In February 2006, Republican Congressman Pete Sessions of Texas was focused like a laser beam on a single ambition: He wanted to someday become head of the National Republican Congressional Committee (NRCC), the national fund-raising committee to elect Republican members of the House of Representatives.
It was around this time that an aide to Congressman Sessions reached out to a Washington, DC, lobbyist who represented the interests of Houston financier R. Allen Stanford in an attempt to secure a $28,500 contribution to the NRCC. Such a contribution by Stanford could be the difference between Sessions's landing the job or his losing out to another candidate, the aide told the lobbyist.
The lobbyist cited a specific favor—one of many, he inferred—that Sessions had done for Stanford as a reason that Stanford should now pony up. As he had done so many times in similar political scenarios, Stanford contributed the amount of money sought from him. And it appeared to help. In 2008, and again in 2010, Sessions was elected by the House Republican Conference as chairman of the NRCC. Sessions later thanked Stanford by telling him that the campaign would never have succeeded without his support.
Yesterday Sessions announced his desire to ascend to even loftier heights within the House leadership: He made clear his aspirations to become the next majority leader of the House of Representatives. Sessions’s announcement came on the heels of Virginia Congressman Eric Cantor’s resignation as House majority leader yesterday, following Cantor’s shocking and historic defeat in a primary election to a Tea Party insurgent.
Sessions wasted no time in declaring his candidacy. “I admire Eric [Cantor] and think he has done a phenomenal job, but with that said, unfortunately he lost,” Sessions said yesterday. “We have to refocus on winning.”
In making his case for the job, Sessions has cited his tenure as head of the NRCC in 2010, a year in which his fund-raising helped the GOP take control of the House by picking up 63 seats. Although Sessions is not considered the front-runner in the majority leader race, he is one of two major contenders, along with Majority Whip Kevin McCarthy.
Stanford was convicted in 2012 of running a $7 billion international Ponzi scheme, the second-largest such scam in modern financial history. He is currently serving a 110-year prison sentence. Stanford had been one of the largest campaign contributors to Session’s various congressional campaigns. Sessions has said he knew nothing of any wrongdoing by Stanford until his brokerage offices were raided by the FBI and postal inspectors in 2009.
But documents from Stanford’s internal files, recently obtained by VICE, indicate that before the scandal became public knowledge, Sessions had intervened with the Treasury Department on Stanford’s behalf, and also wrote to banking regulators in Venezuela vouching for Stanford’s character when Stanford was trying to obtain a charter to open a bank in the country, at a time when regulators there were reluctant because of reports they had received that Stanford was running a Ponzi scheme and engaged in money laundering.
On February 1, 2006, James K. Conzelman, a lobbyist for Stanford, emailed Yolanda Saurez, Stanford’s chief of staff, relaying the request on behalf of Sessions: “Guy Harrison [Sessions’s then chief of staff] is a man on a mission. Pete needs to raise funds for the NRCC President’s Dinner. Basically, he wants to become part of the leadership. They are co-hosting a dinner with three other members of Congress and would like Sir Allen to contribute $28,500 to the event which would be attributed to the President’s dinner.”
(“Sir Allen” refers to the fact that Stanford had been knighted by the then government of Antigua, where his offshore bank was located. Federal authorities would later determine that banking regulators and government officials turned a blind eye to Stanford’s Ponzi scheme in return for bribes, campaign contributions, and financing for public-works programs on the island. Stanford’s knightship has since been revoked.)
Conzelman’s email continues: “In doing this Sessions gets the credit with the House leadership for doing his share. Do you think the Chairman would like to make a contribution by himself or would he like to have senior managers assist as well? Please advise.”
Later that evening—apparently after not receiving a response from Saurez—an annoyed Conzelman sent a follow-up: “Pete Sessions is a member who really us out [sic]. I would recommend we do what we can. OFAC [the Treasury division named the Office of Foreign Assets Control] licenses for one….
“Lastly, once we get the PAC [political action committee] up and running, we would make a contribution to Pete’s personal campaign. WE NEED TO SPREAD THE LOVE…”
Conzelman and Sessions soon got their way. Stanford contributed $28,500 to the NRCC, and in 2008 Sessions became the committee’s chairman.
This was hardly the first or only time that Sessions would be indebted to Stanford. In 2004, Texas’s congressional districts had been redrawn by the state legislature. As a result of the newly drawn congressional districts, Sessions found himself facing Democrat Martin Frost, a 13-term congressman who had recently lost his seat due to redistricting. The race was thought to be razor-thin (although Sessions won handily in the end), and it turned out to be one of the most expensive and nasty congressional races in history on both sides. Stanford raised almost $39,000 in campaign contributions from his own employees in the closing days of the campaign after Sessions personally sought the banker’s help.
