The Komisar Scoop Reports & Analysis by Investigative Journalist Lucy Komisar

Friday, July 31, 2009

“Mary Stuart” – a riveting political thriller about the Scottish Queen’s challenge to Queen Elizabeth I

Filed under: Theater — Lucy Komisar @ 8:10 am

By Lucy Komisar

Janet McTeer and company, photo Neil Libbert

Janet McTeer and company, photo Neil Libbert

The fusion of women in 16th century clothes and men in suits in this stunning political thriller underlines the eternal reality of struggles for power. Director Phyllida Lloyd has used the device to enrich her staging of Friedrich Schiller’s play, which premièred in Weimar, Germany, in 1800. It has been adapted by Peter Oswald for a memorable production.

The fact that the political contest is between two women adds the fascinating element of feminist assertions of self against men.

Men, as a sex, in fact, were central to the downfall of Mary Stuart (Janet McTeer), who as Queen of Scotland colluded in the murder of her second husband. Her nurse Hanna Kennedy (Maria Tucci) recalls, “You made him King and he wanted to rule you. He had Rizzio, your favorite, stabbed to death.”

Hanna asserts that, “a kind of male recklessness overcame you.” Mary married the seducer who “poisoned her soul.”  Then she was forced to abdicate that marriage and flee to hoped-for safety in England. The story is nothing a modern soap could ever match. And Lloyd builds the tension to a breaking point.

Alas for Mary, her cousin Elizabeth (Harriet Walter) feared she was leading a

Harriet Walker as Queen Elizabeth, photo Neil Libbert

Harriet Walker as Queen Elizabeth, photo Neil Libbert

Catholic plan to incite supporters to civil war, setting up cells of assassins against the crown to install a Catholic legacy. She imprisoned Mary – for 19 years!

We are near the end of that era. Most of the action takes place inside the dreary brick-walled tomb-like dungeon of the Castle of Fotheringhay (set and costumes by Anthony Ward) where Mary is incarcerated with little company but her nurse. Her black gown with gold circles is of the era, but the production is as modern in speech and mood as the briefcases the lords and courtiers carry.

The play meanders between breathless plots being hatched by Stuart’s secret Catholic supporters in Elizabeth’s court. She won’t renounce her claim to the British throne and hopes for support from the French King. The young Sir Mortimer (Chandler Williams), a secret Catholic, turns out to be on her side and brings message from the Cardinal of Lorraine in France.

Janet McTeer as Mary Stuart, photo Neil Libbert

Janet McTeer as Mary Stuart, photo Neil Libbert

The poetry and elegance of the language is vivid. Mary is mocking and without pity: “I see England’s aristocracy, the majestic senate of the realm, scurrying around like eunuchs in a harem at the whim of the Sultan, Henry the Eighth, my uncle. I see the wealthy upper house, not so different from the bribe-hungry commons, making and cancelling laws and marriages, at the command of the big man.”

There is a contest of power and personality between the two women; Elizabeth may hold the chips, but Mary is by no means supine. Lord Burleigh (Nicholas Woodeson) of Elizabeth’s court worries at Mary’s steadfastness, “She knows all about the indecision of the Queen of England. She smells our panic and that rouses her courage!”

Repeatedly, the queens’ roles as women is underlined. Elizabeth pulls a ring from her finger: “This sign has a duality of meanings: duty and slavery. It is a ring that makes a marriage – and it is from rings that chains are made.”

Queen (Harriet Walter) and men of the court, photo Neil Libbert

Queen (Harriet Walter) and men of the court, photo Neil Libbert

Shrewsbury tells Elizabeth: “They say she had her husband murdered. It is a fact that she married his murderer. Appalling crime! But those were bad times for her, in the hurricane of civil war, warlords seizing her power, she, bewildered, in the chaos, sides with the worst of the, possessed by who knows what? Women are not strong.”

Elizabeth: Some of us are.

Shrewsbury: You are an exception!

At what point will the contest descend into thuggery? The Queen will not give an order to murder Mary. But will her acolytes “understand” what she wants and do it? Burleigh tells Amias Paulet (Michael Countryman), a knight who is guarding the captive: “You don’t have to do it yourself, just leave the door unlocked.” He refuses to play that game. “I will let no killer in here!” Burleigh asks Elizabeth for Mary’s head. “You must kill or be killed. If she lives you die, if she dies you live!”

