Court: Political Committees Must Return Stanford Donations

A Dallas federal court today ordered the return of nearly $2 million in political donations made by Robert Allen Stanford that had been sought by Ralph Janvey, the court-appointed receiver.  While noting that there appeared to be no bad faith on the part of the five Republican and Democratic national political committees, District Court Judge David Godbey agreed with Janvey that the money should be returned to benefit the defrauded investors of Stanford's scheme.  In total, the amount to be returned exceeds $1.7 million including court-ordered pre-judgment interest.

In his order granting Janvey's motion for summary judgment, Judge Godbey recognized the inherent principles of equity and the fact that the political committees would "endure no greater hardship than that suffered by other innocent victims of the Stanford defendants’ Ponzi scheme who must do the same.” Janvey has filed a large amount of 'clawback' lawsuits that seek funds from investors who received distributions in excess of their principal amount invested with Stanford.  According to the Stanford Receivership website, Janvey has filed 844 clawback lawsuits to date.

Also of interest is the apparent effort by the political committees to avoid such an outcome.  One of the attorneys representing Janvey has indicated that he intends to seek reimbursement for legal fees expended in litigating the issue.