SAN FRANCISCO (Reuters) – Financier Allen Stanford is incompetent to stand trial at this time over accusations that he led a $7 billion fraud, a U.S. judge in Texas ruled on Wednesday.

Stanford, who had been accustomed to jetting around the globe in private aircraft, was indicted in 2009 on 21 counts including securities fraud and money laundering. U.S. prosecutors accuse him of creating false accounting records, lying to investors and bribing a regulatory official in Antigua.

Stanford has pleaded not guilty and was previously scheduled to begin trial this week. But that was postponed amid uncertainty about his condition.

In a written ruling, U.S. District Judge David Hittner found that Stanford did not have the present mental capacity to assist his lawyers in his defense.

While incarcerated, Stanford sustained a head injury during a 2009 confrontation with another inmate and underwent surgery for repair of facial fractures.

Psychiatrists for both the government and the defense who examined Stanford also recommended that his anti-anxiety medication be withdrawn. One doctor testified that it was unclear whether Stanford is incompetent for trial because of the injury, or due to over-medication.

The government contends that Stanford is legally competent, but nevertheless asked the court to move him to a suitable facility for psychiatric evaluation.

A representative for the U.S. Attorney's office in Houston was not immediately available to comment on Wednesday.

Hittner rejected defense arguments that the judge could commit Stanford to a private medical facility. Instead, Hittner recommended that Stanford be sent to a medical facility within the U.S. Bureau of Prisons for treatment.

Ali Fazel, an attorney for Stanford, said once Stanford is weaned off his medication, additional tests will determine how much damage was caused by the prison injury, and the drugs.

"We just have to take it a step at a time," Fazel said.

The judge did not specify a new trial date, though he admonished attorneys on both sides to diligently prepare despite Stanford's absence.

The case in U.S. District Court, Southern District of Texas is United States v. Robert Allen Stanford, 09-cr-342.

(Reporting by Dan Levine; Editing by Gary Hill, Tim Dobbyn and Bernard Orr)

HOUSTON (Reuters) – U.S. Representative Gabrielle Giffords was moved on Wednesday from an intensive-care ward to a long-term rehabilitation facility to begin her first full round of therapy since she was shot through the head 17 days ago.

Doctors also said they planned soon to insert a special valve in the breathing tube connected to Giffords' windpipe that would allow her to speak, though her medical team was vague about the extent of her capacity to form words.

Her transfer to The Institute for Rehabilitation and Research (TIRR) came a day after doctors upgraded Giffords' medical condition from serious to good, following removal of a stent from her skull on Monday that had been draining excess fluid around her brain.

Since arriving in Houston from Tucson, Arizona, last Friday, the stent, and the elevated risk of infection it posed, had forced Giffords to remain in the ICU, limiting the range of rehab activities she could pursue.

Even under those circumstances, doctors said on Wednesday, the pace of the congresswoman's recovery as remarkable.

"Since Gabby arrived we have continued to see daily improvement," Dr. Dong Kim, one of her neurosurgeons, told a news conference. He described her progress as proceeding with "lightning speed."

With the stent now removed, her transition into the TIRR went smoothly, according to Dr. John Holcomb, a trauma surgeon at Memorial Hermann-Texas Medical Center, the nearby complex where Giffords was in intensive care.

"It couldn't have been better," he told reporters.

By Wednesday afternoon, she was undergoing her first full round of rehabilitation, including physical, speech and occupational therapy. The sessions last as long as the patient can tolerate, said Dr. Gerard Francisco, chief medical officer for TIRR.

"We've already increased the amount of her therapy because her tolerance has improved in the last few days," he said.

For the time being, her therapy will focus on conditioning, balance, strengthening and maintaining range of motion with activities such as sitting and standing up.

Giffords, 40, suffered a gunshot wound to the head at close range on January 8 when a gunman opened fire outside a Tucson supermarket where she was meeting with constituents. Doctors have described her progress so far as akin to a miracle.

Jared Lee Loughner, a 22-year-old college dropout, is charged with the shooting. Six bystanders including a federal judge and a 9-year-old girl were killed in the incident, and 13 others were wounded, Giffords among them.

Giffords has not spoken since the shooting. The presence of a breathing tube that first ran down her throat, and was later attached through a hole in her neck to her windpipe, has prevented her voicebox from functioning.

Dr. Imoigele Aisiku, director of neurocritical care at Memorial Hermann-Texas Medical Center, said doctors would soon fit her breathing tube with a valve designed to let tracheostomy patients speak. But he was vague about whether she possessed the neurological capacity for speech.

Her vision has not yet been tested and she still shows some muscle weakness. While upbeat about her condition overall, her medical team remained vague on details, such as how long Giffords is sitting up at a time or whether her communication seems purposeful.

"I've seen her be interactive, appropriate with her family and the staff round her," Kim said. "She's just making great progress."

(Editing by Steve Gorman and Peter Bohan)

SAN FRANCISCO (Reuters) – A majority of Californians back Governor Jerry Brown's plan to ask them to extend tax increases to help close a $25.4 billion state budget gap, poll results released on Wednesday showed.

Brown, a Democrat sworn in to a third term earlier this month as leader of America's most populous state, wants lawmakers to help him put a measure to voters in June that would propose extending tax increases that expire this year to raise money for California's cash-strapped government.

Revenue from tax extensions, $12.5 billion in spending cuts and other moves would balance the state's books under Brown's budget proposal.

Revenue from tax extensions would also go to bolster the state government's finances in future years.

California's government, like many other state governments across the nation, is struggling to balance its books in the face of weak revenue caused by the worst recession since the Great Depression.

The survey by the Public Policy Institute of California found two-thirds of Californians in favor of a special election on Brown's tax measure and 58 percent saying they were generally satisfied with his overall budget plan.

"Brown's proposed special election on a tax and fee package to prevent further budget cuts is a good idea, according to 67 percent of adults," the survey report said. "Among likely voters, 66 percent say a special election is a good idea."

That is much stronger than the 50 percent who thought a special election in 2009 championed by previous Governor Arnold Schwarzenegger and lawmakers was a good idea. The state's leaders had hoped voters that year would approve a slate of budget-related measures, including a measure for an extension of tax increases. Voters did not.

"The voters in this case see the need to go to the ballot and they also, I think, are weighing the consequences very carefully," said Mark Baldassare, chief executive of the California Public Policy Institute.

The institute's survey report said 53 percent of adults and 54 percent of likely voters "favor the general plan they would be voting on, which would extend tax and fee increases and divert some revenues from state to local governments."

The institute conducted its telephone survey from January 11 through January 18, contacting 2,004 adult residents of California.

Interviews were conducted in English and Spanish. The survey's sampling error was plus or minus 3.5 percentage points for all adults, plus or minus 3.7 points for registered voters and plus or minus 4.2 points for likely voters.

(Reporting by Jim Christie; Editing by Peter Cooney)