Let me tell you a brutal story. After Oregon was given a 6th congressional district, local Democrats— and the Congressional Hispanic Caucus— got behind a well-qualified state legislator, Andrea Salinas. The normal thing for the DCCC and Pelosi’s SuperPAC to have done would be to either stay neutral in the primary or support Salinas. But something very strange happened. After Sam Bankman-Fried contributed around $12 million to the campaign a random person he is rumored to have in his pocket, some guy named Carrick Flynn, he directed Pelosi to spend a million dollars on Flynn. She did. Eventually Salinas won the primary by a wide margin but all that money spent against her in the primary made it harder for her to beat Republican Mike Erickson in the general. She did but by just two-and-a-half points in a district with a D+7 partisan lean. Pelosi has never publicly addressed why she spent a million dollars supporting Flynn— and she never will.
Sam Bankman-Greed and his crypto-cronies looted over a billion dollars— perhaps way over a billion dollars— from FTX clients and investors. A great deal of that money went into bribing eager politicians— from both corrupt political parties. 8 of those bribes were for over $2 million each:
Protect Our Future PAC (Bankman-Freed’s personal top vehicle for bribing politicians)- $28 million
American Dream Federal Action (FTX’s vehicle for bribing right-wing Republicans)- $15 million
Pelosi’s House Majority PAC- $6 million
GMI PAC (a crypto-industry vehicle for buying politicians)- $4,051,947
Schumer’s Senate Majority PAC- $3 million
McCarthy’s Congressional Leadership Fund- $2,750,000
McConnell’s Senate Leadership Fund- $2,500,000
EMILY’s List- $2,250,000
What about direct bribes right to politicians, not through organizations or via independent expenditures? Most of them are candidates who have promised to follow Bankman-Greed’s lead in all things crypto. There are dozens and dozens of them; these are just the ones who took more than $5,000 directly:
John Boozman (R-AR)- $23,200
John Hoeven (R-ND)- $23,200
Debbie Stabneow (D-MI)- $23,200
George Santos (R-NY)- $17,400
Carrick Flynn (D-OR)- $13,862 (above the $12 million)
Josh Gottheimer (Blue Dog-NJ)- $11,600
Glenn Thompson (R-PA)- $11,600
Tom Emmer, NRCC chair (R-MN)- $11,600
John Thune (R-SD)- $9,200
Joni Ernst (R-IA)- $8,700
Angie Craig (New Dem- $8,700)
Kirsten Gillibrand (D-NY) $8,700
Jake Auchincloss (D-MA)- $6,800
Sean Patrick Maloney, DCCC Chair (New Dem-NY)- $6,800
Carl Marlinga (D-MI)- $6,800
Katie Britt (R-AL)- $6,000
Bill Cassidy (R-LA)- $5,800
Francis Conole (D-NY)- $5,800
Andrew Garbarino (R-NY)- $5,800
Joe Manchin (D-WV)- $5,800
Erin Houchin (R-IN)- $5,800
Susan Collins (R-ME)- $5,800
Lee Zeldin (R-NY)- $5,800
Hakeem Jeffries (D-NY)- $5,800
Karoline Leavitt (R-NH)- $5,800
Patty Murray (D-WA)- $5,800
Ben Sasse (R-NE)- $5,800
Maggie Hassan (D-NH)- $5,800
Ruben Gallego (D-AZ)- $5,800
Alex Padilla (D-CA)- $5,800
Blake Masters (R-AZ)- $5,800
Jeremy Shaffer (R-PA)- $5,800
Lisa Murkowski (R-AK)- $5,800
Tina Smith (D-MN)- $5,800
Mitt Romney (R-UT)- $5,800
Pete Aguilar (New Dem-CA)- $5,800
Brendan Boyle (New Dem-PA)- $5,800
Cory Booker (D-NJ)- $5,700
Remember, this is separate from million dollar independent expenditures Bankman-Greed did in primaries against progressives-- at the the behest of Hakeem Jeffries-- through SB-F's criminal enterprise, Protect Our Future PAC, for crooked politicians who will be in Congress next year, like
Shontel Brown (New Dem-OH)
Maxwell Frost (D-FL)
Robert Garcia (D-CA)
Valerie Foushee (D-NC)
Jasmine Crockett (D-TX)
Morgan McGarvey (D-KY)
So how does that bribery work? In the case of Maxwell Frost, he started a crypto-friendly advisory board that included Bankman-Greed puppet Ritchie Torres. On Thursday, David Dayen exposed the grotesquely corrupt Blockchain Eight, led by NRCC chairman Tom Emmer, who were taking money from FTX while pressuring the SEC to stop trying to regulate the crypto-crooks. In a March letter 4 Republicans and 4 Democrats sent a letter to SEC chairman Gary Gensler warning him away from regulating the crypto-criminals who were paying them off.
Rep. Tom Emmer (R-MN), whom the Republican caucus just elected as majority whip, the number three position in the House GOP leadership, led the letter. In a contemporaneous Twitter thread, Emmer wrote: “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly… voluntary… and are stifling innovation.”
