Japan’s Finance Minister resigns after repeatedly appearing drunk at G7 conference in Rome.

An important dynamic to keep an eye on: state budgets across the country are cratering, and where Republican governors and legislatures are having to deal with the mess a rupture is developing between them and the do-nothing national GOP. That and the day’s other political news in the TPMDC Morning Roundup.

Former Rep. J.D. Hayworth (R-AZ) was on Hardball last night and put on a dizzying display as he tried to blame George Soros and Chuck Schumer for the economic collapse:

Fox News “consultant” Karl Rove was asked this morning about the report that Dick Cheney was furious with President Bush for not pardoning Scooter Libby for his role in the Plame case, before leaving office:

Note no mention of Rove’s own deeply intertwined involvement in the Plame case.

Late Update: Nor did Matt Lauer mention it when asking Rove a similar question this morning on the Today show:

Later Update: Nor does Politico in its roundup of these interviews.

At TPMmuckraker, we’ve been closely following the case of Sir Allen Stanford, the colorful Texas billionaire who secured himself a knighthood from the government of Antigua (where he is the largest employer) but who falsely claimed for a time that the British Crown had presented the honor. Stanford has also gone around claiming to be a descendant of the founder of Stanford University, even though the school denies there’s any family connection there and is suing Stanford’s company for trademark infringement.

As you can see, Sir Allen is a real Texas-size character. He actually looks a bit like Clark Gable, though I think his cinematic antecedent may be more along the lines of Jett Rink or Charles Foster Kane.

Stanford has padded his rise with substantial political contributions

to Democratic and Republican politicians alike. (Here, for example, is Bill Clinton singing Stanford’s praises at a Stanford-sponsored shindig in Denver during the Democratic National Convention last summer. You’ll see other luminaries there, too, like Nancy Pelosi, Tom Brokaw, and Madeline Albright.) We’re investigating reports of at least one national politician taking a junket down to Antigua on Stanford’s dime.

What’s gotten Stanford into trouble are the spectacular annual returns on certificates of deposits issued by his Antigua-based Stanford International Bank. More on that in a moment.

The story of how Stanford came to the attention of the regulators and the media is a story in itself. Bloomberg first reported on SEC subpoenas of Stanford last July, and had apparently been investigating Stanford ever since. But the Madoff-like consistency of the performance of these CDs, despite market upheavals, caught the attention of a guy named Alex Dalmady, a financial analyst with a friend invested in the questionable CDs. Dalmady first suggested a Ponzi scheme was afoot in an article published in an obscure financial newsletter in Venezuela last month. (Apparently a significant number of Stanford investors are in Latin America.) That eventually prompted more stories about Stanford in BusinessWeek last week, and Bloomberg came out with some (though I suspect still not all) of its investigative work.

But the scope of the fraud and details about what went down have been only hinted at until this morning, when the SEC filed a civil enforcement case against Stanford in Dallas, alleging a multibillion fraud “of shocking magnitude that has spread its tentacles throughout the world.” Meanwhile, U.S. Marshals were seen entering Stanford’s office in Houston, and late word is that a sign on the Houston office door announces Stanford’s company is now in receivership.

Some $8 billion that was apparently deposited at Stanford International Bank in Antigua is now unaccounted for, according to the SEC.

Offshore banks. Political contributions. Ponzi allegations. Billions missing. This is a live one, folks.

Bank lobbyists hit up the Treasury for help gutting the executive compensation limits.

I’m wondering if Roland Burris’s senate career could end up being pretty short. Now he’s admitting that not only was he asked to raise money for Blago, he went ahead and did the best he could to raise money for him while he was trying to get the senate appointment.

Only a few months back former Rep. Bob Schaffer (R-CO) was in the hunt to become the next senator from Colorado. Now he’s taken a gig as a Margarita mix pitchman.

See the rest of the report at KDVR.com.

(Via Josh Green.)

Back in 2004, Sir Allen Stanford’s company flew Sen. John Cornyn (R-TX) and an unidentified companion down to Antigua — home base for Stanford International Bank, which the SEC now says can’t account for $8 billion in holdings — for three days of “financial services industry fact-finding.”

Late Update: It only gets better. The House Caribbean Caucus (no, I didn’t know it existed either) takes an annual “fact-finding” trip down to the islands on Stanford’s planes. As recently as 2005, the caucus was chaired by now-disgraced Rep. Bob Ney (R-OH), who did jail time in the Abramoff scandal, and included such other Abramoff luminaries as Reps. Tom Feeney (R-FL) and John Sweeney (R-NY).

Later Update: It appears Cornyn’s companion on the junket was identified back in 2006 as his wife.