Sam Bankman-Madoff... And The American Political Establishment
On Tuesday, Rolling Stone ran an interview with Bernie in which he discussed the midterms. When Kara Voght asked him about his priorities for the next two years, he brought up the way political corruption has undermined democracy and how so many candidates and the media avoid that discussion. “One of the other factors not talked about, I think, enough is the degree to which billionaire money impacted this election. It’s disgusting. As I mentioned, I was in Pittsburgh with Summer Lee. She had to run against millions of dollars of AIPAC super PAC money coming in the last couple of weeks, and she ended up beating it back. This is a major, major problem.”
This morning at Popular Info, Judd Legum and Rebecca Crosby broke an unfolding story about one of the biggest founts of corruption in the American political system: the cryptocurrency Mafia buying into the political establishment. Now that the crimes are becoming fodder for the media, a few of the recipients of a tiny bit of the millions and millions of dollars spent bribing politicians, is being rejected, returned and donated to charities.
Bankrupt crypto-billionaire Sam Bankman-Fried, a self-professed conservatieve Democrat, was Biden’s second biggest individual contributor in 2020. This year he spent so much money on Democratic candidates ($38,837,000) that when he demanded Nancy Pelosi spend a million dollars on some crackpot candidate he was supporting in Oregon’s new district— against the progressive Democrat, Andrea Salinas— Pelosi hopped right to and wasted a million dollars on a ridiculous campaign that was buried by the primary voters. Eventually the $12 million Bankman-Fried and Pelosi spent against Salinas hurt her in the general and she nearly lost in a blue-leaning district. This week the race was finally called in her favor:
Bankman-Fried was the second biggest Democratic donor this cycle, after George Soros. One of Bankman-Fried’s SuperPACs, Protect Our Future PAC, spent $27,922,040, almost all of it on independent expenditures boosting candidates he felt would back the cryptocurrency regulatory agenda. Coordinating with 3 extremely crooked New York Democrats Hakeem Jeffries, Ritchie Torres and Sean Patrick Maloney, Bankman-Fried spent massively to elect crypto-shills he felt would be easy to control:
Carrick Flynn (OR)- $10,452,673 (lost primary)
Lucy McBath (GA)- $1,919,429 (going back to Congress)
Jasmine Crockett (TX)- $1,444,997 (going to Congress)
Adam Hollier (MI)- $1,056,966 (lost primary)
Valerie Foushee (NC)- $1,040,133 (beat progressive; going to Congress)
Shontel Brown (OH)- $1,010,178 (beat progressive; going back to Congress)
Robert Garcia (CA)- $1,002,730 (beat progressive; going to Congress)
Morgan McGarvey (KY)- $971,552 (beat progressive; going to Congress)
Maxwell Frost (FL)- $963,177 (beat progressive; going to Congress)
Josh Lafazan (NY)- $710,849 (lost primary)
Francis Conole (NY)- $510,184 (beat a progressive in the primary; no further help from SB-F lost general)
Sydney Kamlager (CA)- $500,970 (beat progressive; going to Congress)
Jonathan Jackson (IL)- $500,065 (going to Congress)
Nikki Budzinski (IL)- $263,453 (going to Congress)
Jared Moskowitz (FL)- $262,426 (going to Congress to compete to be the worst member)
Laura Gillen (NY)- $250,662 (beat a progressive in the primary; no further help from SB-F lost general)
Robert Menedndez Jr (NJ)- $250,000 (beat progressive; going to Congress)
Chuy Garcia (IL)- $199,853 (going back to Congress)
So how did SB-F spend all that money? These were his contributions, at least the ones I could find, in 2022:
Heartland Resurgence (Crypto-suck-up John Boozman)- $50,000
Alabama Conservative Fund (Katie Britt)- $105,000
Democratic Majority for Israel- $250,000
Opportunity for Tomorrow (Nikki Budzinski, Jasmine Crockett, Ritchie Torres)- $300,000
Schumer’s Senate Majority PAC- $1,000,000
National Wildlife Federation- $810,000
America United (Henry Cuellar, Tony Cardenas)- $1,300,000
GMI PAC- $2,000,000
Pelosi’s House Majority PAC- $6,000,000
Protect Our Future- $27,000,000
Legum and Crosby report on the criminal financial activities, not on the drugs, sex and murder part of this story. “According to reports, Alameda Research, a trading firm also founded and owned by Bankman-Fried, ‘borrowed’ billions in assets deposited by FTX customers. Those deposits were used to make payments on ‘loans to fund illiquid venture investments’ Today, FTX has few liquid assets. Much of its holdings are comprised of cryptocurrencies created by Bankman-Fried and FTX, which now have little value. Or, as Bloomberg's Matt Levine put it, the ‘customer money is mostly gone and what’s left is mostly worthless beans.’ FTX's fall from grace is an embarrassment for the venture capitalists and celebrities who provided FTX with billions in cash and instant credibility. But it is also a problem for politicians who accepted millions from Bankman-Fried and another FTX executive, Ryan Salame.”
