Updated: Dec 18, 2022
A couple of days ago a couple of AP reporters wrote that politicians are disgorging the stolen loot they got this year from the now toxic Sam Bankman-Fried. But the politicians are only getting rid of a TINY fraction of the money that SBF used to bribe them. Yesterday I was at a fundraiser for St. Louis progressive Cori Bush. Bankman-Fried didn’t contribute to a nickel to her campaign; he hates two things in politics: progressives and integrity. And those are two of the things that define Cori’s political career. So I didn’t bother to ask her about the AP story— or about Bankman-Fried at all. One congresswoman-elect was at the event too, Sydney Kamlager, and she’s someone who is even mentioned in the AP report as having donated the max donation ($2,900) SBF gave her to a local charity. What the article didn’t mention, however— and this was the flaw in the reporting— is that the Protect Our Future PAC, funded by SBF and operated by his brother Gabe, spent $500,970 in independent expenditures to knock Daniel Lee, Kamlager’s progressive opponent, out of the race. SBF also helped fund the right-of-center Democratic Majority For Israel this year and they spent $231,283 also attacking Daniel Lee. At the same time, Web3 Forward PAC— one of the dark entities SBF used to launder cash into campaigns— spent $441,353 helping Kamlager. It was a polite gathering at a friend's home and I didn’t ask Kamlager about all this SBF largess. (It’s worth noting that Hakeem Jeffries coordinated the SBF cash flow with other groups, like DMFI, against progressives.)
OK, now watch this video— by clicking on the image— of a discussion between Chris Hayes and Bernie on Friday:
Fatima Hussein and Seung Min Kim wrote that they “contacted more than four dozen current and incoming lawmakers who received campaign contributions from Bankman-Fried this election cycle— a group that included members of both political parties and chambers of Congress, but predominantly House Democrats. Many of the recipients of Bankman-Fried’s cash were quick to respond, stressing that they had already donated or plan to send the money to charity. Several also stressed that the lawmakers did not solicit the contributions from Bankman-Fried. Recipients of Bankman-Fried’s campaign largesse included lawmakers at the most senior levels of House and Senate Democratic leadership. Rep. Hakeem Jeffries (D-NY), the incoming leader of House Democrats, donated the contribution to the American Diabetes Association. Rep. Pete Aguilar (D-CA), who will be the third-ranking House Democrat next year, donated his contributions from Bankman-Fried to local charities last month. Perhaps this would have been theme to note that the $6 million that SBF gave the House Majority PAC— which Pelosi ran and which is being takeover by Jeffries— refuses to disgorge a dime of the stolen FTX loot— as do McCarthy’s PAC ($2,750,000) and McConnell’s PAC ($1,500,000). The point is that the really big money wasn’t the $2,900 contributions to various and sundry corrupt members of Congress and candidates for Congress, but the millions of dollars spent on their campaigns “independently.” Getting to the bottom of that would be a Herculean task no journalists have been willing to should yet, since it would immediately make whomever did a serious pariah. I mean, none of these politicians want to wind upon prison with SBF and his cronies.
It’s so much easier to just write puffy nonsense like:
Democratic Rep. Ruben Gallego of Arizona, who is strongly hinting he’ll challenge Democrat-turned-independent Kyrsten Sinema for the Senate, gave the $5,800 he received from Bankman-Fried to incoming Democratic Rep. Andrea Salinas of Oregon. In her Democratic primary, Salinas defeated a rival backed by millions of spending from Bankman-Fried.
“Congress must take immediate action to regulate the crypto industry, implement strict oversight standards and shield consumers from schemes like this in the future,” said Rep. Angie Craig (D-MN), who added she will donate her Bankman-Fried contribution to a bankruptcy fund to compensate FTX customers.
Sens. Cory Booker (D-NJ), John Boozman (R-AR)., Bill Cassidy (R-LA), Susan Collins (R-ME), John Hoeven (R-ND), Joe Manchin, (D-WV), Debbie Stabenow (D-MI), Sen.-elect Peter Welch (D-VT) and Reps. Josh Gottheimer (D-NJ), Salud Carbajal (D-CA), Joe Neguse (D-CO), Josh Harder (D-CA), Kim Schrier (D-WA), Ritchie Torres (D-NY), all donated their Bankman-Fried donations to various charities or plan to, according to their aides.