So who is ethical, the highest nobles or the lower knight?

Harriet Walker and Janet McTeer, photo Alastair Muir

Harriet Walker and Janet McTeer, photo Alastair Muir

Mary Stuart and Queen Elizabeth never actually met. However, the essential device of a dramatic confrontation is inserted into the play. The second act opens with a breathtaking scene of Mary and her nurse getting drenched in the pouring rain. They have been allowed into the courtyard to facilitate a “chance” meeting with the Queen. Issues of physical comfort no longer apply. In fact, being out of the dungeon in the fresh air gives Mary joy. Elizabeth approaches in a hunting party. This is the only element that seems bizarre: why would the Queen continue the hunt in the pouring rain? Men rush in with black umbrellas, and then the rain stops.

Mary pleads to Elizabeth, who is angry, cold, icy. Will Mary be appropriately contrite to save her life? Or will her royal sense of self prevent her from any submission? McTeer is enthralling. Walter and the rest of the cast are also uniformly powerful. This is a production that should not be missed.

Mary Stuart was put to death in 1587; she was 44.

“Mary Stuart.” Written by Friedrich Schiller, Adapted by Peter Oswald. Directed by Phyllida Lloyd. Broadhurst Theatre, 235 West 44th Street, New York City. 212-239-6200. Opened April 19, 2009, Closes August 16, 2009.

Wednesday, July 15, 2009

Q&A: Tax Havens, Bank Secrecy, and Tricks

Filed under: Regulation & enforcement,Scoops,tax evasion — Tags: , — Lucy Komisar @ 10:26 am

Lucy Komisar interviews BOB ROACH, Chief Investigator of the Permanent Subcommittee on Investigations of the U.S. Senate

Robert Roach, photo by Lucy Komisar

Robert Roach, photo by Lucy Komisar

MIAMI, Inter Press Service (IPS), July 14, 2009  – At a recent conference in Miami organised by Offshore Alert, a specialised media organisation focused on financial crime, IPS correspondent Lucy Komisar sat down with veteran investigator Bob Roach to discuss the hurdles facing regulators trying to crack down on tax havens, which cost the U.S. alone an estimated 100 billion dollars annually.

Worldwide, financial centres with bank secrecy laws are blamed by the Organisation for Economic Cooperation and Development (OECD), which represents 30 developed economies, for hiding some 5 to 7 trillion dollars offshore so the profits they produce evade taxes.

The Miami conference dealt with these offshore financial centres, and the significance and global impact of the myriad of business transactions that is conducted in and through them.”

Excerpts of the interview follow. He is speaking not on behalf of the committee, but rather expressing his own views.

IPS: You said at the conference that information received by the Permanent Subcommittee of Investigations of the Senate about the activities of some institutions pointed to structures that were created for one reason: to avoid tax liability. What institutions were you talking about?

BOB ROACH: I was specifically referencing the hearings that took place in July last year and lasted until this year, which focused on activities of UBS in Switzerland and the LGT Group, an asset management company in Lichtenstein.

IPS: One of the issues raised by the G20 in April was the need to have country-country agreements to deal with tax-information sharing about clients of banks and companies set up in offshore jurisdictions. How effective are they?

BR: The fact that you have agreements in place doesn’t really mean or help a lot if jurisdictions won’t comply with them. And this is a problem in a country when we try to seek information. Often the government (that requests the information) has to prove the case before it gets the information it needs to prove the case.

So while countries can say they have exchange agreements, it’s about the details. Agreements are written in such nebulous language, there are such strict requirements (to comply with in order to get information), that it’s impossible. These really are not effective agreements that increase transparency.

IPS: Most people don’t know that the U.S. has its own tax havens: Delaware, Nevada and Wyoming. How serious is this problem and what are the U.S. agencies doing about them?

BR: It is a very serious problem. Certain investigations as early as 2000-01 (showed that) the incorporation procedures in those states are very weak. Most states will incorporate entities without really having any kind of understanding of who the true controlling persons or beneficial owners are. This is a weakness that has become exploited by many interests, particularly overseas, to facilitate the kind of activity that we worry about. And it is something that really has to be ended.

On a couple of occasions now, Senator (Carl) Levin has introduced legislation to stop this type of activity by requiring states to collect more information on the ownership, on who is behind entities that are being incorporated in these states.

