Q: When is money received from a possible Ponzi scheme not recoverable by court-appointed receivers? A: When you're a politician.
National fundraising committees for the Democratic and Republican parties, President Barack Obama and other major politicians have declined to return campaign donations totaling $1.8 million from Houston financier R. Allen Stanford, now on trial for allegedly masterminding a $7 billion Ponzi scheme,
writes Reuters.
The list of individual politicians who received money from Stanford (and have thus far refused to return it) reads like a Beltway roll call.
At the top of the list is President Obama, who received $4,600 in 2008. Sen. John Cornyn, R-Texas, who in addition to a 2004 three-day “financial service industry fact-finding” trip to Antigua, accepted a $6,000 campaign donation.
Those sums could be higher once donations from other Stanford executives and his political action committee are factored in. None of the money has been returned despite efforts by receiver Ralph Janvey to claw it back.
Rep. Pete Sessions, R-Texas, who received the most from Stanford himself at $10,000, got an additional $31,000 from other Stanford executives and his PAC. A spokeswoman for Mr. Sessions said he gave an equal sum to charity.
Similarly, Obama's campaign donated $4,600 to charity on Feb. 18, 2009, just days after Stanford's alleged fraud came to light. Cornyn sent $4,000 to Big Brothers Big Sisters of America.
Return to Sender?
According to Reuters, it appears that the Obama campaign has no intention of returning the money to the receiver or Stanford investors.
Kevin Sadler, lead counsel for the Stanford receivership, condemned the failure by the Obama campaign to turn over the contributions to the receiver. “The money was never theirs to begin with,” so the president has no more right to the money than an ordinary person who was given it by “a guy who goes into a 7-Eleven and robs the store.”
The Democratic Senatorial Campaign Committee received $950,500; the National Republican Congressional Committee, $238,500; the Democratic Congressional Campaign Committee, $200,000; the Republican National Committee $128,500, and the National Republican Senatorial Committee $83,345. The money came from Stanford himself, a political action committee with which he was associated and from Stanford executives.
When it comes to clawing back campaign donations, it can be difficult, if not impossible, to prove that a campaign took money that was clearly illicit and therefore must return it to the victims of an alleged fraud, according to Meredith McGehee, the policy director for the nonprofit Campaign Legal Center.
Money has been returned by House Speaker John Boehner, R-Ohio, Senate Majority Leader Harry Reid, D-Nev., and Sen. John McCain, R-Ariz., among others.
Stanford has denied any wrongdoing or taking money from investors.
