As the federal government closed in on Allen Stanford in 2008, he began desperately pulling out all the stops in a bid to stay one step ahead. The Texas banker launched his own in-house lobbying shop, run by a former top aide to a powerful congressman. And he hired a former Clinton administration PR specialist to aggressively deflect reporters looking into his financial empire.
The Stanford story, of course, is primarily about how a high-living tycoon used a Caribbean tax shelter to allegedly orchestrate a multi-billion dollar Ponzi scheme. But it's also an object lesson in how Washington works: How wealthy and powerful people can buy a level of influence and access that allows them to play by a different set of rules. In Stanford's case, that only worked for so long. But it's not hard to see how he could have thought playing the Beltway influence game might be his salvation.
For at least a decade, Stanford had understood that in order to keep his operation running, he needed some juice in the capital. Starting in 2000, he spent millions on high-priced lobbyists, and used hefty campaign donations and lavish trips to the Caribbean to curry favor with lawmakers -- a subject now reportedly being investigated by the Justice Department.
But he seems to have felt that wasn't enough. In 2008, the FBI and SEC probes that would eventually lead to his downfall appeared to be heating up. That year, Stanford opened his own in-house Washington lobbying operation, headquartered on New York Avenue.
To run it, he hired two men with ideal backgrounds for pressing his agenda: James Conzelman, a former chief of staff to Michael Oxley, the Republican congressman who had chaired the House Ways and Means committee, which oversees our tax laws; and Lionel Johnson, a former top Treasury Department official during the Clinton administration, specializing in international development. Conzelman was even given the title of Senior Vice President of Stanford Financial. That year, Stanford spent $2.2 million on lobbying on "general tax" issues, records show -- far more than he had spent in previous years.
According to Jack Blum, a former congressional investigator and an expert on money laundering, it's not surprising that Stanford stepped up his lobbying operation when he did. "There were a lot of people closing in on him," Blum told TPMmuckraker. "So his natural response was: 'I'm gonna reach out and get all the people I can to cover me.'"
Referring to Stanford's work with Florida regulators in the late 1990s, Blum added: "He had spent a lot of time and money in the past to buy his way out of scrutiny."
The lobbying effort was all in vain though, of course. "He threw away a potful of money," said Blum. "He was a target, he stayed a target. No good came of it."
Blum also was a colleague of Conzelman at Baker Hostetler, the powerhouse law and lobbying firm that Conzelman joined after leaving Capitol Hill. He described Conzelman as "a nice guy, a smart guy," but said he was "really disappointed" when he learned that Conzelman had gone to work for Stanford. "I thought, Oh my God, this guy has no clue about what he's walked into."
Conzelman, now the president of the Ripon Society, an organization of moderate Republicans, told TPMmuckraker he did not immediately have time to talk. Johnson, who's now at the PR firm Fleishman Hillard, did not respond to a request for comment.
A stepped-up lobbying presence wasn't the end of it though. We told you that for much of the decade, Stanford used his "chief of staff," Yolanda Suarez, to play hardball with investigative journalists who were digging into his operation. But Suarez left his company in 2008, and that year Stanford hired Lula Rodriguez as Managing Director of Global Communications and Corporate Affairs. Rodriguez was a top State Department communications official during the Clinton administration, according to her online bio, and later was a managing director at Citigroup, focusing on Latin America and the Caribbean.
She appears to have been tenacious in fighting off journalists who were on Stanford's trail. "This was a very very professional and aggressive PR operation," one reporter who engaged with her that year told TPMmuckraker. Rodriguez, said the reporter, was "utterly relentless" in arguing that Stanford was a legitimate businessman, even sending the reporter a link to the CNBC interview in which Stanford admits that it's fun to be a billionaire.
"She was bragging about all her connections," the reporter added. [She was saying:] I wouldn't possibly be involved with someone who's a total crook."
Rodriguez also bragged about her access to Stanford, said the reporter. "She implied that she was his best pal. That she could pick up the phone, and he would be on the phone." But when the reporter followed up and tried to set up a meeting with Stanford, Rodriguez never got back to him.
Efforts to reach Rodriguez were not successful.
Of course, Stanford's high-powered lobbying and PR help couldn't keep the Feds off his trail forever. It says something about the way Washington operates, though, that Stanford even thought he could try.
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