Recently, Senator Levin, Senator (Charles) Grassley, and Senator (Claire) McCaskill introduced the incorporation transparency and law enforcement act that requires states to collect the kind of information that will allow the identification of true parties behind the entities that are established in these states.

IPS: How are these states different from offshore tax havens?

BR: One way to look at it is that in many offshore tax havens the jurisdictions will collect a lot of information on the entities and who is behind them and who the beneficiaries are. In the U.S. these jurisdictions don’t necessarily prevent the release of the information; they just don’t collect any information, so there is nothing to release.

IPS: When we are talking about these states, the problem of incorporation makes them havens of some sort. But we are not talking about banking secrecy, which the U.S. does not have. Is that correct?

BR: The U.S. prohibits the release of personal information on individuals. But it doesn’t have the kind of laws that criminalise the release of information of accounts simply to protect the secrecy of the accounts.

IPS: Do you that think the offshore banking secrecy has contributed to the worldwide financial crisis?

BR: I’m not sure if it’s the secrecy as much as it is the regulatory mechanisms that go along with these jurisdictions. And that has to do with the understanding and approval of types of financial products that allow engaging in various transactions. And what we see is that some of these structures and financial products are more and more complex, to the point of where some of the people who design and some of the institutions that implement them don’t fully understand their impact, risks, and liabilities downstream.

We begin to face really troubled situations because if we begin to have a collapse of these corporations, that quickly spreads through the system because so many parties can be affected by these relationships. And suddenly the system becomes relevant because no one understands who else might be tied in and who else may be affected.

Many experts need to say that a big factor in the financial crisis goes back to the lack of strong regulatory regimes and a strong oversight in reviewing and monitoring this kind of transactions before they are allowed into the market place.

IPS: At the conference, people referred frequently to the “Stop Tax Haven Abuse Act”, which Senator Levin introduced (and has been co-sponsored by President Barack Obama when he was a senator). Can you tell us what that would do if it was passed?

BR: Some of the provisions in the Act are tools aimed at the enforcement of our laws against those who want to exploit the existing tax laws by enacting a set of presumptions against people who would try to set up and hide their assets and tax obligations. It would strengthen various penalties against enablers. It would increase the amount of time that the IRS has to conduct offshore investigations.

It would try to stop abusive practices that take place under the current law with respect to residing structures to payments of taxes in certain transactions by utilising different financial instruments. So there are a number of provisions in there that would both enhance enforcement making it more difficult for parties to hide assets offshore and also increase penalties for those trying to help others abuse the system. It would give more power to the IRS to pursue its investigations.

IPS: Are the hearings set yet for this bill?

BR: That would be referred to the finance committee, and that has not been scheduled. It is not something the Permanent Subcommittee of Investigations or (chairman of the Permanent Subcommittee on Investigations) Senator Levin would have control over. However, as everyone has recognised, there has been a lot of talk from the administration and leadership in congress about the hope that there will be legislation to address a variety of these offshore issues.

*After this interview was conducted, the Swiss reached an agreement over a double taxation treaty with the United States in what was seen as a key step towards removal from the Paris-based OECD “grey list” of uncooperative tax havens.

And on Monday, Jul. 13, the legal action against Swiss banking giant UBS by U.S. authorities seeking access to records of some 52,000 of UBS’s U.S. clients was delayed, and the sides were given until Aug. 3 to find a settlement.

Article on IPS site

Friday, July 10, 2009

“The Norman Conquests” – wry sophisticated comedy in inimitable Ayckbourn style

Filed under: Theater — Lucy Komisar @ 10:32 pm

By Lucy Komisar

Alan Ayckbourn’s “The Norman Conquests” is an ultra-sophisticated comedy that verges perilously close to sitcom, then skirts around it. The round-robin of three plays is what the clever British author posits against the normal sequential serial, a “Rashomon” style retake of the same events from the viewpoint of different locations rather than different people. The Old Vic Theatre Company gives the tri-part event an engaging revival, returning it to Broadway after 35 years. It is not the slightest bit dated.

Company at dinner, photo Joan Marcus

Company dining, photo Joan Marcus

The characters move between the garden, the living room and the dining room, and we see in each play only what occurs in those venues. When someone moves from the living room to the dining room, he’s moving to another play. Seeing one play is enough to understand the script. Seeing all of them deepens your sense of the characters and understanding of their connections.

