UPDATES: FTX's dirty money
Former FTX CEO Sam Bankman-Fried was arrested in the Bahamas on Monday after being charged with multiple crimes by the Department of Justice. The Securities and Exchange Commission (SEC) also issued civil charges against Bankman-Fried, accusing him of defrauding investors.
The charging documents filed by federal authorities allege that the tens of millions Bankman-Fried donated to political campaigns and committees over the last few years was a central component of Bankman-Fried's crimes and misconduct.
In its civil complaint, the SEC alleges that Bankman-Fried used misappropriated customer deposits to make large political donations:
[Bankman-Fried] told the public, including investors, that FTX was both innovative and responsible. Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform. But from the start, Bankman-Fried improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC (“Alameda”), and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations.
The criminal indictment charges Bankman-Fried "with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, [and] conspiracy to commit money laundering." The indictment also accuses Bankman-Fried of "conspiracy to defraud the Federal Election Commission and commit campaign finance violations."
Among other things, the campaign finance charges allege Bankman-Fried made "corporate contributions to candidates and committees… that were reported in the name of another person." This practice is known as using a "straw donor" to evade campaign finance laws and restrictions.
"All of this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington," U.S. attorney Damian Williams, one of the prosecutors, said during a press conference. Bankman-Fried and another FTX executive, Ryan Salame, received large loans from FTX and subsequently donated millions to federal candidates. Brett Kappel, a campaign finance attorney, called it "the largest corporate conduit contribution case in US history."
After FTX declared bankruptcy in November, Popular Information contacted 98 individual campaigns and 24 PACs that received money from Bankman-Fried or Salame. At the time, seven members of Congress — four Democrats and three Republicans — indicated that they are donating the cash from FTX to charity or back to FTX's customers.
Before his fall from grace, Bankman-Fried sought recognition as a major Democratic donor, at one point pledging to donate as much as $1 billion to help Democratic candidates. Since then, Bankman-Fried indicated that he gave millions more in "dark money" to Republicans. It is impossible to verify Bankman-Fried's claim about dark money donations unless the recipients of the money voluntarily step forward.
In light of the criminal and civil charges against Bankman-Fried, Popular Information reached out to the candidates and committees that did not respond in November.
26 politicians and two PACs pledge to donate or return money from FTX execs
1. Representative Josh Harder (D-CA) received $2,900 from Bankman-Fried. A spokesperson for Harder told Popular Information that he plans to donate the funds to the Stockton Food Bank.
2. Senator Tina Smith (D-MN) received $5,800 from Bankman-Fried. Her campaign said she “has already donated the campaign contributions from Mr. Bankman-Fried to Planned Parenthood North Central States.”
3. Senator Lisa Murkowski (R-AK) received $5,800 from Bankman-Fried and $2,900 from Salame. Her campaign said that both donations were given to “Storyknife Writers Retreat in Homer, Alaska.”
4. Senator Joe Manchin (D-WV) received $5,800 from Bankman-Fried. Sam Runyon, a spokesperson for Manchin, told Popular Information that Manchin donated the money to Mountaineer Food Bank in West Virginia, and that he “hopes this donation can provide some relief to those who need it most.”
5. Senator John Boozman (R-AR) received $5,800 from Bankman-Fried. His campaign said he has “donated those funds to charity.”
6. Senator-elect Peter Welch (D-VT) received $2,900 from Bankman-Fried. In a statement to Popular Information Welch said, “On November 16th, after serious public allegations against Sam Bankman-Fried, I donated the $2,900 contribution my campaign received from Mr. Bankman-Fried to the Warmth Support Program to help Vermonters keep their homes warm this winter.”
7. Representative-elect Morgan McGarvey (D-KY) received $2,900 from Bankman-Fried. McGarvey’s campaign told Popular Information, “We have donated that amount of money to Family Scholar House, a nonprofit in Louisville that provides a range of services, including financial education for disadvantaged single parents and their children in Louisville.”
8. Representative-elect Valerie Foushee (D-NC) received $2,900 from Bankman-Fried. Foushee told Popular Information in a statement, “The situation with FTX is both distressing and unsettling. When I accepted a $2,900 donation from Mr. Bankman-Fried, I was unaware of his illegitimate business dealings. In light of recent developments, I cannot, in good conscience, retain his donation to my campaign, and have since donated these funds to a nonprofit in Chapel Hill, EMPOWERment Inc., whose mission is to serve the community through their steadfast work to provide affordable housing and foster economic development. I sincerely hope that anyone who may have been wronged in this situation will be made right."
9. Senator Bill Cassidy (R-LA) received $5,800 from Bankman-Fried. He pledged to donate the amount to “an appropriate cause.”
10. Representative Ritchie Torres (D-NY) received $2,900 from Bankman-Fried. Torres donated the amount to “a local charity to assist with holiday food distributions to families in need.”
