WASHINGTON, D.C. — A writer’s workshop in Alaska. Food banks in California. A charity that fights 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.
Before his arrest in the Bahamas, Bankman-Fried, the former CEO of cryptocurrency exchange FTX, was a 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 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 recipients of Bankman-Fried’s cash were quick to respond, stressing that they had already donated or plan to send the money to charity. Several also stressed that the lawmakers did not solicit the contributions from Bankman-Fried.
Recipients of Bankman-Fried’s campaign largesse included lawmakers at the most senior levels of House and Senate Democratic leadership. Rep. Hakeem Jeffries, D-N.Y., the leader of House Democrats, donated the contribution to the American Diabetes Association. Rep. Pete Aguilar, D-Calif., the third-ranking House Democrat, donated his contributions from Bankman-Fried to local charities last month.
In the Senate, Majority Whip Dick Durbin of Illinois, the No. 2 Democrat in the chamber, will donate his contribution to an “appropriate charity,” a spokeswoman said. Sen. Patty Murray, D-Wash., who will be third in line to the presidency next year, will donate her cash to a local Washington state charity.
Sen. Tina Smith, D-Minn., donated Bankman-Fried’s contributions to Planned Parenthood North Central States. Sen. Alex Padilla, D-Calif., sent his cash to food banks across California. Sen. Lisa Murkowski, R-Alaska, donated her contribution to Storyknife Writers Retreat in 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. In her Democratic primary, Salinas defeated a rival backed by millions of spending 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., Josh Harder, D-Calif., Kim Schrier, D-Wash., and Ritchie Torres, D-N.Y., all donated their Bankman-Fried donations to various charities or plan to, according to their aides.
The main campaign committees dedicated to electing congressional Democrats also received tens of thousands from Bankman-Fried, while House Majority PAC, a deep-pocketed outside group backing House Democrats, got a $6 million contribution, according to FEC records. The Democratic Congressional Campaign Committee and the Democratic Senatorial Campaign Committee did not return requests for comment on what the groups planned to do with Bankman-Fried’s contributions. The House Majority PAC declined to comment.
The White House has also been mum on the multimillion-dollar boost his presidential bid received. Press secretary Karine Jean-Pierre referred inquiries to the Democratic National Committee, which declined to comment.
Then there were the millions given to more obscure political action committees: The Protect Our Future PAC, financed by Bankman-Fried, spent up to $2 million in ads in support of Lucy McBath, who ran a successful campaign in Georgia’s 7th Congressional District against incumbent Rep. Carolyn Bordeaux. Bankman-Fried wired at least $27 million to the PAC in 2022, according to the FEC website.
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. Lawmakers who gave donations from company officials to charity could still find themselves on the hook to return the money they received — or face the perilous optics of stiffing constituents who lost investments when the company melted down.
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, alleging he intentionally deceived customers and investors to enrich himself and others while playing a central role in the company’s multibillion-dollar collapse.
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.
The SEC says Bankman-Fried then used those customer funds to make undisclosed venture investments, lavish real estate purchases and large political donations. He contributed funds to both political parties, Bankman-Fried said in an interview last month, adding that “all my Republican donations were dark,” meaning undisclosed.
“The situation with FTX is both distressing and unsettling,” said Rep. Valerie Foushee, D-N.C. She said she donated her contribution to a nonprofit in Chapel Hill.