The action is often slapstick, but the characters are so skillfully and sympathetically drawn, that it rises far above what sitcom and slapstick denote on television or routinely dumb movies.

The goings-on take place at the upscale English country house of an invalid lady we never see, though we learn that she had a spirited life and now reads torrid novels. She lives with her unmarried daughter Annie (Jessica Hynes), who alas has a rather tepid though likeable boyfriend Tom (Ben Miles), a veterinarian, who seems to exercise more passion for the cat in the tree than for Annie.

Stephan Mangan, photo Richard Termine

Stephan Mangan, photo Richard Termine

So she has agreed to a secret weekend assignation with her brother-in-law Norman, the extremely appealing Stephen Mangan, a shaggy dog sort of fellow who sports slovenly clothes and a wool ski cap. To take care of mom, Annie has invited her brother Reg (Paul Ritter) and his wife Sarah (Amanda Root) to visit.

Of course, nothing goes according to plan, and in the unraveling of the great weekend, we learn that Annie isn’t the only disappointed soul. The marriage of Reg, a real estate agent, and Sarah, a complaining housewife, is stale and full of bickering. Ruth (Amelia Bullmore), Norman’s wife, shows up in a hot red dress to complete the twosomes. She has a serious business career, and her stormy relationship with her immature, wise-cracking assistant librarian spouse (their jobs shows clear status divisions) appears to be saved by hot sex. Or “uncontrollable animal lust,” as it’s described. Norman’s interest in other women certainly confirms the uncontrollable part.

Amelia Bullmore, photo Richard Termine

Amelia Bullmore, photo Richard Termine

Sex is a subject that is pursued or thought about by various players, though, in spite of some good-natured rolling around on the floor, this is not a risqué production. In fact, it’s mostly about how none of the six really get what he or she wants.

The play rises on the excellent ensemble acting. Bullmore is very good as the assertive, touchy, seething Ruth. So is Ben Miles as the always timid, nervous, embarrassed Tom. He presents the funniest inept marriage proposal I’ve ever seen. Stephen Mangan’s supple, moving face is theater in itself. Amanda Root channels the tight-lipped wound-up Sarah. Paul Ritter is good as the wry, fast-talking Reg, and Jessica Hynes is has you rooting for her as the slightly dowdy put-upon Annie.

Ayckbourn’s language, of the sort you don’t hear on any telly, raises all to a higher level. Take Ruth declaring, “People you think won’t last long cling on grimly till death.” But the wit is in the situations, not the language.

Designer Rob Howell theater-in-the-round sets totally surrounded by the audience bring you into a level of intimacy that stops only short of reaching out for a cup of tea or coffee at the dining table.

“The Norman Conquests.” (“Round & Round the Garden,” “Living Together” and “Table Manners.”) Written by Alan Ayckbourn, directed by Matthew Warchus. The Old Vic Theatre Company at Circle in the Square, 50th Street between Bway & 8th Avenue. 212-239-6200. Opened April 23, 2009; Closes July 25, 2009.

Review on NY Theatre-Wire site

“Blithe Spirit” is dated comedy about upper class man who conjures up his dead wife

Filed under: Theater — Lucy Komisar @ 1:19 pm

By Lucy Komisar

Angela Lansbury, photo Robert J. Saferstein

Angela Lansbury, photo Robert J. Saferstein

The idea behind Noel Coward’s play is quite promising. Charles Condomine (Rupert Everett), a middle-aged murder mystery novelist – obviously quite successful in writing or marriage, from the country villa he inhabits – invites a medium (Angela Lansbury) to hold a séance for him, his wife and another couple.

He pretends a genuine interest, but he’s just looking for jargon and tricks to use in a book. The couples discuss the upcoming event with some superciliousness as they wait in their upper class dinner clothes – long gowns for the women, black tie for the men, and cucumber sandwiches for all.

As this is a Coward piece staged by accomplished London director Michael Blakemore, you’d expect some sophisticated wit and gentle skewering of upper class British society. Alas, though the piece is certainly amusing, it’s more television fluff than barb.

