Former Treasury officials say that among the most vociferous critics
were officials from Texas banks that, because of their proximity to the Mexican
border, finance many cross-border projects, and are believed to be a favorite
repository for Mexican fortunes whose owners sometimes don't welcome scrutiny.
Among the most outspoken were representatives of the International Bank of
Commerce of Laredo, Laredo National Bank and Stanford Financial Group, a
Houston-based broker-dealer with offshore banks in Antigua.
Stuart Eizenstat, a deputy Treasury Secretary at that time, told me that "the Texas bankers were leading the charge against" the anti-money laundering effort.
What was their biggest gripe? The Clinton team's insistence on strong "know your customer" rules that would require offshore banks to verify "the identity of [their] own customer, what his background was, whether he was in a legitimate business, where his funds came from," Eizenstat explained.
The Stanford Financial Group hired its first Washington lobbyists in 1999, at the time the anti-money laundering drive was gathering steam. And the company quickly learned how to cultivate pull in the Capitol -- between July 2000 and July 2001, Stanford and his employees doled out $448,000 in "soft money" contributions to senior lawmakers in both parties, according to a report by watchdog group Public Citizen.
Among the lawmakers benefiting from Stanford's largesse was Senate Banking Committee Chairman Phil Gramm (R-TX), who let a House-passed money laundering bill die a quiet death in his panel in the last months of the Clinton administration.
According to Public Citizen's report, "Gramm later publicly boasted to a group of bankers that 'I killed the administration's anti-money-laundering legislation.'" But Stanford's attention was by no means limited to Republicans, who happened to control the Senate at the time. Stanford made a splash at the 2000 Democratic National Convention in Los Angeles, a tale that we'll pick up in Part Two of Mr. Stanford Goes to Washington ...