We now know that FTX was one of those firms receiving information requests from the SEC, about the very activities that have brought down the firm. This raises the question of whether Emmer and the other congressmembers were acting on behalf of FTX (which has been credibly accused of snatching customer money to make risky bets) to try to chill an ongoing investigation from an independent regulatory and law enforcement agency.
Some of the “Blockchain Eight,” as the Prospect termed them in March, have benefited from crypto largesse. Five of the eight members received campaign donations from FTX employees, ranging from $2,900 to $11,600. Rep. Ted Budd (R-NC), one of the signatories, received half a million dollars in support from a Super PAC created by FTX co-CEO Ryan Salame.
More consequentially, Emmer was the head of the National Republican Congressional Committee, the campaign arm for House Republicans, this year. The NRCC’s associated super PAC, the Congressional Leadership Fund, received $2.75 million from FTX in the 2022 cycle; $2 million from Salame in late September, and $750,000 from the company’s political action committee.
That money helped House Republicans win the majority in 2022. Though FTX has been portrayed as a Democratic firm, thanks to the high profile of former co-CEO Sam Bankman-Fried, the company sprinkled around campaign donations fairly evenly, with a shade over 50 percent going directly to congressional Republicans and a shade under 50 percent to Democrats this cycle.
…The eight members were Reps. Emmer, Donalds, Auchincloss, Warren Davidson (R-OH), Ted Budd (R-NC), Darren Soto (D-FL), Josh Gottheimer (D-NJ), and Ritchie Torres (D-NY). Budd was elected this year to the U.S. Senate.
I spoke to one outraged Democratic member of Congress who told me flat out that “Gottheimer and Torres are the two most corrupt Democrats in Congress” and that everyone knows Torres was “Bankman-Fried’s point man in the House… Short of these Congressmen putting the money in their pockets, this is as pure a case of corruption as you will ever see. In fact, in Soto’s case, he very well may have put the money in his pocket, since he has a history of using campaign funds to buy his suits.”
Dayen wrote that “[Ted]Budd was the beneficiary of roughly $517,000 in spending from co-CEO Salame’s Super PAC, American Dream Federal Action. But the millions in funds from FTX’s PAC and Salame to the House Republicans’ Congressional Leadership Fund dwarf the spending to individual candidates. As the lead signatory of the letter and the member who said he’d received ‘tips’ from crypto firms that informed that letter, and as the head of House Republicans’ campaign arm, Emmer had the most to gain from a large donation to help the GOP win the majority. ‘We delivered,’ Emmer said after the majority was secured. Salame gave $23.6 million to exclusively Republican candidates and causes in the 2022 cycle, in contrast to Bankman-Fried, whose $40 million went to Democrats. A handful of members, including Reps. Chuy García (D-IL) and Kevin Hern (R-OK), have returned FTX donations, and Sens. Dick Durbin (D-IL) and Kirsten Gillibrand (D-NY) have donated the contributions to charity. None of the Blockchain Eight have yet said what they would do with their own FTX donations.”
The unorthodox letter is analogous to the 1987 “Keating Five” scandal. Then, five senators (including a young Arizona Republican named John McCain) pressured the Federal Home Loan Bank Board (FHLBB) into shutting down an investigation into Lincoln Savings and Loan and its chair Charles Keating Jr. Keating was a donor to all five senators, giving $1.3 million over the years.
…[T]he catastrophe at FTX hasn’t stopped Emmer from continuing to boost crypto. At an event with the crypto trade group the Blockchain Association just last week, Emmer told the assembled crypto honchos, “You are here to stay,” and that nobody should “rush in and put a huge wet blanket of regulation atop this industry just because something didn’t go right.”
In March, the Blockchain Association applauded the bipartisan letter, saying that “champions” like Emmer were making America “a crypto innovation leader.” The Blockchain Association’s director of government affairs, Ron Hammond, was previously the financial services policy lead for Rep. Davidson, one of the letter’s signatories.
In the wake of the collapse, Emmer has intimated that the SEC’s Gensler and FTX were “work[ing] on legal loopholes to obtain a regulatory monopoly.” With such comments, Emmer is playing into conspiracy theories that Gensler had ties to the firm and was operating in its interest.
These claims are far-fetched. One “six degrees of separation” theory involves Gensler working briefly at MIT with the father of Caroline Ellison, Bankman-Fried’s onetime girlfriend and the CEO of Alameda Research. Another notes that Mark Wetjen, a former Commodity Futures Trading Commission member when Gensler was chair in the Obama years, was hired as FTX’s chief lobbyist, and met with Gensler once.
But Gensler and Wetjen didn’t see eye to eye on the CFTC, and FTX was actively trying to get legislation passed to strip Gensler and the SEC’s authority over crypto.
Other Blockchain Eight Republicans have also criticized Gensler. “At this point, it’s hard to believe that @SECgov hasn’t engaged in selective enforcement,” Rep. Davidson wrote on Twitter last week.