Christine Ebersole, photo Robert J. Saferstein

Christine Ebersole, photo Robert J. Saferstein

Maybe it’s just too dated for what passes for sophistication now. Example, Charles’s first wife Elvira (Christine Ebersole) departed this world when she was convalescing after pneumonia. As Ruth Condomine explains, “One evening she began to laugh helplessly at a BBC musical program and died of a heart attack.” Maybe you have to be British.

The tables are turned on Charles’ ruse when after the séance Elvira appears in flowing gauzy white gown, visible only to him, and proceeds to interfere with his marriage and household.

The actors run through their paces in fine form, but the story they spin is too much like a 40s movie. A skillful comedian, Angela Lansbury mugs through the role of the medium, Madame Arcati , attired in a gaudy costume of purple velvet and shiny black beads. With a high pitched voice and exuberant, flighty demeanor, she brings some charm and presence to the role of making contact with the spirits of those who are no longer present.

Rupert Everett, photo Robert J. Saferstein

Rupert Everett, photo Robert J. Saferstein

Current wife Jayne Atkinson portrays Ruth as rather staid and conventional, while Christine Ebersole is sexy and kittenish as Elvira, though she is not as effervescent as one might like. Rupert Everett’s Charles is the self-absorbed upper-class male you have seen in a hundred mid-last-century films.

It turns out that Charles, for all he complains about the new state of affairs, is the one who summoned Elvira from the netherworld during the séance. Coward’s back story is a middle-aged man’s fantasy of having two wives.

“Blithe Spirit.” Written by Noel Coward, directed by Michael Blakemore. Shubert Theatre 225 West 44th Street. 212-239-6200. Opened March 15, 2009, Closes July 19th.

Review on NYTheatre-Wire site

Sunday, July 5, 2009

Exclusive: Florida banking agency helped Stanford set up unregulated office to sell his phony CDs

Filed under: Fraud,offshore,photo gallery,Regulation & enforcement,Scoops — Tags: — Lucy Komisar @ 12:18 pm

State aided suspect in huge swindle


Florida regulators — over objections by the state’s top banking lawyer — gave sweeping powers to banker Allen Stanford, who would be accused of swindling investors of $7 billion.

By Lucy Komisar, Michael Sallah and Rob Barry
Miami Herald, July 5, 2009

[Lucy Komisar brought this story to the Miami Herald, which assigned two of its staff to do added local reporting.]

Winner in 2010 of
* Gerald Loeb award for business and financial journalism by medium & small newspapers;
* National Press Club award for Newspaper Consumer Journalism;
* Sigma Delta Chi award for Non-Deadline Reporting (Daily Circulation 100,001+) bestowed by the Society of Professional Journalists;
* National Headliner Award, second place for Business News, administered by The Press Club of Atlantic City;
* Sunshine State Award, first place for Non-Deadline Business Reporting, given by South Florida chapter, the Society of Professional Journalists.

The story led to a reform bill passed by the Florida legislature in 2010.

Allen Stanford escorted out of the federal courthouse in Houston June 29, 2009. Pat Sullivan/ AP Photo

Allen Stanford escorted out of the federal courthouse in Houston June 29, 2009. Pat Sullivan/ AP Photo

Years before his banking empire was shut down in a massive fraud case, Allen Stanford swept into Florida with a bold plan: entice Latin Americans to pour millions into his ventures — in secrecy.

From a bayfront office in Miami in 1998, he planned to sell investments to customers and send their money to Antigua.

But to pull it off, he needed unprecedented help from an unlikely ally: The state of Florida would have to grant him the right to move vast amounts of money offshore — without reporting a penny to regulators.

He got it.

Over objections by the state’s chief banking lawyer — including concerns that Stanford was laundering money — regulators granted sweeping powers never given to a private company.

(Read the Stanford Trust Memorandum of Agreement with Florida.)

The new company was also allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud.

Over the next decade, the Miami office was among Stanford’s busiest in the sale of controversial investments now at the heart of the federal government’s sweeping fraud case against Stanford and his lieutenants.

”There was no lawful way that office should have been opened,” said Richard Donelan, the state’s chief banking counsel who opposed the deal.

Donelan said he argued that the Stanford plan violated state law, and that there were concerns about money laundering in the Caribbean and “whether Stanford’s bank was in conformance with the law.”

(Read the internal agency argument about the Trust office.)


