Why are Stanford's Campaign Donations Going to Charity?

Everybody's doing it: Barack Obama, John McCain, Chris Dodd, etc. But none of them are going into too much detail about why exactly they're giving the value of Allen Stanford's campaign donations to charity.

I can see why politicians would want to distance themselves from Stanford. But if he really is a fraudster, and if the money he donated to them wasn't his to give, then shouldn't they really be returning the money to the Stanford receiver, where it can then get given back to the defrauded depositors?

Besides, Obama and McCain and Dodd were presidential candidates: they already got full value out of Stanford's donations, while the presidential campaign was ongoing. At this point, it's over: it's far too late to refuse or return the money.

And although I'm sure that the charities chosen by these candidates are indeed worthy causes, I'm equally sure that they will offer no succour to Stanford's victims.

In a weird way, the politicians are trying to pull off exactly the same trick as Stanford himself: cleansing themselves of suspicion by donating money to charity. And as Matthew Bishop says, giving the money away should in no way give these politicians any kind of immunity from tough questions:

If philanthropy sometimes attracts rogues, so do, for example, religion and politics. We don't (or shouldn't) issue sweeping dismissals of the credibility of those core aspects of human life every time a congressman is found fiddling his expenses or a priest fiddling with his choirboys. The right response is to scrutinise thoroughly those who aspire to leadership in religion and politics, and create systems to ensure they are held to account.

Stanford was happy to spend many millions of dollars on lobbyists and campaign donations in an attempt to keep his offshore financial empire free from scrutiny. To a surprising extent, his tactics seem to have worked. So when the Obama economic team start putting together a new super-regulator, giving that regulator the ability to look across borders must be high up on the list of priorities. Otherwise you end up with the ridiculous situation where a blogger accessing the Stanford International Bank website has more damning information on Stanford than the SEC and FBI combined.