11. Representative Hakeem Jeffries (D-NY) received $5,800 from Bankman-Fried. Jeffries donated the amount to the American Diabetes Association.
12. Representative Josh Gottheimer (D-NJ) received $5,800 from Bankman-Fried. A spokesperson for Gottheimer said he is donating the amount to charity.
13. Senator Cory Booker (D-NJ) received $5,700 from Bankman-Fried. Booker’s campaign told Popular Information that he “donated the $5,700 contribution from [Bankman-Fried] to a New Jersey-based charity.”
14. Representative Dave Joyce (R-OH) received $2,900 from Salame. Joyce’s office told Popular Information that he plans to donate the money to the Greater Cleveland Food Bank.
15. The American Patriots PAC, a group “dedicated to electing conservative heroic veterans,” received $150,000 from FTX. The group told Popular Information that the donation has been returned.
16. Senator Debbie Stabenow (D-MI) received $20,800 from Bankman-Fried. According to Bloomberg, Stabenow plans to “donate the money to a charity in her state.”
17. Representative-elect Becca Balint (D-VT) received $2,900 from Bankman-Fried. According to the VTDigger, Balint plans to donate the funds to “the Vermont-based Committee on Temporary Shelter.”
18. Senator Susan Collins (R-ME) received $2,900 from Bankman-Fried. The Wall Street Journal reported that a representative for Collins said that the funds would be donated to charity.
19. Beto O’Rourke, the former Democratic candidate for governor of Texas, received $1 million from Bankman-Fried. According to Bloomberg, O’Rourke had already returned the donation to Bankman-Fried before FTX announced its bankruptcy.
20. Representative-elect Robert Garcia (D-CA) received $2,900 from Bankman-Fried. His campaign said he donated the funds to “a local non-profit that provides free immigration legal services.”
21. Representative Jim Costa (D-CA) received $2,900 from Bankman-Fried. In a statement to Popular Information Costa said, “The focus on crypto currency has for several years been a concern of many, including myself. Frankly, I am doubtful of the need for crypto currency and believe that if there is continued use it has to have a strong regulatory framework for protections against the abuses we have witnessed with FTX. During my most recent campaign I received unsolicited contributions from the company’s principal Samuel Bankman-Fried. It is my intention to return or donate all the funds received. I will hold the funds in a separate account while we await guidance from legal counsel before proceeding.”
22. The Democratic Senatorial Campaign Committee (DSCC) received $103,000 from Bankman-Fried. A DSCC aide gave Popular Information the following statement: “The DSCC is setting aside funds in order to return the $103,000 in contributions associated with Bankman Fried. We will return it as soon as we receive proper direction in the legal proceedings."
Popular Information previously reported that Representatives Kevin Hern (R-OK), Chuy Garcia (D-IL), and Salud Carbajal (D-CA) donated campaign contributions received from FTX executives. Senator John Hoeven (R-ND), who received $5,800 from Bankman-Fried, also pledged to “give the contribution to whatever reimbursement fund is set up by the bankruptcy court.” Representative David Schweikert (R-AZ) and Senators Dick Durbin (D-IL) and Kirsten Gillibrand (D-NY) also told the Daily Beast they would be donating the funds received from FTX executives.
Largest recipients of FTX cash stay quiet
Many candidates and PACs that received donations from FTX executives did not return requests for comment. This includes some of the top recipients of donations, including the House Majority PAC, which received $6 million from Bankman-Fried; Mitch McConnell’s Super PAC, the Senate Leadership Fund, which received $1 million from FTX and $2.5 million from Salame; the Democratic National Committee, which received $865,000 from Bankman-Fried; the NRCC, which received $184,800 from FTX executives; and the DCCC, which received $156,400 from FTX executives.
Other major recipients that did not respond to requests for comment include Senator Maggie Hassan (D-NH) ($20,600), Representative Alex Mooney (R-WV) ($11,600), and Representative Ronny Jackson (R-TX) ($10,000). The campaign for Jake Auchincloss (D-MA) ($5,800) declined to comment on the record.
This article has been updated to include comments from Representative-elect Robert Garcia, Representative Jim Costa, and the DSCC.
So appreciate this short, sweet and to-the-point researching and reporting.
Goes down well.
This has been exposed and covered extensively by mainstream media ONLY because of bankruptcy and some influential VCs and lots of retail investors lost monies buying product promoted by stars and on business programs like CNBC Squawkbox. Yet, there are 1000s of Co's legally buying politicians and apparently Supreme Ct justices and their wives everyday to get the legislation and court rulings they desire without a peep of coverage from mainstream media as it's the norm. Does anyone see the big picture? Our system is broken and corrupt!!!
What is happening here?!?!?
Beyond the lack of journalist / media doing good investigative and objective reporting like Judd, this is the other big reason our democracy is in decline (and the 3rd being citizens lack of basic understanding in civics).