Represented by a powerful Florida law firm, Stanford got approval to create the first company of its kind: a foreign trust office that could bypass regulators, according to records obtained by The Miami Herald.

Art Simon

Art Simon, enabler of the fraud, gives no reason for overriding banking lawyer and allowing Stanford to move money offshore.

The Florida banking director who signed the agreement, Art Simon, now admits he made a mistake.

“Upon reflection, would I have liked to have done it differently? Would I have liked to stop them from doing what they currently did? Yes, of course.”

The state’s decision allowed Stanford to expand his banking network by offering his prize investments — certificates of deposit — without reporting the purchases, according to state and court records.

In the first six years, the office — known as Stanford Fiduciary Investor Services — took in $600 million from customers, state records show.

Now, with Stanford indicted on sweeping fraud charges last month, the Miami office poses serious challenges for federal agents trying to find assets from the demise of his vast banking fortune, legal experts say.

In all, prosecutors say Stanford diverted nearly $7 billion from customers who purchased his CDs, long touted for their high returns.

Some of the millions went to support Stanford’s lavish lifestyle, including private jets, expensive cars and mansions, including a $10.5 million home in Gables Estates that he has since torn down, records show.

Investors who flocked to the luxury offices on the 21st floor of the Miami Center to buy the CDs are clamoring for their money, saying they were fleeced of millions.

”It’s not fair that so much money has gone down the drain,” said Margie Morinaga, whose 84-year-old father lost $400,000.

Former customers are sending letters to the court receiver, pleading for help; others are angrily organizing to press for the recovery of their money.

At least 2,100 customer accounts were set up at the Miami office in the first six years, state records show.

Unlike other Stanford companies around the country, the Miami office was exempt from reporting the amounts of money sent overseas — bypassing anti-laundering laws.

In fact, employees shredded records of the trust agreements and CD purchases once the original documents were sent to Antigua, state records show.


For years, the high-rise offices — adorned with marble floors, Oriental rugs and expensive artwork — provided privacy for investors, but few protections.

Because trust officers weren’t required to keep records, investigators will have to rely on investors and the Antiguan bank to trace the money that moved through the office, say lawyers for customers.

Florida Office of Financial RegulationOfficials for the Florida Office of Financial Regulation are now reviewing the decision made a decade ago, but they refuse to comment.

”All I can tell you is that there was no one that specifically regulated the office,” said Linda Charity, director of the state’s Division of Financial Institutions.

Simon, the Florida banking director who approved the agreement, says he should have banned the office from handling money.

”It raised serious questions in my mind after the fact as to whether we should have had tighter provisions,” said Simon, a former state representative who helped draft much of Florida’s modern banking legislation.

The office was only supposed to provide information for people interested in the offshore trust’s services — not offer CDs and accept money, he said.

But in clear language, the agreement reached between Stanford and state regulators allows money to flow to and from the center.

Simon, 63, now retired from state government, said he didn’t recall the language until he was e-mailed a copy by The Miami Herald.

But several lawyers who reviewed the documents for The Herald said much of the responsibility rests with Simon. ”In this case, he was responsible for having an effective system of enforcement,” said Jeffrey Sonn, a Fort Lauderdale securities attorney. “The state didn’t do the kind of reviews it needed to do.”

Miami banking lawyer Jose Sirven said the state may have been able to approve the office, but questioned the state’s decision to let employees transfer money.

Donelan, the state’s chief banking counsel, said he did not believe Stanford had the right to open the satellite office in the first place.

“It was not an American financial institution. I had expressed that opinion. There was no regulation. It was as if they had an office that could be selling shoes or ice cream.”


Now an attorney with Florida’s Department of Financial Services, Donelan, 58, said he had other worries. “There were regulatory issues about the role that Mr. Stanford was playing as far as the circulation of money in the Caribbean.”

Seven years earlier, Stanford had run into problems while owning a bank on the Island of Montserrat, voluntarily giving up his license during a British money laundering investigation.

But during negotiations with the state, lawyers for Stanford argued there was nothing in Florida law that banned the kind of company Stanford wanted to create.

They also said the new company would abide by an agreement with the state, including the right to transfer money for clients, but not operate as a bank.

The agreement also barred employees from giving financial advice to customers.

Carlos Loumiet, a former Greenberg Traurig lawyer who helped draft the deal, declined to comment, citing ethical concerns.