Dozens of pages of confidential files obtained by VICE regarding the activities of Stanford and his lobbyists provide specific details as to how Sessions used his congressional oversight powers to benefit Stanford.
For example, Conzelman’s reference to “OFAC licenses” in the aforementioned email referred to Sessions intervening via a little-known unit of the Treasury Department named the Office of Foreign Assets Control. OFAC, according to the Treasury Department’s website, “administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.”
Stanford was well known to be a cricket enthusiast of the highest order. Next to running his fraudulent business empire, cricket was his greatest passion. He created, financed, and owned the Stanford 20/20, a cricket tournament held in the West Indies. And what Sessions apparently helped Stanford finagle was bringing Cuba’s cricket team to Antigua to compete in a cricket tournament that he had organized. The US had trade sanctions against Cuba at the time—sanctions that Sessions, as a conservative Republican member of Congress, had largely backed in the past.
Stanford had wanted to finance Cuba’s involvement in the games, but the Treasury Department and OFAC were initially opposed. In 2007 and 2008, Sessions offered Stanford assistance once again with OFAC, regarding Cuba's participation in Stanford’s tournament.
On December 27, 2007, Sessions personally emailed Stanford: “Allen I have not heard from anyone about helping out with the cuba issues… don’t forget I’m here if you wish.” Sessions gave Stanford his cell phone number in the email just in case Stanford or any of his chief aides needed him immediately.
On January 2, 2008, Stanford's chief of staff, Saurez, wrote to a subordinate and an outside lawyer working on the case: “Right now Antigua and Barbuda is anxious to move forward with their sponsorship of the Cuba team. We need to decide what additional support is appropriate that should be directed towards OFAC, including congressional support. Congressman Pete Sessions from Texas has indicated his willingness to assist, but my feeling is that we need to have a filing to send him before I contact his office.”
When I reached out for comment on the matter, neither OFAC nor Sessions’s congressional office would say exactly what Sessions had done on Stanford’s behalf.
On January 15, 2008, Sessions sent a message to Stanford from his BlackBerry with the subject line “Ssshhhh,” the body of which continued: “But I’m gonna pull of [sic] the cricket entry as you requested.. I have done the leg work… or half of it… ssshhhhhhhhh.”
And Sessions had been of even greater service to Stanford four years earlier, when he recruited two other Republican members of Congress, Representative Bob Ney of Ohio and Representative John Sweeney of New York for help, according to records and interviews.
On September 30, 2004, Sessions, Ney, and Sweeney wrote Dr. Trino Alcido Diaz, Venezuela’s chief banking regulator:
Please accept this correspondence as a letter of reference for Mr. R. Allen Stanford, Chairman and CEO of the Stanford Financial Group. We are writing in support of the request by an International Banking License for Stanford Holding Venezuela, C.A.—an affiliate of the Stanford Financial Group of Companies.
The three members of Congress were effusive in their praise of Stanford:
Mr. Stanford, a well-respected businessman from Houston, Texas, is a widely renowned as a man who integrates his interests with local economies to build friendships and create wealth everywhere he does business. He is also known as a man of great charity who is particularly interested in philanthropic and business endeavors in South America and the Caribbean region.
As the acquiring shareholder of 99% of the issued and outstanding shares of commercial bank in Venezuala, we would like to convey that we personally know Mr. Stanford to be a man of great strength, character and financial stability. Over the last few years we have had the opportunity to establish and maintain a very positive relationship with R. Allen Stanford and Stanford Financial Group, and have come to know that he conducts all of his business in a professional manner.
It is our opinion that granting an International Banking License to the Stanford Financial Group of Companies would be a positive addition to Venezuela. We would strongly recommend that R. Allen Stanford and his companies be given every possible courtesy and consideration in the approving of the International Banking License...
Both Ney and Sweeney would later leave Congress after being implicated in other allegedly improper conduct. In 2006, Ney pleaded guilty to federal charges of conspiracy and making false statements to investigators related to the political-influence-buying investigation of disgraced lobbyist Jack Abramoff. Ney admitted to performing official acts for clients of Abramoff’s in exchange for extravagant overseas vacations, expensive sports tickets and meals, and campaign contributions. Ney was released from prison in August 2008, after serving 17 months of a 30-month sentence. Sweeney lost his 2006 re-election bid to Democrat Kirsten Gillibrand following disclosures that Sweeney’s campaigns had paid his wife commissions for campaign funds she'd raised—which was followed by allegations of spousal abuse.
