Former FTX CEO Sam Bankman-Fried hit with campaign finance complaint over GOP 'dark' money

Former FTX CEO Sam Bankman-Fried hit with campaign finance complaint over GOP ‘dark’ money

Sam Bankman-Fried, Founder and Managing Director of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, U.S., Wednesday August 17, 2022.

Jeena Moon | Bloomberg | Getty Images

An ethics watchdog group has asked the Federal Election Commission to investigate former FTX CEO Sam Bankman-Fried for alleged ‘serious violations’ of election law, citing his acknowledged contributions of money “dark” to Republican-aligned groups in the 2022 primary season.

The Citizens for Responsibility and Ethics complaint in Washington cites an interview from last month by Bankman-Fried, which the group says suggests he donated $37 million or more to GOP-related campaign efforts. a way that avoided the legally required public disclosure of these contributions.

The complaint comes nearly a month after cryptocurrency exchange FTX, which earlier this year was valued at $32 billion by private investors, filed for bankruptcy protection and Bankman-Fried, 30, resigned as CEO.

The Securities and Exchange Commission and Department of Justice are reportedly investigating him and the shocking collapse of FTX and related crypto entities.

CREW’s complaint said Bankman-Fried, in his own words, admits he intentionally structured his donations to GOP-linked groups to evade public reporting requirements by “taking advantage” of a Supreme Court ruling. in Citizens United v FEC, which allowed unions and corporations to make independent expenditures for the campaigns themselves.

“However, the case did not permit the organizations to act as intermediaries for the contributions of others, or to make independent expenditures while keeping their own contributors secret,” the CREW complaint adds.

A spokesperson for Bankman-Fried had no immediate comment on CREW’s complaint.

A spokeswoman for the FEC told CNBC, “We cannot comment on pending or potential complaints before the agency.”

Anyone can file a complaint with the FEC if they suspect a violation of federal campaign laws. If the FEC determines that a violation has occurred, potential outcomes “may range from a letter reiterating compliance obligations to a conciliation agreement, which may include a monetary civil penalty,” according to the commission’s webpage. .

CREW’s complaint notes that Bankman-Fried was, “until recently, a cryptocurrency billionaire and known Democratic contributor,” who “admitted in a recent public interview that he had given contributions to “dark” money to support Republicans in federal elections in the past cycle.”

In this interview, he suggested that these donations would make him one of the biggest donors to Republicans in the United States.

The complaint contains a link to the Nov. 16 interview Bankman-Fried gave to Tiffany Fong, who posted the discussion on her YouTube channel.

“I donated to both parties. I gave roughly the same amount to both parties this year,” he said in that interview.

“It was not known to everyone, because despite [the Supreme Court decision known as] Citizens United being literally the highest profile Supreme Court case of the decade and the thing everyone talks about when they talk about campaign finance, for some reason in practice no one could understand the idea that someone in practice actually gave black,” he added.

“All of my Republican donations were dark,” Bankman-Fried continued, the complaint noted. “The reason was not the regulatory reason.”

“It’s because journalists freak out if you donate to a Republican because they’re all super liberals. And I didn’t want to have that fight,” he said. “So I made all the Republicans gloomy. But, whatever, [indiscernible] the second or third largest Republican donor this year as well.”

In the interview, Bankman-Fried said these contributions were “all for primary.”

“I didn’t give anything in the general election because I don’t care about the general election,” he said. “That’s all that matters. Like, it’s the primaries where good candidates versus bad candidates.”

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Campaign finance tracking site OpenSecrets reported that Bankman-Fried made nearly $40 million in federal contributions during the 2022 election cycle, the vast majority of which went to “outside groups aligned with Democrats.” , according to CREW’s complaint.

OpenSecrets, which cites public FEC records, reported that it paid nearly $922,000 to Democratic candidates.

In contrast, Bankman-Fried gave just $240,200 to Republican-aligned outside groups and $80,200 to GOP candidates during the same election cycle, according to OpenSecrets data cited by the complaint.

“Taking him at his word, Mr. Bankman-Fried was therefore able to direct approximately $37 million, and potentially significantly more, to influence federal elections while circumventing federal laws that require disclosure of the true source of contributions,” indicates the complaint.

In addition to Bankman-Fried, the complaint lists as respondents unknown persons or entities who allegedly participated in Bankman-Fried’s “scheme to hide reportable contributions to influence the federal election.”

CREW noted that federal laws prohibit the use of intermediaries falsely identified as the source of campaign contributions in place of the actual source of the money.

In a statement, CREW General Counsel Donald Sherman said, “Bankman-Fried said the quiet part out loud.”

“He admitted he violated federal laws designed to ensure Americans have transparency in these fundraising elections and must now be held accountable,” Sherman said.

CNBC reported Tuesday that Nishad Singh, then chief engineering officer of FTX, has donated more than $13 million to Democratic Party causes since the start of the 2020 presidential election cycle, including $8 million for federal campaigns in the 2022 cycle.

Singh, who left FTX during its collapse, was the 34th largest contributor to any federal campaign in the last election.

OpenSecrets data shows that Ryan Salame, who had served as co-CEO of FTX Digital Markets, donated $23 million during the 2022 midterm cycle, all of which went to affiliated groups or candidates. to Republicans, the CNBC article notes.

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