Obama and lawmakers give back Stanford donations

By Thomas Ferraro

WASHINGTON (Reuters) - President Barack Obama and U.S. lawmakers have vowed to donate to charity the campaign donations they got from Texas billionaire Allen Stanford, who now stands accused of massive fraud.

Stanford was a relative newcomer to Washington politics, but still managed to spread a fair amount of money on both sides of the aisle over the past decade, records show.

Now charged by the U.S. Securities and Exchange Commission with an $8 billion (5.6 billion pounds) fraud, the 58-year-old tycoon may find the largesse won him few lasting friends in the capital.

Democratic Senator Bill Nelson, one of the lawmakers who received Stanford donations, "wants every thin dime associated with him returned to charity or used in some way that could help folks who were ripped off by this guy," Nelson's office said in a statement.

Other lawmakers issued similar statements on the latest scandal to hit confidence in financial institutions, one that again promised to embarrass the U.S. Congress for failing to demand tighter regulation of the financial industry.

Federal regulators on Tuesday charged Stanford with having engaged in a massive fraud involving certificates of deposit with improbably high interest rates from his Antiguan affiliate, Stanford International Bank. FBI agents served the civil complaint on Stanford in Virginia on Thursday.

During the past decade, Stanford's firm, the Stanford Financial Group, spent $4.8 million in lobbying, according to the Centre for Responsive Politics, a private group that tracks money and politics in the nation's capital.

Stanford, his political action committee, employees and members of their families also made $2.4 million in campaign contributions to federal candidates, parties and committees since 2000, the Centre said.