Island was intoxicated by antics of former model and her death unwittingly led to government scrutiny, say cables

The confidential cable was written poetically and revealingly. Harnessing all the drama of a Mills and Boon novel, the US ambassador pulled out every stop when describing the impact of a B-list celebrity on the tropical Caribbean paradise of the Bahamas.

"Not since Wallis Simpson dethroned a king and moved to Nassau has an American femme fatale so captivated the Bahamian public and dominated local politics than Anna Nicole Smith did during her time on the island," according to a leaked memo titled "Hurricane Anna Nicole wreaks havoc in the Bahamas".

The "titillating details" of the "sordid affairs" of the Anna Nicole saga "enticed" Bahamians and changed the face of the island's politics, two confidential memos sent by the embassy in Nassau reveal.

But the scandals and chaos that followed in the wake of the former Playboy model and reality TV star also had a positive impact on the island, the memo concedes: revitalising its media and leading to a more democratic society.

The wording of the 2006 memos could hardly be more colourful. "Not since the Category 4 Hurricane Betsy hit the island in 1965," it says, "has one woman done as much damage in Nassau."

Less than a year after the memo was written Smith died from a prescription drug overdose in a squalid Florida hotel room, aged 39. Howard Stern, who was her lawyer as well as her boyfriend, and Khristine Eroshevich, her former psychiatrist, were found guilty of writing or seeking prescriptions using false names to provide Smith with the cocktail of painkillers, muscle relaxants and antidepressants that killed her.

Before then, the ex-wife of an 89-year-old billionaire had caused "havoc" in the Bahamas, the cable excitedly exclaims. In September 2006 the media were highly critical when Smith allegedly provided a $10,000 (£6,477) cheque directly to the immigration minister, Shane Gibson, after her residency application was approved in one month. According to Smith, Gibson had personally approved her application. Critics pointed out that the process typically takes at least a year.

Gibson's claims that Smith had been treated like any other applicant were "shattered" when photos were published after the model's death on 8 February of Smith and Gibson "in a bedroom embrace".

The photographs were published in the island's main newspaper "in the intense media frenzy following Smith's death".

Combined with further evidence that Gibson and his family had financially benefitted from their relationship with Smith, the once-popular minister was forced to resign. "The Anna Nicole scandal has recast Gibson as puppet of the privileged rather than defender of the common people of The Bahamas," one of the two memos notes.

The government immediately promised a review of immigration procedures, but the saga left Gibson's ruling Progressive Liberal party government "lying in disarray in her wake". Gibson and his party were not the only victims of "Hurricane Anna Nicole".

Following her son's death in September 2006 Nassau's highly-regarded Doctors Hospital "came under fire for its treatment – or more pointedly its complete lack of treatment – of Anna Nicole's son"was criticised over his treatment.

But "the criticism of the hospital was nothing compared to the criticism of the Bahamas Coroner's Court", the memo says. The court had been unable or unwilling to provide a cause of death for Smith's son so when a US pathologist found the death had been caused by a toxic cocktail of drugs there was widespread "speculation that the government was protecting Anna Nicole from embarrassment by delaying its findings".

The scandal forced the government to fire the coroner and disband the court. The litany of disasters had a positive side, however. The memo says the scandals "revitalised" local media to take on a system that "too often rewards the privileged".

At the same time, the cable adds, the "titillating details of Anna Nicole's sordid affairs have enticed the Bahamian public to give renewed focus to government indiscretions".

The PLP government "fir[ed] back in self-defence" and promised reform. But it was too late: in May 2007 it lost the election to the Free National Movement party.