(Read the Greenberg Traurig law firm memorandum)

In the end, the Miami company was allowed to open under a unique category: a foreign trust representative office — the only one in Florida.

While the state allows out-of-state trust companies to set up satellite offices in Florida — catering to snow birds loyal to their hometown banks — there are no provisions in Florida law for similar foreign offices.

Stanford’s negotiation with the state wasn’t the first time the flamboyant tycoon tried to open a local office to serve his offshore venture.

Earlier, he went to Miami attorney Bowman Brown, who said he declined to represent Stanford. A longtime banking lawyer, Brown said there were several elements that didn’t seem right about Stanford’s plan.

”He wanted to set up an office in Miami to serve a business operation in the Caribbean,” said Brown. “The idea was to attract a Latin American clientele as a platform to sell securities.”

But Brown said Stanford “was not interested in undergoing any substantive banking regulations or submitting to government examiners.”

At the time, the Caribbean basin had a ”bad reputation as a pirate banking jurisdiction, and I just wasn’t interested in taking part in this,” Brown said.


By the time the state approved the trust office in December 1998, Stanford was already hawking his top product: certificates of deposit.

One of the attractions of the CDs were the competitively higher yields than other banks — often by two points.

The Miami office was a big draw for foreigners jetting to Miami, said Charles Hazlett, a stockbroker who worked for another Stanford firm — a brokerage — on the same floor.

”The trust office was one of the busiest in the Stanford operation,” said Hazlett. “Compared to us, they were a big office, 30 to 40 people, everyone selling CDs.”

Hazlett said the Stanford stockbrokers were also pushed to sell the company’s signature product.

Rosa Mejia says word of the Miami office spread throughout the hemisphere. She recalls escorting her father to the Miami office four years ago.

Saraminto Perez  business cardTheir trust representative, Saraminta Perez, offered a five-year, $300,000 CD at higher returns than most banks, said Mejia.

Her father, 69, a retired banker from the Dominican Republic, signed a trust agreement and a check. The money was to go to Stanford’s bank in Antigua, which issued the CDs.

”We thought the money would be safe,” Mejia said.

Perez referred questions to her lawyer, saying her career was cut short by Stanford’s collapse.

Miami attorney Jeffrey Tew said trust officers didn’t know money for the CDs was allegedly being stolen by Stanford and others. ”There were people [in the Miami trust office] managing $100-million-dollar portfolios,” he said. “They thought they were helping their clients.”

However, Hazlett says he raised concerns in 2002 about the legitimacy of the CDs with the Miami office’s executive director, Nelson Ramirez.

”I remember very clearly saying the math didn’t add up, that I needed more information on the background of these CDs,” said Hazlett, who pressed the issue with Stanford supervisors during a compensation suit in 2004.

Ramirez, who left Stanford three years later, did not return phone messages.

Ultimately, Hazlett said he was given information about the Antiguan bank’s investments — the foundation of the CDs — but the data was so minimal ”it made me even more suspicious,” he said.

Federal agents now say the bank’s investments were vastly overvalued and, in many cases, fabricated.

After the Miami trust office was created, Stanford lawyers approached Texas to open a similar office there. In 2001, the state agreed, but with a key difference: The Texas office wasn’t permitted to handle money.

”Basically, all they could do was market,” said Deborah Loomis, assistant general counsel for the Texas Department of Banking.

But the Miami office was busy taking in money from customers — and growing, from 18 employees in 2001 to 46 by 2005.


While the state agreement barred the office from giving financial advice to clients, several experts said the state should have been monitoring the sale of Stanford’s CDs.

”I can tell you that CDs are securities and are supposed to be regulated,” said Sonn, a securities attorney.

Sonn also cautioned the high yields offered by Stanford’s CDs were ”huge red flags” that should have prompted state investigators to challenge claims the products were rooted in legitimate investments.

Andrew Stoltmann, an adjunct professor of securities at Northwestern University, said the state failed by not performing routine examinations.

”You have to put yourself in a position to at least try to catch people committing fraud,” said Stoltmann, who practices securities law in Chicago.

Records show that state examiners visited the office three times over the past 10 years, but only to ensure that the 1998 agreement was kept.

During one of those visits in 2001, state agents noted that office employees routinely would send purchase records to Antigua and then destroy the local documents.