Bankman-Fried spent about $41 million in the 2022 midterm elections, mostly benefiting Democrats. Bankman-Fried donated to 47 individual Democratic candidates, 8 Republican candidates, 16 Democratic PACs, 4 Republican PACs, and 2 non-partisan PACs. Bankman-Fried also spent millions on independent expenditures through his Super PAC, Protect Our Future.
…Salame, the co-CEO of FTX, spent about $23 million in the midterms, and almost all of it went to Republicans. Salame donated to 49 Republican campaigns, 11 Republican PACs, and 1 non-partisan PAC. He also spent about $7 million on independent expenditures through his Super PAC, American Dream Political Action.
The Democratic and Republican politicians who accepted donations from Bankman-Fried and Salame must decide whether to keep the money. The wealth of Bankman-Fried and Salame— the source of their donations— was generated by FTX. And FTX is now under federal criminal investigation for improper use of customer funds.
Popular Information contacted 98 individual campaigns and 24 PACs that received money from Bankman-Fried or Salame. 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.
Senator John Hoeven (R-ND) received $5,800 from Bankman-Fried. A spokesperson for Hoeven told Popular Information that "[g]iven what’s happened with the company, we intend to give the contribution to whatever reimbursement fund is set up by the bankruptcy court." Congressman Kevin Hern (R-OK) received $5,000 from Salame. Hern's spokesperson said the campaign had donated the money to Food on the Move, an Oklahoma charity that addresses food insecurity.
The campaign of Congressman Chuy Garcia (D-IL) said it had donated Bankman-Fried's $2,900 donation to the Northwest Center Chicago, a non-profit that offers classes on financial literacy. Congressman Salud Carbajal (D-CA) told Popular Information that he also plans to donate Bankman-Fried's $5,800 donation, but the specific charity has not been finalized.
Senator Kirsten Gillibrand (D-NY), who introduced legislation regulating the crypto industry that was supported by FTX, received $16,600 from Bankman-Fried. Gillibrand's office told the Daily Beast that it was donating that money "to Ariva, Inc., a Bronx-based nonprofit that aims to promote individual wealth and economic development in low-to-moderate income communities." The Daily Beast also reported that Senator Dick Durbin (D-IL) and Congressman David Schweikert (R-AZ) planned to donate the money they received from FTX executives to charity.
Most candidates and PACs that received funds from Bankman-Fried and Salame did not return requests for comment. This includes the top Republican recipients of funds, the Senate Leadership Fund (Mitch McConnell's Super PAC), which received $2.5 million from Salame, and the top Democratic recipient of funds, the Democratic National Committee, which received $865,000 from Bankman-Fried.
Other major recipients of funds from FTX executives that didn't respond to requests for comment include the NRCC ($184,800), the DCCC ($156,400), the DSCC ($66,500), Senator Maggie Hassan (D-NH) ($20,600), Senator Debbie Stabenow (D-MI) ($20,600), Congressman Alex Mooney (R-WV) ($11,600), and Congressman Ronny Jackson (R-TX) ($10,000).
And, for course, the crooks who illegally coordinated with SB-F’s will never return the money he spent on their campaigns. This is how it worked. After SB-F established his phony-baloney Protect Our Future PAC— with money he had stolen from FTX clients (for which he will be spending much of the rest of his life in prison)-- he called on candidates to audition by proving their fealty to him and crypto. 9 days later Orlando congressional candidate, Maxwell Frost, playing the role of “progressive,” established a crypto-advisory committee that included crypto-shills including the worst of all, Ritchie Torres. SB-F then pledged a million dollars to Frost’s campaign. It didn’t surprise me at all when the Progressive Caucus PAC (led by Mark Pocan) endorsed Frost but it was very disappointing to see both Bernie and Elizabeth Warren back him as well. And they may be denouncing the role of billionaires in politics but… well, you can connect these unfortunate and demoralizing dots for yourself.