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Suddenly Mr. Stanford, whose company ran a bank in Antigua, made a lot of friends, spreading money to both political parties and their leaders. The legislation languished in a Senate committee until the terrorist attacks of 9/11 convinced Congress it needed to act.

Stanford, accused by the US Securities and Exchange Commission (SEC) of an $8 billion fraud, continued to give money to scores of members of Congress, as well as the Obama presidential campaign.

The contributions, along with those from accused swindler Bernard Madoff, once again raise questions about the relationship of the rich and sometimes fraudulent to America’s lawmakers.

The campaign contributions are “one vehicle to try to influence and skew policy,” says Sheila Krumholz, executive director of the Center for Responsive Politics (CRP), which follows campaign contributions. “Often the efforts are too brazen.”

Donations of $2.4 million

In Stanford’s case, since 2000 he, his company, or its employees have delivered $2.4 million to political operations, according to Ms. Krumholz. Stanford and his wife personally gave $931,000.

“It’s a lot of money when you consider 99 percent of the public doesn’t even give $200,” the amount needed to gain the attention of the Federal Election Commission, Krumholz says. “It makes him a big player.”

In fact, politicians of both parties have been scrambling to distance themselves from the scandal. An Obama aide says the $4,600 contribution from Stanford himself has been donated to charity. Sen. Bill Nelson (D) of Florida is going one step further, shedding money that came from Stanford or his employees.

“Bill has told his campaign he wants every thin dime associated with Stanford returned to a charity or used in some way that could help folks who were deceived by this guy,” a Nelson aide says in an e-mail.

Echoes of Madoff scandal

The same thing happened after the Madoff financial scandal broke. Mr. Madoff and his wife were also contributors to the political process, giving $238,200 since 1991, according to the CRP. His own donations, plus those of his firm, total nearly $1 million.

Two of the largest recipients, Sens. Ron Wyden (D) of Oregon ($13,000) and Charles Schumer (D) of New York ($12,000), say they have donated the money to charity.

Federal authorities accuse Stanford of “massive” fraud centering on high-interest-rate certificates of deposit (CDs). According to the SEC, in recent weeks the Stanford Financial Group has quoted rates as high as 10 percent on a five-year CD, more than twice the highest current US rate, which bankrate.com says is less than 4 percent.

Stanford, who has not been charged with any crime, may have yet more pressing concerns. According to an ABC News report, federal authorities are investigating the banker regarding money laundering for a Mexican drug cartel. The network, on its website, says one of Stanford’s private planes was detained last year by Mexican officials, who found suspicious checks that might be drug related.

Ties to US, Antigua

Stanford, who was born in Mexia, Texas, has dual citizenship in the US and the Caribbean nation of Antigua and Barbuda, the site of his international banking operations.

In the past, the Caribbean island nation has been in the cross hairs over its money-laundering rules.
Twelve years ago, after the US imposed sanctions on the island, then-Prime Minister Lester Bird asked Stanford to help oversee a rewrite of Antigua’s money-laundering regulations.

“The embassy described it as record-gate or file-gate,” recalls Jonathan Winer, then deputy assistant secretary of State for international law enforcement. “Stanford took over the records of the offshore bank regulator, created the rules for cleaning it up, and drafted the legislation. None of us had ever seen anything like this before,” says Mr. Winer, now a senior vice president at APCO International in Washington, a global consulting firm.

Stuart Eizenstat, who was deputy secretary of the Treasury from 1999 to 2001, recalls the notoriety of Antigua as it failed to improve. Antigua appeared on a Treasury “name and shame” list during that period, but, unlike other countries, Antigua was not “shamed.”

“That list included Russia, Liechtenstein, Panama, Israel, and Antigua among countries not up to international standards,” says Mr. Eizenstat, now head of the international practice at the law firm Covington & Burling in Washington.

“Most of the other countries did change their rules, but not Antigua,” he says.

Fraud legislation stalled

Cutting down on money laundering and financial fraud became a significant interest of Rep. Mike Rogers (R) of Michigan, a former FBI agent. He introduced legislation to improve the ability of state and federal agencies to share information. With the support of the Clinton administration, it passed the House.

But when the bill reached the US Senate, it stalled.

The public-interest lobbying group Public Citizen became curious about what happened. It found Stanford had given contributions to the “soft money” accounts of then-Sen. Tom Daschle (D) of South Dakota, who was Senate minority leader, as well as other key legislators and both political parties.

“What we concluded was that it was his soft-money contribution, aimed at killing the money-laundering legislation, that got the bill killed,” says Steve Weissman, then at Public Citizen, now associate director for policy at the Campaign Finance Institute in Washington.

Representative Rogers knew from his experience at the FBI that something needed to be done, says a spokeswoman.

The move comes after Sweden turned down GM’s request for government help for Saab.

An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.

The Swedish government on Wednesday rejected a request from loss-making GM to inject money into the carmaker. GM, which is seeking help from the U.S. government to avoid bankruptcy at home, has been looking for buyers for Saab but said it needs more funding to spin off or sell the division.

“We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment,” Saab’s managing director, Jan Ake Jonsson, said in a statement.

