President Obama made an effort to divest himself of one unnecessary headache this week — announcing that all campaign contributions he had received from Stanford Financial or its chief officers would be donated to charity. Tennessee political figures who received largesse from the now discredited company, raided last week by the Securities and Exchange Commission and charged with "a fraud of shocking magnitude," reacted in different ways when confronted with disclosures that they, too, had received campaign money from Stanford sources.
Some, like U.S. senator Lamar Alexander, temporized. A spokesman for the senator released this statement on Monday: "We'll review the situation, but it appears as if the money was received from a PAC made up of employees." Others, like U.S. 8th District representative John Tanner, who received $2,500 from Stanford in 2008, followed Obama's lead. The congressman's office announced it would forward an equivalent amount to St. Jude Children's Research Hospital, already a recipient of substantial donations from Stanford.
St. Jude was also on the mind of 9th District U.S. representative Steve Cohen, who announced he had no intention of returning any portion of the $1,000 he received from Stanford sources last year. "St. Jude shouldn't return any of theirs, the Pink Palace shouldn't return any of theirs, and I don't see why I should return any of mine," Cohen said. "I just wish I'd got $5,000 from them."
The irrepressible congressman went on to say that "the main problem" was that "they gave too much to the wrong people," and he cited two $2,300 contributions from Stanford to his two-time Democratic primary opponent, Nikki Tinker, as well as an abundant amount to a variety of Republican causes and politicians.
Tinker's specific benefactor was Stanford CEO James M. Davis. Both he and Allen Stanford himself, the Texan who founded the group, were nothing if not eclectic in their giving, donating to liberals and conservatives, Democrats and Republicans alike: They gave to arch-rightists like Texas senator John Cornyn and to the Republican National Committee but also to the Democratic National Committee, U.S. House Democratic bellwether Charles Rangel, then candidate Obama, and his Republican opponent, John McCain, as well.
If the Stanford fallout is embarrassing and potentially risky to the politicians who've accepted the company's largesse, it has more ominous and immediate consequences for Republican state senator Paul Stanley of Germantown, the one local politician who was actually employed by Stanford as a "wealth adviser."
Stanley, who professes to have no knowledge of any wrongdoing by Stanford's ranking officers, with whom he had only passing acquaintance at most, continues to say that he is "dumbfounded" by the public revelations of the last few days and is all too aware that he is suddenly out of a job.
"Right now, I'm just trying to take care of my clients," says the legislator, who has access to the Stanford Nashville office, which, unlike its Memphis counterpart, is still open — but only for purposes of liquidating clients' portfolios and accounts at Stanford. Stanley hopes to relocate both his clients' assets and himself. He says that, for reasons of client confidentiality and pending legal processes, he can't comment on whether he dealt in specific securities — like a now suspect series of CDs held offshore at the Stanford International Bank in Antigua.
Of one thing, he's certain: "I did nothing wrong."
As chairman of the Senate Commerce, Labor, and Agriculture Committee, Stanley has begun holding hearings on various phases of the finance industry. He may end up holding one touching on securities, but he points out that the state's oversight is essentially limited to the administration of agents' licenses. Ironically, given that Stanley is of that conservative persuasion that historically has looked askance at excessive government regulation, he now concludes, "I wish the government had done a better job the last 20 years."