Lawmakers quickly to release contributions by FTX founders

WASHINGTON (AP) — A writer’s workshop in Alaska. California Food banks A charity that combats diabetes.

Lawmakers who accepted piles of cash from onetime wunderkind Samuel Bankman-Fried now can’t move fast enough to offload their contributions from the disgraced crypto mogul to anywhere else but their own campaign coffers.

Bankman-Fried, who was the former CEO and founder of cryptocurrency exchange FTX in the Bahamas, was arrested this week. prolific political donor to individual candidates — from local campaigns all the way up to President Joe Biden — as well as super PACs that can wield outsized influence in campaigns. But in a matter of days, Bankman-Fried — a proponent of “effective altruism” — became a pariah facing allegations of massive financial fraud and potentially decades in prison.

The Associated Press contacted more than four dozen current and incoming lawmakers who received campaign contributions from Bankman-Fried this election cycle — a group that included members of both political parties and chambers of Congress, but predominantly House Democrats. Many of the people who received Bankman-Fried cash quickly responded, stating that they have already donated the money or are planning to do so. Many also pointed out that Bankman-Fried did not solicit contributions.

Bankman-Fried’s campaign contributions were distributed to lawmakers at the highest ranks of Senate Democratic leadership and the House. Representative Hakeem Jeffries (D-N.Y.), who is the new leader of House Democrats, donated the donation to the American Diabetes Association. Rep. Pete Aguilar of California, who will be third-ranking House Democrat in next year’s House, donated his Bankman Fried contributions to local charities last week.

The Senate Majority Whip Dick Durbin, an Illinois Democrat, is the No. 2 Democrat in the chamber, will donate his contribution to an “appropriate charity,” a spokeswoman said. Patty Murray, D. Wash., who will be third-in-line to the presidency in next year’s election, will donate her cash for a Washington state charity.

Sen. Tina Smith, D-Minn., donated Bankman-Fried’s contributions to Planned Parenthood North Central States. D-Calif. Sen. Alex Padilla donated his cash to food banks throughout California. Sen. Lisa Murkowski from Alaska donated her contribution to Storyknife Writers Retreat at Homer, Alaska.

Democratic Rep. Ruben Gallego of Arizona, who is strongly hinting he’ll challenge Democrat-turned-independent Kyrsten Sinema for the Senate, gave the $5,800 he received from Bankman-Fried to incoming Democratic Rep. Andrea Salinas of Oregon. Salinas won the Democratic primary against a competitor backed by millions from Bankman-Fried.

“Congress must take immediate action to regulate the crypto industry, implement strict oversight standards and shield consumers from schemes like this in the future,” said Rep. Angie Craig, D-Minn., who added she will donate her Bankman-Fried contribution to a bankruptcy fund to compensate FTX customers.

Sens. Cory Booker D.N.J. John Boozman R-Ark. Bill Cassidy R-La. Susan Collins R-Maine, John Hoeven R-N.D. Joe Manchin D.W.Va. Debbie Stabenow D.Mich. Sen.-elect Peter Welch D.Vt. and Reps. Josh Gottheimer D.N.J. Salud Carbajal D.Calif. Joe Neguse D.Colo. Kim Schrier D. Ritchie Torres D. Ritchie Torres D.

According to FEC records, the main campaigns committees that work to elect congressional Democrats received tens to thousands of dollars from Bankman-Fried. House Majority PAC, a well-funded outside group supporting House Democrats, received a $6 million contribution. Officials from HMP and the Democratic Congressional Campaign Committee as well as the Democratic Senatorial Campaign Committee didn’t respond to requests for comment about what the groups were planning to do with Bankman-Fried’s contributions.

The White House also has not commented on the multimillion dollar boost to his presidential bid. Karine Jean-Pierre, press secretary, referred inquiries at the Democratic National Committee. The Democratic National Committee declined to comment.

There were also the millions that were wired to obscure political action groups: Bankman-Fried spent $2 million to advertise for Protect Our Future PAC. This was to support Lucy McBath’s successful campaign in Georgia 7th Congressional District to defeat incumbent Rep. Carolyn Bordeaux. Bankman-Fried wired more than $2 million. $27 million to the PAC in 2022According to the FEC Website,

Bordeaux stated that the issue surrounding Bankman Fried’s campaign spending was more complicated than simply returning individual donations. In some cases, the money may have been used to alter elections.

“The larger issue at play is the super PACs,” Bordeaux said. “That’s not something they can refund. Here is an example of a billionaire using money he stole and diverted into political contributions — it’s an egregious example of the corruption in our political system.”

“This is a good opportunity to reopen the conversation about campaign finance reform,” she said.

Brett Kappel, a longtime campaign finance attorney who has worked for both Republicans and Democrats, said it would be “prudent” for members of Congress who received donations from Bankman Fried or other FTX officials to set the money aside “given the high likelihood the bankruptcy receiver will be seeking their return.”

That’s because, in bankruptcy cases, courts have often sided with those looking to recoup money that they unfairly lost. Lawyers who received donations from company officials for charity may still be liable to return the money or risk stiffening constituents who suffered losses in their investments.

Still, the lawmakers face no liability themselves “unless they knew the contributions were illegal at the time they received them,” Kappel said.

The U.S. government charged 30-year-old Bankman-Fried with a host of financial crimes this week, alleging he intentionally deceived customers and investors to enrich himself and others, while playing a central role in the company’s multibillion-dollar collapse.

Indictment lists conspiracy to defraud the United States as well as violating Federal Election Commission campaign finance laws. At a press conference on Tuesday, U.S. Attorney Damian Williams said Bankman-Fried made “tens of millions of dollars” in illegal campaign donations.

The Securities and Exchange Commission complaint alleges that Bankman-Fried raised more than $1.8 billion from investors since May 2019 by promoting FTX as a safe, responsible platform for trading crypto assets but instead diverted customers’ funds to a privately held crypto hedge fund called Alameda Research LLC without telling them.

According to the SEC, Bankman-Fried used customer funds for undisclosed venture investments and lavish real estate purchases as well as large political donations. Bankman-Fried and he contributed funds to the two political parties. said in an interview last month, adding that “all my Republican donations were dark,” meaning undisclosed.

On the Republican side, Ryan Salame, the co-CEO of FTX Digital Markets, one of FTX’s affiliates, contributed millions to Republicans on behalf of Bankman-Fried, including to Rep. Steve Scalise in Louisiana, Rep. Greg Pence in Indiana and others.

Bankman-Fried also sent campaign money to a number of House Democrats, including Becca Balint (D-Vt.), Nikki Budzinski (D-Ill.), Robert Garcia (D-Calif.), Sydney Kamlager (D-Calif.), Morgan McGarvey (D-Ky.) and Brittany Pettersen(D-Colo.), who all contributed their funds to local charities. Tweeting that he rejects not just corporate PAC cash but also “stolen money,” Rep.-elect Maxwell Frost, D-Fla., said he donated his contribution to the Zebra Coalition, a group that aids LGBT youth.

“The situation with FTX is both distressing and unsettling,” said Rep.-elect Valerie Foushee, D-N.C. She said she donated her contribution to a non-profit in Chapel Hill.

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Reporting by Sara Burnett, Sara Burnett, Zeke Miller and Aamer Madhani (Associated Press), Washington, Phoenix, Jonathan J. Cooper and Sara Burnett (Chicago).