Most of the candidates who received direct campaign donations from FTX co-founder Sam Bankman-Fried — almost all of whom were Democrats — said they intended to donate the money in the wake of the collapse of his cryptocurrency exchange and his arrest earlier this week.
NBC News and CNBC contacted the 59 Democratic and GOP candidates, many of whom won their races, who received individual contributions from Bankman-Fried that were reported to the Federal Elections Commission in 2021 and 2022. Twenty-five said they plan to donate the money to charity, while three others said they intended to return the donation or hold it until federal investigators gave them next steps. Three campaigns could not be reached.
The others did not respond to requests for comment. Bankman-Fried donated millions more to political action committees, state parties and the Democratic National Committee, as well as major congressional campaign arms, an NBC News review of the data shows.
Many Democrats who received individual contributions from the disgraced FTX CEO said they chose to donate the funds to charitable organizations local to their states or districts. Bankman-Fried’s arrest earlier this week came after the collapse of the cryptocurrency exchange he co-founded, FTX, which is now in bankruptcy proceedings. News of the FTX’s fall first prompted questions to lawmakers about Bankman-Fried’s political donations.
Sen. Joe Manchin, D-W.Va., is donating “the $5,800 online campaign contribution” his campaign committee received from Bankman-Fried to a West Virginia food bank “and hopes this donation can provide some relief to those who need it most,” his spokesman Sam Runyon said.
Tina Smith, D-Minn., said soon after FTX’s collapse that she would give away Bankman-Fried’s donation to Planned Parenthood North Central States. She noted, however, that the whole affair raised serious concerns about the crypto industry and the way it potentially preys upon consumers.
“I have long had serious concerns about crypto and the financial risks it presents to retail investors, which is only underscored by what’s happened at FTX,” she said in a statement. “It’s clear we need to think carefully about how crypto is regulated and how we can best protect consumers and the economy.”
Bankman-Fried publicly focused on funneling money to Democrats, but he also gave money to a handful of Republicans.
Republican Sens. Bill Cassidy of Louisiana and John Boozman of Arkansas said they would donate Bankman-Fried’s campaign contributions, though they did not specify the charities they intended to donate the money to.
The individual contributions made by Bankman-Fried in 2021 and 2022 are just a fraction of the overall political spending by the disgraced former crypto executive and those in his orbit. Federal law limits donations from an individual to a single candidate to $2,900 for the general election and an equal amount for the primary.
Bankman-Fried spent more than $39 million in disclosed donations, according to the data. Bankman-Fried donated tens of millions of dollars more, primarily to Democratic causes but also to some Republican causes, the latest campaign finance reports show. Along with the DNC, he gave to party committees like the Democratic Congressional Campaign Committee, the campaign arm for House Democrats, and the National Republican Congressional Committee, the campaign arm for House Republicans.
Bankman-Fried and fellow FTX executives poured at least $70 million on 2022 campaigns, NBC News previously reported.
The aim was to build friendly relationships with candidates on both sides of the aisle and affect policymaking around the crypto industry no matter the outcome of the 2022 election, prosecutors said Tuesday at a news conference where they unveiled an eight-count criminal indictment against the 30-year-old crypto investor.
That indictment included a campaign finance violation charge, with prosecutors alleging that Bankman-Fried “disguised” donations to look as though they were coming from other wealthy donors.
Mark S. Cohen, Bankman-Fried’s attorney, said his client “is reviewing the charges with his legal team and considering all of his legal options.”
A handful of the candidates who received donations from Bankman-Fried appeared to be preparing for the money to be clawed back to compensate alleged victims.
“Clearly this was not Sam Bankman-Fried’s money to give, and for that reason, I plan to return his campaign contributions to the bankruptcy fund that emerges to compensate FTX customers,” Rep. Angie Craig, D-Minn., said.
It remains unclear what enforcement mechanism would require political groups to return donations. Recovering those funds via bankruptcy proceedings, which is the most likely route, could take a long time and depend on applicable state and federal regulations.
Rep. Brad Sherman, D-Calif., said he did not think any of his colleagues broke the law by receiving the money, but they should be prepared to return the money to investors.
“Under bankruptcy law, if somebody steals money and gives it to you, you could be completely innocent, but you got to give it back,” he said.
Donald Sherman, deputy director at Citizens for Responsibility and Ethics in Washington, said candidates’ decision to donate the direct donations is little more than a public relations decision, but he said that they could still be on the hook if the money needed to be returned.
“In terms of the potential legal issues, donating the money doesn’t really do anything,” he said.
Bankman-Fried also poured millions into super PACs that support candidates outside of their campaigns, including the Senate Majority PAC, or SMP, a super PAC supporting Democratic Senate candidates.
He was the primary donor to Protect Our Future super PAC, which was newly founded before the midterms. According to campaign finance records, the group used its funds to back numerous causes and candidates that it said would take a long view of policy and be “champions for pandemic prevention.”
Rep. Carolyn Bourdeaux, D-Ga., said in an interview that “for most members, it’s pocket change” to return or donate the $2,900 contributions. She said Bankman-Fried’s super PAC donations and use of dark money was of greater concern and noted that Protect Our Future super PAC poured $2 million behind her primary opponent, Rep. Lucy McBath.
After redistricting pitted the two sitting congresswomen against each other, Bourdeaux argued those millions bought a month of ads and helped build McBath’s name recognition in the newly created district, ultimately contributing to Bourdeaux’s primary loss.
McBath, who was the second largest beneficiary of the Protect Our Future super PAC and received an individual donation from Bankman-Fried, did not respond to a request for comment.
Carrick Flynn, who ran for a House seat in Oregon as a Democrat and lost, was the largest recipient of Protect Our Future’s funding and also received an individual donation from Bankman-Fried. He could not be reached for comment.
“He didn’t do this out of the goodness of his heart, and we all knew what those donations were for, right?” Bourdeaux said of Bankman-Fried. “It’s not necessarily just because he liked the candidate.”
Bankman-Fried’s company, FTX, had its own political action committee, as well. West Realm Shires Services Inc., known as FTX PAC, donated $1 million to the Senate-GOP aligned Senate Leadership Fund less than two weeks before Election Day and $750,000 to the House-GOP aligned Congressional Leadership Fund in August, according to FEC data. It’s unclear how involved Bankman-Fried was in the PAC’s political spending, however.
The disclosed sums likely don’t capture the full breadth of Bankman-Fried’s political spending.
Bankman-Fried himself said on a podcast last month that he donated “about the same amount to both parties” but that “all my Republican donations were dark,” a reference to donations to groups that don’t need to immediately disclose (or possibly ever disclose) the source of donations.
“The candidates who received money from dark money organizations don’t really have to answer for it,” Sherman said. “That’s among the many reasons why dark money is problematic: It allows the candidate beneficiaries to skate.”
Bourdeaux, who is preparing to leave Congress after losing her race to McBath, said that while Bankman-Fried’s largesse should be sounding alarm bells about how money is poured into elections, there is “zero” conversation about campaign finance reform in the halls of Congress.
“We need to have a very serious discussion about campaign finance reform,” she said. “And I hope this serves as a wakeup call to doing that.”
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