 2014, Inc.
$2,500 Collins for Senator
$5,000 Friends of Jay Rockefeller
$2,500 Campaign Account of Robert Wexler
$3,000 Mel Watt for Congress
$5,000 Friends of John Boehner

Now a second round of letters has gone out. It tells the politicians that the money was "diverted from the thousands of innocent investors that have been defrauded by the Stanford Ponzi scheme."

There's no threat to file suit, but Sadler says that's not off the table.

"The money needs to be returned, and where it's cost-justified to do so, then certainly going to court is very much an option," he says.

That leaves one question: Who's holding all of this Stanford money?

Top 10 Unreturned Political Contributions (Ranked By Size of Contribution)
Amount Source
$950,000 Democratic Senatorial Campaign Committee
$238,500 National Republican Congressional Committee
$202,000 Democratic Congressional Campaign Committee
$128,500 Republican National Committee
$83,345 National Republican Senatorial Committee
$25,000 Rangel Victory Fund
$10,000 New Jersey Democratic State Committee
$10,000 Rep. Pete Sessions (R-TX)
$6,600 Rep. Gregory Meeks (D-NY)
$6,100 Sen. Bill Nelson (D-FL)

Complete List

In first place is the Democratic Senatorial Campaign Committee with $950,000 — almost half the total. Nobody at the committee responded to NPR's request for comment.

The National Republican Congressional Committee ranks No. 2 with $238,500. Its spokesman said they had no comment.

Rep. Charlie Rangel (D-NY), chairman of the Ways and Means Committee, has the most Stanford money of any lawmaker: $35,800. His office didn't respond to NPR's request for comment.

Rep. Pete Sessions (R-TX), with $10,000, is in second place for individual lawmakers who didn't return their cash.

There is precedent for politicians giving back tainted contributions. Deciding to do so can be as much political as legal.

"I think what ultimately will happen will depend on whether the story has legs or not," says Larry Noble, a campaign finance lawyer and former general counsel to the Federal Election Commission.

Noble says politicians look at the pain threshold where the money is no longer worth the fight.

"The larger the amount of money, the higher the pain threshold," he says.

But it seems when it comes to holding onto Allen Stanford's money, the pain hasn't come anywhere near the threshold. At least, not yet.