Given that FTX was under investigation by the SEC in March, when Davidson and Emmer actively worked in public to shut that investigation down, claiming that it was illegal for the SEC to investigate crypto firms in that manner, their subsequent claims that the SEC wasn’t doing its job are certainly interesting. The SEC was told not to investigate, and is now being told that it investigated selectively.
The House Financial Services Committee has announced hearings during the lame-duck session into the FTX collapse. Emmer, Torres, Gottheimer, Auchincloss, Davidson, and Budd are all members of that committee. Unfortunately, they won’t be the ones forced to answer the questions.
Writing for The Jacobin last week, Liza Featherstone angrily noted that despite having been caught stealing a billion dollars and funneling immense sums from that into the campaigns of crooked politicians, the NY Times is still hosting Bankman-Greed at a “summit” of “groundbreakers” and “influential minds” next week. How is that possible now that he’s probably one foot out of prison— or enforced suicide?
Liberals bought completely into his schtick, which was that he was a proponent of “Effective Altruism” (EA), a philosophy which stresses “earning to give,” the idea being that rather than choose a virtuous job— seeking a cure for cancer, working for a literacy nonprofit, or, I don’t know, organizing to expropriate the owning class— a person could do more good by making as much money as possible in order to give it away wisely, seeking to make well-informed donations that will make the world a better place. For people who want to believe in the better angels of capitalism, this notion was like crack, completely irresistible. Matt Yglesias was one convert, gushing in May over Bankman-Fried’s sincere commitment to EA and to the cause of pandemic prevention. (Yglesias for his part is now dutifully eating crow.) Forbes and the Times and many other publications also gushed credulously about Bankman-Fried’s intentions to give away all his wealth.
The liberal media’s enthusiasm for the boy wonder might have something to do with his politics. While many crypto bros are libertarians, loudly, obnoxiously so, Bankman-Fried called for responsible regulation, even appearing before Congress to do so. He also gave lavishly to Democratic politicians. Spending more than $38 million, he was the sixth biggest individual donor in this month’s midterms, and the second-biggest donor to lean Democratic. His giving patterns seem to have favored keeping Democrats in the House of Representatives, rather than picking a side in any particular intraparty fight; progressive Zoomer Maxwell Frost as well as more conservative Democrats benefitted from the now-former billionaire’s largesse. Bankman-Fried was probably a factor in the Democrats’ many surprising wins.
The liberal media even loved Bankman-Fried’s appearance. The Times called him a “studiously disheveled billionaire,” celebrating his “perpetually rumpled” quality in a particularly TMI headline, “No Pants, His Rules.” (Speaking of TMI, there was also a fair amount about Bankman-Fried’s Ayn Randian polycule, which is so unappealingly sexist and hierarchical that it risks giving perfectly wholesome alternative lifestyles a bad name, and therefore the less said about it the better. His menage seemed to have involved many employees, which in the post #MeToo era is bold but not in an original way.) Bankman-Fried was often praised as “eccentric,” and even after the recent crackup, The Times uncritically quoted a source calling him “frugal,” which is a curious word to describe a person who owns a private jet and a nearly $40 million penthouse.
Also last week, those liberals at the Wall Street Journal published a close-up of Bankman-Fried and his crew, dated Nassau, Bahamas, They Lived Together, Worked Together and Lost Billions Together: Inside Sam Bankman-Fried’s Doomed FTX Empire. “Sam Bankman-Fried’s $32 billion crypto-trading empire,” they wrote, “collapsed in an incandescent bankruptcy last week, prompting irate customers, crypto acolytes and Silicon Valley bigwigs to ask how something that seemed so promising could have imploded so fast. The emerging picture suggests FTX wasn’t simply felled by a rival, or undone by a bad trade or the relentless fall this year in the value of cryptocurrencies. Instead, it had long been a chaotic mess. From its earliest days, the firm was an unruly agglomeration of corporate entities, customer assets and Bankman-Fried himself, according to court papers, company balance sheets shown to bankers and interviews with employees and investors. No one could say exactly what belonged to whom. Prosecutors are now investigating its collapse. Bankman-Fried’s companies had neither accounting nor functioning human-resources departments, according to a filing in federal court by the executive brought in to shepherd FTX through bankruptcy. Corporate money was used to buy real estate, but records weren’t kept. There wasn’t even a roster of employees, to say nothing of the terms of their employment. Bankruptcy filings say one entity’s outstanding loans include at least $1 billion to Mr. Bankman-Fried personally and $543 million to a top lieutenant. The lives of the people who ran FTX and its related companies were similarly blurred. Ten of them lived and worked together in a $30 million penthouse at an upscale resort in the Bahamas. The hours were punishing, and the lines between work and play were hard to discern. Romantic relationships among Mr. Bankman-Fried’s upper echelon were common, as was use of stimulants, according to former employees.”
As we’ve been writing regularly since last April, this is a story of corruption, larceny, drug use, sex and, quite possibly, murder— that the political establishment is working full time to cover up. Let's watch them get away with it and skate.