Stanford Receiver Sues Political Committees

February 23, 2010

The political stakes in the Stanford Financial scandal are getting higher.

The court-appointed receiver who is tracking down the billions of dollars missing in the alleged Ponzi scheme - Dallas attorney Ralph Janvey - has filed suit against the major parties' congressional campaign committee seeking the return of $1.6 million in contributions they received from company founder Allen Stanford and his top lieutenants.

The move comes less than two weeks after Janvey demanded the committees return the funds, but received no response.

The suit, filed in federal court in Dallas, names the Democratic Senatorial Campaign Committee, the National Republican Congressional Committee, the Democratic Congressional Campaign Committee, the Republican National Committee and the National Republican Senatorial Committee.

The suit says the committees "have no legitimate right" to keep the contributions, which Janvey says belong to Stanford's investors.

The suit says the Democratic Senatorial Campaign Committee received the largest amount of tainted contributions, $950,000. The National Republican Congressional Committee follows with $238,500; the Democratic Congressional Campaign Committee received $200,000, the Republican National Committee got $128,500 and the National Republican Senatorial Committee took in $83,345. None of the committees was immediately available for comment.

Janvey has thus far stopped short of suing individual members of Congress, from whom he is seeking another $200,000 in contributions. Several of the congressmen, including Texas Republican Pete Sessions and New York Democrat Charlie Rangel have said they donated their Stanford-linked contributions to charity.

In addition to Janvey's lawsuit, the Miami Herald reported in December that federal prosecutors are investigating whether Stanford's lavish campaign contributions were an improper attempt to buy influence.

Stanford Receiver Sues Democratic, Republican Groups

Democratic and Republican political groups were sued for the return of more than $1.6 million in money investors entrusted to Stanford Financial Group before the company's principals were charged with a $7 billion fraud.

Court-appointed receiver Ralph Janvey claims the Republican National Committee, the Democratic and Republican senatorial committees and each party's congressional campaign groups have refused to return the money, according to a complaint he filed Feb. 19 in federal court in Dallas.

U.S. prosecutors in June announced separate charges against company founder R. Allen Stanford and chief financial officer James Davis for their roles in what the government said was a $7 billion securities-fraud scheme.

"The committee defendants did not furnish any consideration whatsoever for the funds they received from Stanford, Davis and the Stanford Financial Group," according to Janvey's complaint. "Consequently, they have no legitimate right to retain the funds."

Stanford and others were also sued last year by the U.S. Securities and Exchange Commission, triggering Janvey's appointment to oversee Stanford's businesses and recoup money for investors. Stanford has denied wrongdoing.

Davis pleaded guilty in August to three felony counts. His lawyer, David Finn, said then that his client would cooperate with federal investigators.

The Democratic Senatorial Campaign Committee received $950,500, according to Janvey. The organization didn't immediately reply to an e-mailed request for comment on the lawsuit.

Sara Sendek, a spokeswoman for the Republican National Committee, didn't immediately return a call seeking comment.

The political contributions case is Janvey v. Democratic Senatorial Campaign Committee, 10cv346, in the Northern District of Texas (Dallas).


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