No mention of the Blockchain-8 and how Torres and Gottheimer worked with crooked Republican Tom Emmer (R-MN) to prevent the SEC from investigating FTX? The closest they came to some real journalism was when they mentioned that Georgia House primary in the suburbs north of Atlanta. “Then,” they wrote, “there were the millions given to more obscure political action committees: The Protect Our Future PAC, financed by Bankman-Fried, spent up to $2 million in ads in support of Lucy McBath, who ran a successful campaign in Georgia’s 7th Congressional District against incumbent Rep. Carolyn Bordeaux. Bankman-Fried wired at least $27 million to the PAC in 2022, according to the FEC website. [His brother ran it at his behest.] In an interview with the Associated Press, Bordeaux said the dilemma surrounding Bankman-Fried’s campaign spending isn’t as simple as returning individual donations. In some cases, the money already has been used to affect elections. ‘The larger issue at play is the super PACs,’ Bordeaux said. ‘That’s not something they can refund. Here is an example of a billionaire using money he stole and diverted into political contributions— it’s an egregious example of the corruption in our political system. This is a good opportunity to reopen the conversation about campaign finance reform,’ she said.”
The AP writers missed the most important point when they quoted. Campaign finance expert saying “the lawmakers face no liability themselves ‘unless they knew the contributions were illegal at the time they received them.’” No, they would face some liability if a quid pro quo can be shown between contributions and corrupt activities, as in the case of the Blockchain-8.
Hopefully the Southern District of New York prosecutors are going to be a lot more thorough that the AP reporters. Last night, NY Times reporters Ken Vogel and Ken Bensinger reported that that office is digging into the political donations aspect of the scandal. Just over half a dozen members of Congress who didn’t take any FTX money, sent me the Times link!
The two reporters wrote that right after Bankman-Fried’s arrest, “the prosecutors reached out to representatives for campaigns and committees that had received millions of dollars from Bankman-Fried, his colleagues and their companies. A law firm representing some of the most important Democratic political organizations— including the party’s official campaign arms, its biggest super PACs and the campaigns of high-profile politicians such as Representative Hakeem Jeffries— received an email from a prosecutor in the United States attorney’s office for the Southern District of New York. The email sought information about donations from Bankman-Fried, his colleagues and companies, according to people familiar with the request, who insisted on anonymity to discuss an ongoing law enforcement matter… Prosecutors are also investigating donations to Republican campaigns and committees by another FTX executive who was a top financier on the right.”
My blood pressure went up last night when I read the two Kens assert that “There has not been any suggestion that political campaigns and groups engaged in wrongdoing related to the donations they received. The Justice Department’s inquiries appear to be an effort to gather evidence against Bankman-Fried and other former FTX executives, rather than against their political beneficiaries.” That sounds like the makings of a coverup to protect the politicians. I hope they’re wrong. They did note that “But the prosecutors’ requests widen what has quickly become one of the biggest campaign finance scandals in years, as both Democrats and Republicans grapple with questions about their eagerness to tap into a stream of cash from a murky and largely unregulated industry that emerged suddenly as a powerful political player. The fallout has been swift and is only growing, as lawmakers, operatives for political action committees and their lawyers try to minimize the damage.”
Prosecutors said FTX was a “house of cards” through which Bankman-Fried and others diverted customer money to buy expensive real estate in the Bahamas, invest in other cryptocurrency firms, provide themselves with personal loans and make political contributions of tens of millions of dollars intended to influence policy decisions on cryptocurrency and other issues.
The indictment of Bankman-Fried accuses him of conspiring with unnamed others to violate campaign finance laws that prohibit corporate donations to candidates’ campaigns and bar donations “in the names of other persons,” commonly known as straw donations. He is also charged with wire fraud, money laundering and securities fraud related to his management of FTX and another company he co-founded, Alameda Research.