The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the U.S.

“Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed,” Saab said, adding it would seek funding “from both public and private sources.”

Demand at food banks across the country increased by 30 percent in 2008 from the previous year, according to a survey by Feeding America, which distributes more than two billion pounds of food every year. And instead of their usual drop in customers after the holidays, many pantries in upscale suburbs this year are seeing the opposite.

Here in Morris County, one of the wealthiest counties in the country, the Interfaith pantry opened for an extra night last week to accommodate the growing crowds. Among the first-time visitors were Cindy Dreeszen and her husband, who both have steady jobs — his at a movie theater and hers at a government office — with a combined annual income of about $55,000.

But with a 17-month-old son, another baby on the way, and, as Ms. Dreeszen put it, “the cost of everything going up and up,” the couple showed up in search of free groceries.

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In June, 2008, Sebelius attended the 2008 Bilderberg meeting in Chantilly, Virginia, a fact not reported by the corporate media in her home state. She was included on the Official 2008 Bilderberg Participant List.

In 2007, Sebelius attended the Bilderberg meeting in June in Istanbul, Turkey and the Kansas City Star reported the story on Sept 2, 2007. “It is a rather prestigious group,” Sebelius spokeswoman Nicole Corcoran told the Star. “She was pleased to be invited.”

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To Israel, he appears to have been a valued spy, sending reports and taking clandestine photographs of Palestinian groups and Hezbollah since 1983.

Now he sits in a Lebanese prison cell, accused by the authorities of betraying his country to an enemy state. Months after his arrest, his friends and former colleagues are still in shock over the extent of his deceptions: the carefully disguised trips abroad, the unexplained cash, the secret second wife.

Lebanese investigators say he has confessed to a career of espionage spectacular in its scope and longevity, a real-life John le Carré novel. Many intelligence agents are said to operate in the civil chaos of Lebanon, but Mr. Jarrah’s arrest has shed a rare light onto a world of spying and subversion that usually persists in secret.

Mr. Jarrah’s first wife maintains that he was tortured, and is innocent; requests to interview him were denied.

From his home in this Bekaa Valley village, Mr. Jarrah, 50, traveled often to Syria and to south Lebanon, where he photographed roads and convoys that might have been used to transport weapons to Hezbollah, the Shiite militant group, investigators say. He spoke with his handlers by satellite phone, receiving “dead drops” of money, cameras and listening devices. Occasionally, on the pretext of a business trip, he traveled to Belgium and Italy, received an Israeli passport, and flew to Israel, where he was debriefed at length, investigators say.

At the start of the 2006 war between Israel and Hezbollah, Israeli officials called Mr. Jarrah to reassure him that his village would be spared and that he should stay at home, investigators said.

He was finally arrested last July by Hezbollah, which now has perhaps the most powerful intelligence apparatus in this country. It handed him to the Lebanese military — along with his brother Yusuf, who is accused of helping him spy — and he awaits trial by a military court.

Several current and former military officials agreed to provide details about his case on condition of anonymity, saying they were not authorized to discuss it before the trial began. Their accounts tallied with details provided by Mr. Jarrah’s relatives and former colleagues.

It is not the family’s first brush with notoriety. One of Mr. Jarrah’s cousins, Ziad al-Jarrah, was among the 19 hijackers who carried out the terrorist attacks of Sept. 11, 2001, though the men were 20 years apart in age and do not appear to have known each other well.

Mark Regev, a spokesman for Israel’s prime minister, Ehud Olmert, declined to discuss Mr. Jarrah’s situation, saying, “It is not our practice to publicly talk about any such allegations in this case or in any case.”

Villagers here seemed incredulous that a man they knew all their lives could have taken money to spy for a country that they regard with unmixed hatred and disgust.

Many maintained his innocence. But Raja Mosleh, the Palestinian doctor who was his partner for years in a school and health clinic near here, did not.

“I never suspected him before,” Dr. Mosleh said. “But now, after linking all the incidents together, I feel he’s 100 percent guilty.”

“He used to talk about the Palestinian cause all the time, how he supported the cause, he supported the people, he liked everybody — this son of a dog,” Dr. Mosleh added, his voice thick with contempt.

Mr. Jarrah would often borrow money to buy cigarettes, apparently posing as a man of limited means. Investigators say he received more than $300,000 for his work from Israel.

Only recently did he begin to spend in ways that raised questions. About six years ago, neighbors said, he built a three-story villa with a terra-cotta roof that is by far the grandest house in this modest village of low concrete dwellings. Outside is a small roofed archway and a heavy iron gate, and on a recent day a German shepherd stood guard.

Dr. Mosleh asked him where he got the money, and Mr. Jarrah said he got help from a daughter living in Brazil. It is a natural excuse in Lebanon, where a large portion of the population receives remittances from relatives abroad.

Mr. Jarrah also had a secret second wife, according to investigators and his former colleagues. Unlike his first wife, Maryam Shmouri al-Jarrah, who lived in relative grandeur with their five children in Maraj, the second wife lived in a cheap apartment in the town of Masnaa, near the Syrian border. This apparently allowed Mr. Jarrah to travel near the border in the unremarkable guise of a local working-class man.

