Democratic lawmakers and organizations face growing calls to return tens of millions in funds received from FTX founder and ex-CEO Sam Bankman-Fried along with his bankrupt cryptocurrency brokerage.
In under 18 months, Bankman-Fried and his partners funneled over $70 million into elections, largely but not completely benefiting Democrats. The Center for Responsive Politics reports that the ex-CEO personally donated $40 million to politicians and political action committees.
The Wall Street Journal reports another FTX executive, Ryan Salame, funded over $23 million into Republicans and their allies.
The 30-year-old Bankman-Fried ranked second only to billionaire George Soros in his generosity to the Democratic cause. But the empire he built in a very short time is no more as it collapsed during the week of midterm elections.
Fortunes were lost overnight, and the word from the new CEO and liquidator is that it does not look encouraging that customers will get much if any of their funds returned.
Sam Bankman-Fried, co-CEO Ryan Salame and Director of Engineering Nishad Singh poured $70.1 million into the 2022 midterm election, making FTX the third largest contributor in the entire political giving landscape. https://t.co/mimAz9VFkE
— OpenSecrets.org (@OpenSecretsDC) November 20, 2022
John Ray III said last week that he had never seen this extent of “complete failure of corporate controls and such a complete absence of trustworthy financial information.” It is noteworthy that Ray oversaw the Enron disaster.
Some lawmakers are on record saying that they are donating the funds received from Bankman-Fried. Under the bankruptcy code and state laws, those who do not voluntarily relinquish the funds may be forced to do so.
A pair of Illinois Democrats, Sen. Dick Durbin and Rep. Chuy Garcia told The Daily Beast that they are donating the funds to charity.
Sen. Kirsten Gillibrand (D-NY) declared she is sending the money to a nonprofit. She described it as a group that promotes “individual wealth and economic development in low-to-moderate income communities.”
Rep. David Schweikert (R-AZ) said he planned to divest the funds, explaining that is the case “if the person who made an individual contribution engaged in bad acts.”
This begs the question: What about FTX investors and customers to whom that money seemingly should legitimately be returned to? If bad actors donate funds to politicians and affiliated groups, do those groups get to decide where to send that money to so they may wash their hands of it?