Hugo Chavez Bails Out Allen Stanford-Hit Island
The island nation of Antigua and Barbuda — hard-hit by the Stanford Financial scandal — is getting a $50 million bailout from Venezuelan President Hugo Chavez.
Stanford was Antigua's largest private employer before the company was charged with running an $8 billion Ponzi scheme in February and shut down.
The nation's former top financial regulator, Leroy King, has been indicted in the U.S. for hiding the alleged fraud from regulators, and Stanford investors have sued the Antiguan government for $24 billion charging it was Stanford's "full partner in crime."
The $50 million in aid from Venezuela that the Antiguan government requested only last week will barely begin to address the country's financial crisis. But in a written statement, Antiguan Finance Minister Harold Lovell said, "This injection of funds will be extremely instrumental in allowing the Government to close the fiscal gap in 2009."
The statement does not address the terms of the bailout, including whether Antigua will be required to pay any of the money back.
Lovell said most of the money, $35 million, will be used "as budgetary support," allowing the government to continue its day-to-day functions. Another $7 million will be used for economic stimulus, and $6.5 million will go toward shoring up the nation's tax collection agency. The remaining $1.5 million will be used for social programs.
But the statement, which does not mention the Stanford scandal, noted that the nation's problems are not over.
"While this injection of $50 million will be of enormous benefit," Lovell said, "there still remain significant challenges that must be addressed over the coming months."