Mr. Jarrah has said he was recruited in 1983 — a year after Israel began a major invasion of Lebanon — by Israeli officers who had imprisoned him, according to investigators. He was offered regular payments in exchange for information about Palestinian militants and Syrian troop movements, they said.

After Israel withdrew from Lebanon in 2000, thousands of Lebanese from the occupied zone in the south were tried and sentenced — mostly to light prison terms — for collaborating with Israel.

Far from the border, a different class of collaborators, rooted in their communities, persisted. A few have been caught and sentenced.

Mr. Jarrah’s motives remain a mystery. He said he tried to stop, but the Israelis would not let him, investigators said.

It all came to an end last summer. He went on a trip to Syria in July, and when he returned he said he had been briefly detained by the Syrian police, his first wife said. He seemed very uneasy, not his usual self, she said.

He left the house that night, saying he was going to Beirut, and never returned, Mrs. Jarrah said. Only three months later did she get a call from the Lebanese Army saying it had taken custody of him.

A few weeks ago, Mrs. Jarrah said, she was allowed to see him. He looked terrible, exhausted, she said.

Seven Chinese sailors were missing after the “New Star” sank on Saturday in stormy seas off Vladivostok and after a Russian warship shot at least 500 rounds into it, the official China Daily newspaper said, quoting a Chinese-language paper which in turned quoted a Russian newspaper.

The “New Star” was held at the Russian port of Nakhodka earlier this month, suspected of involvement in smuggling, before it left without permission last week, the China Daily said.

“China has already made representations to the Russian side,” Chinese Foreign Ministry spokeswoman Jiang Yu told a news conference.

“We hope they continue with the search and rescue operations for the missing sailors and clarify the reason (for the incident) as soon as possible.”

China says three Chinese crew members were rescued and seven were missing.

In video footage of the incident broadcast on Russian television, the rattle of gunfire could be heard, with authorities there claiming the ship was given adequate warning.

“The ‘New Star’ captain was called by radio, border guard boats sent light signals, a special flag demanding to stop was raised and a warning shot was fired,” a prosecutor in Nakhodka, Alexander Selentsov, told Russia’s Interfax news agency.

Interfax also quoted a border guard captain as saying “the foreign vessel disregarded authorities’ demands and was fleeing to the Chinese economic zone at a full speed.”

Relations between Beijing and Moscow have warmed up considerably under Russian Prime Minister Vladimir Putin, a proponent of a strong centralised state who has visited China several times.

FBI spokesman Richard Kolko said the Federal Bureau of Investigation had acted at the request of the U.S. Securities and Exchange Commission (SEC), and that Stanford had not been arrested. A law enforcement official said Stanford was making arrangements to surrender his passport.

The whereabouts of jet-setting, 58-year-old Stanford had been the subject of intense speculation since he failed to respond to a subpoena from the SEC to answer questions about his company’s operations.

Stanford has homes in the United States and the Caribbean.

The SEC filed civil charges in Dallas, Texas, on Tuesday against Stanford, two colleagues and three Stanford companies, accusing them of a “massive ongoing fraud”.

Earlier this week, U.S. federal agents raided Stanford Group Co offices in Miami, Houston and other U.S. cities.

Five Latin American countries have acted against Stanford businesses, and Britain’s Serious Fraud Office (SFO) is monitoring a possible U.K. link after media reports that Stanford’s books were audited in Britain.

Stanford was found in the area of Fredericksburg, Virginia, about 50 miles south of Washington, D.C.

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Antigua has faced U.S. scrutiny in the past for alleged money laundering activities and operations by suspected Russian “shell” banks.

Jonathan Winer, a Washington lawyer and former State Department official in the Clinton administration, said that following a U.S. warning to Antigua in the late 1990s, consultants and lawyers working for Stanford took control of records of Antigua’s bank regulatory agency “to carry out a cleanup” of the suspect banks.

The local bank regulator objected, as did the U.S. government, Winer said. “The conflict of interest that we felt existed with using Mr. Stanford and his people to clean up the banking system was unique … it was bizarre and inappropriate.”

“One of the results of all this was that Antigua was put on a watch list.”

Antigua-based accounting firm C.A.S. Hewlett, which the Evening Standard reported had audited Stanford’s books, moved its operations to London after its founder Charlesworth ‘Shelley’ Hewlett died last month, newspapers said.

“It’s a situation where there is the possibility there may be a UK link and so we are monitoring the situation,” a spokesman for the SFO said.

“It’s not the case that we have launched investigators at it. We are making contact and liaising with other authorities,” the spokesman also said.

C.A.S. Hewlett has offices in a number of London addresses, but the numbers were either disconnected, or rang out.

Two people with neighbouring businesses in Enfield, a residential suburb north of London, told Reuters that C.A.S. Hewlett had let a small office in the building on Southbury Road, but that the employees left some four years ago.

One of the two said that about once a month she saw a handful of “middle-aged people” going to and from the Hewlett offices, but could offer no further details.