Stanford scandal sets Antigua on edge

Antigua is usually filled with the sounds of birds chirping and fronds rustling, but the hum of paradise is lately disrupted by more than the latest financial scandal. As the country closes in on a critical national election, bullhorned cars wind down the narrow lanes blaring support for the incumbent United Progressive Party and the once mighty Antigua Labour Party. The name of R. Allen Stanford (Sir Stanford to locals) is heard as well. The knighted businessman isn't running for office, but his close ties to the Labour Party could have a decisive influence on this tight race.

Before the Securities Exchange Commission accused R. Allen Stanford of perpetrating a multi-billion dollar international fraud, the Texas banker built a flashy playground in Antigua -- the massive Stanford International Bank and the Bank of Antigua buildings, the Pavilion Restaurant, and the Stanford Athletic Club. These bold hunks of architecture, columned and nestled behind hedgerows, ooze a new money aura.

Across from the athletic club, next to the 5,000-seat Stanford Cricket Ground, is the piece de resistance: the Sticky Wicket. This restaurant and bar was the corner of Stanford's fiefdom where employees say he spent a lot of time. From the neon cricket bats that grace the top of the massive entryway to the liberal use of orange, tangerine, and pink fake slate, the Sticky Wicket screams "party" rather than "polish."

Stanford may not have hobnobbed with a lot of everyday Antiguans (few people from street vendors to resort owners had every actually met him), but he was an integral part of Antiguan life. Only the government employed more people; and he provided benefits like health care that were unheard of on the island.

This vast playground and the foundation for his financial empire was created during the Labour government of Lester Bird, who had taken over as prime minister in 1994 when his father Vere Bird retired. Lester and his father made Antigua one of the Caribbean's most attractive destinations for offshore money with perks like no business taxes and was eager to grant citizenship to prominent businessmen.

But the Bird's rule came with charges of corruption. In 2002 an investigation was launched to find out where $230 million in state health insurance money had gone. Labour government officials had allegedly been treating the state insurance fund as a personal slush fund to pay for parties and kickbacks to government allies. In another case, Swiss banker Bruce Rappaport, who's been tied to money laundering, agreed in February to repay $12 million to Antigua, after an investigation found him guilty of robbing Antigua of millions of dollars with the help of Lester Bird.

In the 2004 national elections, the United Progressive Party made Labour Party corruption a key issue and successfully ousted Bird. Stanford donated to Labour candidates in the 2004 election, well aware that its defeat would crimp his development ambitions. And he was right. The new government blocked his plans.

Now that Stanford is under arrest, many Antiguans see him as just part of a pattern for a Bird-Labour government. As Stanford-controlled businesses lay off ever more Antiguans, sentiment toward Labour grows more negative. Antiguans are fairly tight lipped when it comes to Stanford, thanks in large part to his largesse as an employer. Nearly everyone says that they'll "wait to see what the investigators find before we judge him." But they are more forthcoming with their opinions on the election.

Before the Stanford news broke, the election race was too close to call. The UPP was struggling to deliver on its anti-corruption message. But now people are more willing to say that the Labour might not put the interests of the people first. As one women at a fruit stand told me, the Stanford affair is proof that they were right to elect the UPP in 2004; and that the new government needs another five years to really change the direction of the country.

"They inherited a lot of bad things that can't be turned around in just five years," she said.

Whoever wins will inherit economic problems not seen in decades as tourism suffers amid a global recession and regulators circle the nation's offshore finance operations. But the outcome is more important than an election has been in a long time. A Labour win means a likely return of the old Bird regime. A win for UPP could set the country more permanently in a new direction that could make it harder for the Stanfords and Rappaports of the world to set up shop on this particular island. Stanford wanted to be a force here in Antigua, and now that wish has certainly come true.