In 2005, Stanford arranged an all-expenses-paid trip to Antigua and Montego Bay, Jamaica, for Sessions, Ney, and Democratic Representative Gregory Meeks of New York and other members of Congress.
A highlight of the excursion was a late-night cocktail party for the members of Congress aboard Stanford’s 112-foot yacht, the Sea Eagle. The members of Congress were only able to reach the yacht, moored in a deep cove, after being taken out to it on a small launch.
Stanford had also paid for an earlier trip in 2003 for Sessions, Ney, Sweeney, Meeks, and three other members of Congress to travel to Antigua.
And in 2004, Stanford flew in Sessions, Sweeney, Meeks, and two other members of Congress to the tropical island nation. The (now defunct) Antigua Sun newspaper reported at the time: “Mr. Stanford personally provided four private jets to facilitate the visit, and entertained the delegation yesterday evening at a dinner banquet at the Pavilion [hotel].” It is worth noting that Stanford owned both the Antigua Sun and the Pavilion.
In addition to the trips, Stanford, the Stanford International Group, and Stanford’s employees gave Sessions some $41,375 in political contributions, according to public records.
For more than a year, Sessions refused to answer any questions I posed to him about his relationship with Stanford.
Reached this morning by telephone, the congressman pledged to “answer forthrightly any questions posed” to him by me or anyone else on the subject.
When he asked how I got his cell phone number and was told that he had emailed it to Allen Stanford, he said, “Oh, Jesus.”
When he inquired about the records I had and they were described to him, he simply said, “This can't be good.”
He pledged to sit down with me in his office for an interview at some point in the future. For the time being, all he had to say was: “I have no problem with anything I ever said or done with Allen Stanford.”
Stanford also made more than $238,500 in campaign contributions to the NRCC, much of which was personally solicited from Stanford by Sessions. In comparison, Stanford gave a considerably lesser amount to Senate Republicans—consisting of a total of $83,345 to the National Republican Senatorial Committee.
Stanford gave to Democrats as well. The Democratic Senatorial Campaign Committee received $950,000, and the Democratic Congressional Campaign Committee got $200,000.
Shortly after Stanford was charged, a court-appointed receiver charged with returning money to Stanford investors asked the four political fund-raising committees to return the money to defrauded investors. Sessions’s congressional district was among those hit hardest in the wake of uncovering Stanford’s massive ongoing fraud.
All four committees refused to return the money voluntarily. Ultimately, the Stanford bankruptcy receiver sued all four and, in June 2011, obtained a federal court order requiring them to give back the funds. The committees appealed the ruling and returned the money only after an appellate court affirmed the lower court’s decision.
Two well-placed congressional aides involved in the decision to fight to keep the money said that Sessions and others had told NRCC staff that they did not want to return the cash donated by Stanford because it could mean the difference between victory and defeat for some Republican House members if they could hold on to the funds long enough to be used in the 2012 midterm elections. Sessions was also said to be concerned that if the NRCC returned funds, the Democrats might not.
Sessions and those mentioned above were hardly the only way Stanford courted political influence: Prior to the collapse of his financial empire, Stanford paid more than $4.8 million to lobbyists, and Stanford and employees of Stanford Financial Group also donated more than $2.4 million to political candidates of both political parties.
But Sessions was arguably the US politician Stanford was closest to. On February 17, 2006, shortly after Stanford gave the $28,500 that Sessions had sought from him, Sessions emailed Stanford with the subject: “Bill Sessions Won the State Wrestling 140 pound Championship today in Houston!!!!” The Congressman went on to say, “It was a cool day in Houston!!!!”
Stanford replied: “Way to go Bill ‘The Bulldog’ Sessions!!! Andrea and I are so proud of you!! RAS.”
On February 9, 2009, investigators for the FBI and SEC, armed with search warrants, raided the US offices of Stanford’s brokerages, the largest of which was in Houston, Texas. That day, tens of thousands of people across the US and throughout the world learned that their accounts with the brokerages were frozen, and that they might never see their money again.
Within hours after FBI agents executed their search warrants that day, Sessions emailed Stanford: “I love you and still believe in you. Let me know if you need my ear.”
Topics: The Derailment of the SEC, R. Allen Stanford, Pete Sessions, US politics, House of Representatives, Ponzi schemes, Murray Waas, National Republican Congressional Campaign Committee, political contributions, Cricket, antigua, Texas, Eric Cantor, House Majority Leader, House Majority Leader election, investigative journalism, Stanford International Group, political lobbying, conservatives, Republicans, gop, GOP politics