At a news conference on Tuesday, Damian Williams, the United States attorney for the Southern District of New York, called on “any person, entity or political campaign that has received stolen customer money” to “work with us to return that money to innocent victims.”
Federal Election Commission regulations require political campaigns and committees to give back donations that are later determined to be illegal, even if the funds have already been spent and new money needs to be raised to pay for the refunds.
…More revelations are expected as previously undisclosed donations linked to Bankman-Fried, FTX and Alameda are exposed. For instance, a Biden-allied nonprofit group called Future Forward USA Action, which is registered under a section of the tax code that does not require it to disclose its donors, received $1.65 million that was linked to FTX, according to a person familiar with the funding.
The group’s PAC arm, which is required to report its donors, previously disclosed that in 2020, it received $5 million from Mr. Bankman-Fried and $1 million from another former FTX executive, Nishad Singh, out of a total of more than $150 million raised ahead of that year’s election.
Critics of the outsize role of big money in politics, as well as skeptics of cryptocurrency, have seized on the donations as further evidence that the campaign finance regulatory landscape is riddled with loopholes that create what is essentially a pay-to-play system with only the veneer of transparency.
“It shows fundamental weakness in our campaign finance laws,” said Craig Holman, an official at the watchdog group Public Citizen who focuses on ethics, lobbying and campaign finance rules. “And on the receiving end, you’ve got candidates and officeholders who should have been suspicious of the sudden influx of funds from the crypto industry.”
The prosecutors are seeking information related to donations to dozens of campaigns and political committees, not just from Bankman-Fried but also from FTX and Alameda, as well as from Singh and Ryan Salame, another former FTX executive, according to the people familiar with the request.
…Salame donated $24 million, primarily to Republican candidates and committees.
Even as a group linked to Salame promoted him as a “budding Republican megadonor” this year, he told an activist who raised money from the cryptocurrency industry that he was not particularly interested in politics and suggested that his donations had been encouraged by others at FTX, the activist said.
…Karl Sandstrom, a former member of the FEC, said the FTX case had the potential to be “the largest corporate conduit case we have had.”
Sandstrom has been telling his clients “to put money in escrow matching the amounts they received from Bankman-Fried.” Here's how the bribery scheme worked in real time. Keep in mind that Emmer was a senior member of the House Financial Services Committee, the head of the NRCC and the head of the Blockchain-8 when this video was shot and has since used FTX illicit funds to help buy himself the GOP whip position for the 118th Congress. He should go to prison:
Several members of Congress contacted me almost immediately about this post. All the responses were pretty similar, but this one was the most detailed and... bipartisan:
First: love the pic with Cori!
Second: Once again, you are absolutely right. Reporters will not take the time or put in effort to actually do a deep dive into 2018-2022 FEC filings to really understand the full depth.
I hope #SDNY DA Damian Williams does.
Everyone of those finance committee members who took money, knew the deal and was bribed. I hope Damian has the ability to uncover all of those folks. The most egregious for me:
Gottheimer because of this close ties, Auchincloss because of his hypocrisy, Maxine (who I love and pains me to say) for looking the other way. Emmer for his clear criminality in every way. Casten for the bribe of hiring Sam Bankman-Fried’s brother and taking $500,000 from what is now basically the illegal Mind the Gap PAC their mother ran, Chuy (so saddened and surprised) to have agreed to work with a PAC he did not need for congressional reelection but to give him an advantage in his run for Chicago mayor.
All of it is so layered and disgusting.
He added that he hopes Damian Williams “sees all of them on the finance committee for who they are.” Yeah... me too. Here's one that definately should be looked into thoroughly, a new senator from Alabama, as corrupt as the old senator she's replacing:
And a 10th comment came in today that I thought I'd share: "What’s not being focused on is what people did to get the money, or try to get the money. Like the letter to the SEC. Or forming a 'Cryptocurrency Advisory Council.' Or meeting with SBF’s brother. People are acting like getting the money was like winning the lottery. That’s not how it happened at all."