UPDATE 1-U.S. diplomats were leery of Allen Stanford -cable

* Leaked cable cites rumors of “bribery, money laundering”

* US diplomats “did not reach out” to Stanford, cable says

* This wariness existed years before Stanford was charged
(Adds comment from one of Stanford’s lawyers)

By Pascal Fletcher

MIAMI, Dec 22 (BestGrowthStock) – U.S. diplomats in the Caribbean
were already wary of Texas financier Allen Stanford, who faces
trial for allegedly leading a $7 billion Ponzi scheme, years
before he was detained in 2009 on massive fraud charges, a
diplomatic cable released by WikiLeaks shows.

The May 2006 confidential report from the U.S. Embassy in
Bridgetown, Barbados describes Stanford as a “controversial
Texan billionaire” and major investor in the Caribbean. It
adds: “His companies are rumored to engage in bribery, money
laundering, and political manipulation.”

“Embassy officers do not reach out to Stanford because of
the allegations of bribery and money laundering,” said the
cable, which recounted an Apr. 21, 2006 breakfast in Barbados
in which U.S. Ambassador Mary E. Kramer met Stanford for the
first time in what was described as a “chance encounter.”

The cable made public this week, one of a stream of
confidential and secret U.S. diplomatic cables being released
by WikiLeaks in a major international embarrassment to the
United States, showed that U.S. authorities were well aware of
reports of financial irregularities surrounding Stanford, long
before the fraud scandal broke in 2009.

Stanford, a flamboyant, jet-setting billionaire and sports
entrepreneur in the United States and Caribbean, is due to
stand trial in a Texas court in January 2011. He denies any
wrongdoing.

One of Stanford’s lawyers played down the comments made in
the U.S. embassy cable. “Frankly, I don’t see how this affects
us one way or the other,” Robert Scardino told Reuters.

“This is information that apparently has no basis in fact
and it’s just kind of a shame it’s out in the public domain
now. It might affect people’s view of the case,” he said.

Stanford is charged with bilking thousands of investors in
a scheme involving certificates of deposit issued by his bank
on the small twin-island state of Antigua and Barbuda, where he
was by far the biggest foreign investor. He was known there as
“Sir Allen” after being granted a knighthood by a previous
government which was revoked after the fraud scandal emerged.

The Bridgetown cable said that at the 2006 breakfast, which
was organized by the “Legends of Cricket” group and was also
attended by then-Barbados Prime Minister Owen Arthur, Stanford
“bent the (U.S.) Ambassador’s ear concerning his significant
new tourism and property investments in Antigua and plans for
his Caribbean Star and Caribbean Sun airlines.”

“The Ambassador managed to stay out of any one-on-one
photos with Stanford during the breakfast,” the confidential
diplomatic report added.

U.S. prosecutors say that Stanford, who was a high-profile
sponsor of West Indian cricket competitions, paid “thousands of
dollars in bribes” to Antigua’s then-top financial regulator to
turn a blind eye to his banking and financial dealings.

The cable quoted Stanford telling U.S. diplomats at the
Barbados breakfast, “he preferred to conduct his business
without contacting the Embassy, resolving any investment
disputes directly with local governments.”

“It is whispered in the region that Stanford facilitates
resolution with significant cash contributions,” it added.

Antigua and Barbuda, a small Caribbean state of around
85,000 people, has said the Stanford scandal hurt its economy
and image as an offshore finance destination, causing economic
losses and layoffs.
(Reporting by Pascal Fletcher. Additional reporting by Kristen
Hays in Houston. Editing by Robert MacMillan)

UPDATE 1-U.S. diplomats were leery of Allen Stanford -cable