An SEC official called Houston financier Allen Stanford's $8 billion scheme a "fraud of shocking magnitude that has spread its tentacles throughout the world." Last August, Stanford spread his tentacles around House Speaker Nancy Pelosi.
The hug and kiss they exchanged at last year's Democratic National Convention could haunt Pelosi, a Bay Area millionaire who more or less bought her way into office and whose shady fundraising activities, including paying her husband with political action committee funds, have repeatedly drawn rebukes.
Stanford's brokerage firm, Stanford Financial, marketed CDs offering rates well above the market which, SEC investigators allege, he secretly plowed into risky real estate and private equity deals instead of the safe investments he promised. The FBI had also been investigating him for possible investment in money laundering for Mexican drug cartels.
It only makes sense that Stanford, with so much to hide, would seek safety in the arms of a powerful politician who has controlled the House of Representatives since the Democrats regained the majority in 2006. Before Pelosi was in power, Stanford cozied up to then-Speaker Tom DeLay, flying the Texas congressman on his private jet 16 times. Money and power always find each other attractive. We're just not sure who came away from this embrace more tainted.