The Stanford affair and Antigua

A case study in neo-colonialism.

Proletarian writers

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Until recently, Robert Allen Stanford was best known in Britain for being what the boss press likes to call a ‘flamboyant billionaire’ (aka a swaggering, egotistical exploiter), responsible for the $20m ‘winner takes all’ Twenty20 one-day cricket match, in which his Caribbean Superstars decisively beat England’s finest, and for horrifying the staid gentry who run English cricket by landing at Lords cricket ground in a gold-plated helicopter, bearing a box that he claimed held millions of dollars in cash.

In various South American countries, including Mexico, Peru, Ecuador and Venezuela, he was better known as one of the major banking investors from North America, providing services to the local elites, now reputed to include money laundering, and with clients possibly including one of Mexico’s most violent drug cartels.

But it was in the tiny twin-island Caribbean state of Antigua and Barbuda that he was best known – as the largest investor and largest private-sector employer, estimated at some five percent of the country’s workforce; a man whose personal wealth far outstripped the GDP of this tiny country of less than 90,000 people.

Today, Allen Stanford is known worldwide as the man who the United States Securities and Exchange Commission (SEC) claims is responsible for a massive $9bn Ponzi scheme. In contrast, the 2007 GDP for Antigua and Barbuda was just $1.2bn. (Ponzi schemes are named for a 1920s financier, Charles Ponzi, and are fraudulent transactions whereby early investors are paid high returns from money contributed by later participants – essentially, high stakes pyramid schemes.)

Antigua was the centre of Stanford’s business empire – he had become a citizen and the government had given him a knighthood – and today, not only numerous Antiguan working people, who are employed by him, or who bank with his Bank of Antigua, or both, but the entire country is facing penury as his fraudulent schemes unravel.

This provides a graphic example of the essential point made by Marx and Engels in the Communist Manifesto more than 150 years ago, that capitalist globalisation sweeps even the smallest and most remote territories into the ruthless maelstrom of the world economy. Moreover, the relationship between Stanford and the Antiguan government reads like a case study in neo-colonialism, belying the trappings of formal independence.

Antigua became an English colony in 1632 and won political independence only in 1981. The island consisted largely of sugar plantations farmed by slave labour. Although slavery was formally abolished in 1834, in many respects, conditions of life on the plantations changed little.

In the 1930s, Vere Cornwall Bird Snr, later to be independent Antigua’s first prime minister, organised the sugar workers to fight for their rights, at a time when labour revolts were sweeping the Caribbean. He later formed the Antigua Labour Party (ALP).

It is somewhat to Bird’s credit that the brutal realities of plantation life gave way to an economy largely based on tourism and financial services. However, ALP governments proved their reliability in not rocking the neo-colonial boat, participating, for example, in the 1983 US-led invasion of their neighbour Grenada, which at the time was aspiring to socialism.

And the ALP governments led first by Bird Snr and subsequently by his son Lester became bywords for corruption, even in a region replete with offshore tax havens and shady financial dealings. Forcing himself into this situation, the seedy Stanford fitted like a glove.

He was “the most influential money man in the country” , in the words of a study on Antigua’s governance prepared for Washington’s Center for Strategic and International Studies. In 1999, prime minister Lester Bird appointed Stanford to the board of the Antiguan state entity that regulated offshore banks and authorised him to rewrite the country’s banking laws.

By 2004, Antigua owed Stanford EC$230m (Eastern Caribbean dollars). The country’s projected tax revenue for that fiscal year was EC$254m (one EC$ is equal to approximately 25p). As well as large chunks of prime land, Stanford’s assets in Antigua include two major banks, a trust company, a real-estate development company, a newspaper, a cricket ground, two restaurants, and so on.

A recent report from the Reuters news agency gave an insight into how Stanford had dominated Antiguan life as surely as the slave-owners, plantocracy and colonial officials of old:

“Step out of Antigua’s VC Bird International Airport, and within minutes you will be face to face with Texas billionaire Allen Stanford’s presence on this sleepy Caribbean island.

“On one side of a perfectly manicured avenue lined with palm trees, in marked contrast with the island’s mostly scruffy and potholed roads, stands the imposing Stanford International Bank, now under investigation by US financial regulators.

“Directly opposite is Stanford’s playground – the Stanford Cricket Ground where just three months ago the Texan handed over $20 million in prize money for a single game of the Caribbean’s favourite sport …

“Stanford’s headquarters in the capital has little corporate signage and more resembles a mansion than a bank.

“Guests are taken into a waiting room with a plush leather sofa and a business magazine featuring Stanford on the front cover is arranged on a table …

“Just five minutes down the road toward the capital St John’s, there are few signs of wealth. A shack sells roast chicken and small shops advertise themselves with cheap hand painted signs.” (‘Texas billionaire looms large on Caribbean island’, 16 February 2009)

In 1994, the ALP lost power to the United Progressive Party (UPP), led by Baldwin Spencer, who became prime minister. At first, Spencer tried to continue the previous cosy relationship with Stanford, but this soured after the Texan made disparaging remarks about the prime minister’s constituency. In response, Spencer labelled Stanford “haughty, arrogant and obnoxious” and, referring at least in part to his extensive land ownership, as “a modern-day colonialist”.

On 27 February this year, following revelations of Stanford’s fraudulent activities, the parliament of Antigua and Barbuda voted in an emergency session to seize 254 acres of Stanford’s land. The government said this was done to preserve 800 jobs. Financial authorities on the island also took over the Bank of Antigua and Stanford International. (Venezuela and Ecuador have also nationalised Stanford’s banks.)

These measures show commendable spirit on the part of tiny Antigua and may help shield its people from some of the worst of the fallout from the Stanford affair. But the people of Antigua and other such Caribbean countries will remain at the mercy of events beyond their control until such time as they set up national-democratic governments, prepared to take the Cuban and Venezuelan road, as Grenada attempted from 1979-1983, and, above all, when the dream of such Caribbean patriots and communists as Claudia Jones, of a West Indian Federation, is placed back on the political agenda.