It wasn’t until February that the office was finally shut down — along with Stanford’s bank network — when the U.S. Securities and Exchange Commission filed fraud charges against Stanford and his top officers.

The office furnishings, including cherry-wood desks and company credenza, are now for sale.

Rosa Mejia, whose father lost $400,000 in worthless CDs from the Miami office, said investors were impressed by the staff and offices on the 21st floor. ”Everything was first class,” she said. “We thought our money was safe.”

Loeb award The winners.

The article, which will download as a pdf.

Comments on this story:

The New York Times

Columbia Journalism Review

Story leads to Florida reform law
As a result of this story, the Florida legislature in 2010 passed a law giving the Office of Financial Regulation authority to regulate international trust company representative offices (the Stanford structure) and ordered such offices to meet minimum licensing requirements and be subject to the examination and enforcement authority of the OFR.

The Florida Senate Banking Committee staff analysis said, “The impetus for providing this additional regulatory authority is to prevent future Ponzi schemes resembling the one allegedly executed in recent years by Allen Stanford.”

Staff analysis of SB 1264 that was passed and codified as Chapter 2010-9, Laws of Florida.


Friday, July 3, 2009

“Waiting for Godot” – Beckett on the uselessness of expecting God to save us from misery

Filed under: Theater — Lucy Komisar @ 5:38 pm

By Lucy Komisar

For me the mystery of Samuel Beckett’s play about two down-at-the-heels hobos who watch an overbearing “master” abuse a pathetic slave is the division of the audience into those who laugh and those who don’t.

I noticed this years ago when I first saw the play Off Broadway. There it was again at the current Roundabout Theatre production. When I commented about it to my seatmate at intermission, a lady in the row in front of us (in her 60s) turned around and nodded emphatically.

Is this an age thing? Are the chucklers people brought up on TV laugh tracks who think that if they don’t understand something the proper response is to guffaw?”

Bill Irwin and Nathan Lane, photo by Joan Marcus.

Bill Irwin and Nathan Lane, photo by Joan Marcus.

It’s not as if they are laughing at pratfalls. Beckett’s austere landscape of white rocks and a bare tree (sets by Santo Loquasto) backdrops two raggedy old men who have been together 30 years and don’t find much to enjoy about life.

Gogo/Estragon (Nathan Lane) is distraught, snooty. Didi/Vladimir (Bill Irwin) is mild calm and understanding. They wonder, “We lost our rights.” Didi makes that clearer: “We got rid of them.” (Estragon, by the way, is French for the herb tarragon.)

Most pathetic is the drooling slave Lucky (John Glover) in stringy white hair, puffing and panting as he is driven by the fat Pozzo (John Goodman). Lucky carries Pozzo’s baggage, a satchel and 3-legged stool.

John Glover, Bill Irwin, Nathan Lane, John Goodman, photo by Joan Marcus

John Glover, Bill Irwin, Nathan Lane, John Goodman, photo by Joan Marcus

They are mankind, the oppressor and the oppressed. And a couple of onlookers only barely better off.

Didi says, “It’s a scandal to treat a human being that way.”

Gogo: “Why doesn’t he put down his bags? It is pathetic.” Much of the audience laughs.

The characters race and pace, half run/walk around the stage. From the stage, “The air is full of our cries, but habit is a great deafener.” So is the laughter of the masses.

For me then, the wonder of the play is not just its ability to evoke cruelty, but the unthinking odd laughter that it provokes.

Director Anthony Page has created a fantasy slice of life that bursts vividly out of the bubble of the viewer’s imagination.

Nathan Lane is too over-the-top for my tastes; he seems to be playing vaudeville. Bill Irwin is subtle and moving. My favorite of the cast is John Glover as Lucky; he exudes misery to the point where it seems an artistic trait. John Goodman never persuaded me that he was the slave-driving Pozzo.

And, yes, after all these years we have now learned that it is GOD-oh, with the emphasis on the first syllable. But Beckett’s point is that in the face of misery and brutality, God never shows up.

“Waiting for Godot.” Written by Samuel Beckett; directed by Anthony Page.
Produced by Roundabout Theatre Company. Studio 54, 254 West 54th Street.
212-719-1300. Opened April 30, 2009; closes July 12, 2009.

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