Only George Soros Gave More
According to the SEC, FTX customer funds were diverted to Alameda to the extent that there was “no meaningful distinction.” Sam Bankman-Fried (SBF) then used these “commingled FTX customers’ funds” to make “large political donations.”
Stolen Money Fuels Politics
Put simply, reports Kimberley Strassel in the WSJ, SBF stands accused of using stolen money to fuel politics. And there’s nothing meager about the donations.
According to OpenSecrets, SBF came in as the sixth-largest donor overall in this midterm cycle, and the second-largest donor to Democrats. Only George Soros gave more. SBF dumped close to $40 million into political-action committees, outside groups and individuals.
The complaint suggests that donations were made at the expense of thousands of FTX customers—including smaller investors—who are now at risk of not getting their money back. The SEC says that among other things it wants a “disgorgement” of SBF’s “ill-gotten gains.”
The natural follow-on question: When will political outfits return their ill-gotten donations to aid in compensation?
Some of the money, reports Ms. Strassel, “is gone forever.”
Happily, Washington Obsessed with Russian Election Meddling
Some $28 million of SBF’s political spending went into Bankman-Fried’s hybrid committee, the Protect Our Future PAC, which played in Democratic primaries. KS then wonders, “how different the political landscape might look now if these funds hadn’t been tipping the scales in races.”
SBF gave money to 50 Democratic House and Senate candidates and eight Republicans, and several have already announced they’ll direct their donations to charity. But dumping cash into a lefty charity hardly helps to make FTX customers whole.
SBF donated $6 million to the House Majority PAC, an outside group affiliated with Speaker Nancy Pelosi. That was one of the largest donations this cycle to that entity—which, according its most recent federal disclosure report, has $490,000 in cash on hand.
Republicans Also Got the Loot
While SBF’s declared donations are primarily to Democrats, Mr. Salame turned up this cycle as a GOP megadonor. Much of his money (at least $13 million) also went into his own vehicle—American Dream Federal Action—which engaged in GOP primaries. Again, that’s gone.
There’s also $2 million to the GOP’s Congressional Leadership Fund, $2.5 million to its Senate Leadership Fund, and additional money to GOP candidates, state parties and outside groups. SBF recently suggested he made his own sizable, undeclared donations to Republican-affiliated groups.
What About Political Liability
Remarkably, remarks Ms. Strassel, “top political outfits are stonewalling.”
Washington already has egg on its face, given revelations about FTX lobbying on potential crypto regulation.
Who Will Make It Right
Political outfits can fairly claim they didn’t know about FTX indiscretions when they accepted the donations (even if there may be a lesson here in the wisdom of banking sums from overnight billionaires).
Still, they know now.
Time to explain how they plan to make it right.
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