It is hard to escape the presence of Texas banker R. Allen Stanford on this island.

His Stanford International Bank, the largest offshore bank here, is one of the first things one sees on arrival at the airport, along with nearby building projects he is sponsoring. A new indoor basketball stadium is being built with a sign saying it is a gift from Stanford to the people of Antigua. He owns the Sun, the nation's largest newspaper and is financing a modern hospital.

"Allen Stanford has done a lot of good for us," said Lionel A. Hurst, Antigua's ambassador to Washington.

But this year, the real estate developer from Houston has found himself at the center of a controversy over efforts to reform this island's offshore banking sector.

It started when the United States two years ago began pressuring Antigua to tighten regulation of its offshore financial industry. Prime Minister Lester Bird asked Stanford, a personal friend, to undertake the task.

Stanford, 49, accepted and even agreed to pay for the services of a group of U.S. experts to help rewrite laws and create a board, with himself as the president, to oversee the changes.

Over 18 months, new laws to control money laundering were passed. One prohibited cash deposits in offshore banks, and another increased the minimum amount of capital needed to open a bank from $1 million to $5 million. Five of the nation's 54 offshore banks were shut, and another 20 are under review, including several Russian banks that had attracted international scrutiny. "Know your customer" laws were strengthened. The International Financial Sector Authority (IFSA) was created to oversee offshore activities.

"I have no doubt we have the best anti-money-laundering laws in the world," said Patrick O'Brien, a former customs agent recruited by Stanford to write the laws. "We have things in there even the United States doesn't have."

But Antigua's actions, instead of drawing praise from U.S. officials, brought down Washington's wrath. On April 7, the Treasury Department issued a rare advisory, urging "enhanced scrutiny" of all financial transactions through Antigua.

In a letter to Bird, the Treasury Department said Antigua had "weakened its anti-money laundering laws to the point [that] they are now significantly below international standards, making Antigua more vulnerable to money laundering." The British issued a similar advisory a few days later.

U.S. officials said Stanford and his associates in the reform effort had left loopholes in the new laws that made it harder than ever to get at bank records. U.S. officials also said they viewed Stanford's participation and financing of the board as a conflict of interest.

A State Department cable obtained by The Washington Post suggested that Stanford wielded undue influence in the Bird government. It noted that Errol Cort, who had been Stanford's attorney, was named to the board and that Bird earlier this year made Cort attorney general.

Antiguan ambassador Hurst commented, "There is no doubt [Stanford] wants influence. He knows Lester Bird, but he doesn't get everything he wants."

Stanford, Cort and Bird all declined to be interviewed for this story, but Stanford's chief of staff, Yolanda Suarez, said her boss was simply trying to help clean up a banking sector he knew was vulnerable to corruption. When the controversy erupted, Stanford and other bankers left the IFSA board. Some of the laws the United States and Britain objected to were rewritten to eliminate potential loopholes.

Stanford and the Antiguan government viewed the U.S. and British advisories and subsequent publicity as an attempt to coerce Antigua into shutting down the offshore sector, not simply cleaning it up.

"Allen Stanford did not feel that if this was done with the benevolent help of the U.S. and Britain it would help Antigua," said his attorney, Carlos Loumiet, in an interview. "They were trying to put the fox in charge of the chicken coop, and frankly the chickens weren't very happy about it."

Loumiet, in a May 7 letter to James E. Johnson, Treasury Department undersecretary for enforcement, acknowledged concerns over a potential conflict of interest with Stanford and other bankers on the IFSA board. But he said Antigua, with only 62,000 people, did not have a big enough talent pool to exclude bankers from an oversight role. U.S. officials say the advisory on Antigua will not be lifted any time soon.

Stanford has vowed to continue working in Antigua. "My motivations and interests are transparent: to see Antigua develop into a world-class international financial center, first for the good of the country and its people and second for the good of my investments and businesses here," Stanford wrote in an open letter published March 3 in his newspaper.

"I welcome public scrutiny of my actions and challenge others to clearly state their motives and submit themselves and their actions to the same level of public scrutiny and investigations for which they call."