Sam Bankman-Fried, Founder and Chief Executive Officer of FTX Cryptocurrency Derivatives Exchange, during an interview for an episode of Bloomberg Wealth with David Rubenstein in New York, United States, on Wednesday, August 17, 2022.
jeenah moon | Bloomberg | Getty Images
An ethics watchdog group has asked the Federal Election Commission to investigate former FTX CEO Sam Bankman-Fried for alleged “grave violations” of voting rights, citing his admitted “dark” money contributions to Republican-aligned groups during the 2022 primary season .
The complaint from Citizens for Responsibility and Ethics in Washington cites an interview by Bankman-Fried last month in which the group alleges he has donated as much as $37 million or more to GOP-related campaign efforts to end the to avoid legally required public disclosure of these contributions.
The lawsuit comes nearly a month after cryptocurrency exchange FTX, valued at $32 billion by retail investors earlier this year, filed for bankruptcy protection and Bankman-Fried, 30, resigned as CEO.
The Securities and Exchange Commission and the Justice Department are reportedly investigating him and the shocking collapse of FTX and related crypto companies.
CREW’s complaint said Bankman-Fried admitted, in his own words, that he intentionally structured his donations to GOP-affiliated groups to circumvent public reporting requirements by challenging a Supreme Court decision in the case Citizens United ‘exploited’ against FEC, which allowed unions and companies to spend independently to advertise themselves.
“However, the case did not allow organizations to act as passers-through for contributions from others or to make independent expenditures while keeping their own contributors secret,” CREW’s complaint adds.
A spokesman for Bankman-Fried initially declined to comment on CREW’s complaint. The FEC did not immediately respond to a request for comment.
Anyone can file a complaint with the FEC if they suspect a violation of federal campaign laws. If the FEC finds that a breach has occurred, the possible outcomes “can range from a letter reiterating compliance obligations to an arbitration agreement, which may include a fine,” according to the commission’s website.
CREW’s complaint notes that Bankman-Fried “was a cryptocurrency billionaire until recently and
well-known top Democrat aide,” who “admitted during a recent public interview that he was ‘dark’
Cash donations to support Republicans in federal elections over the past cycle.”
In that interview, he implied that these donations would make him one of the largest contributors to Republicans in the United States.
The complaint includes a link to Bankman-Fried’s Nov. 16 interview with Tiffany Fong, who posted the discussion on her YouTube channel.
“I donated to both parties. I donated about the same amount to both parties this year,” he said in that interview.
“It wasn’t common knowledge, because despite [the Supreme Court decision known as] Citizens United is literally the most prominent Supreme Court case of the decade and what everyone is talking about when they talk about campaign finance. For some reason, in practice, no one could fathom the idea that someone actually gave darkness in practice,” he added.
“All of my Republican donations were obscure,” Bankman-Fried continued, the complaint reads. “The reason wasn’t the regulatory reason.”
“It’s because reporters freak out when you donate to a Republican because they’re all super liberal. And I didn’t want that fight,” he said. “So I turned all Republicans dark. But whatever [indiscernible] also the second or third largest Republican donor this year.”
In the interview, Bankman-Fried said these posts were “all for elementary school.”
“I didn’t give anything to the general election because I don’t care about the general election,” he said. “It’s all that matters. It’s the primaries, for example, where the good candidates compete against the bad candidates.”
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Campaign finance tracking website OpenSecrets has reported that Bankman-Fried gave nearly $40 million in federal contributions during the 2022 election cycle, the vast majority of which went to “Democrat-aligned outside groups,” CREW’s complaint said.
OpenSecrets, citing public FEC records, has reported that he has donated nearly $922,000 to Democratic candidates.
In contrast, Bankman-Fried gave only $240,200 to Republican-aligned outside groups and $80,200 to GOP candidates in the same election cycle, according to OpenSecrets data cited in the complaint.
“Mr. Bankman-Fried took his word for it and was therefore able to channel approximately $37 million and possibly much more to influence federal elections while circumventing federal laws requiring disclosure of the true source of contributions,” the statement said Complaint.
In addition to Bankman-Fried, the complaint lists as defendants unknown individuals or entities allegedly involved in “Bankman-Fried’s scheme to conceal reportable contributions to influence federal elections.”
CREW found that federal law prohibits the use of intermediaries who are misidentified as the source of campaign contributions rather than the actual source of funds.
In a statement, CREW General Counsel Donald Sherman said, “Bankman-Fried said the soft part out loud.”
“He admitted that he violated federal laws designed to ensure Americans have transparency about this election funding and must now be held accountable,” Sherman said.
CNBC reported Tuesday that FTX’s then-CTO Nishad Singh has donated more than $13 million to Democratic Party causes since the start of the 2020 presidential election cycle, of which $8 million has been donated to federal campaigns in the 2022 cycle .
Singh, who left FTX when it collapsed, was the 34th largest contributor to any federal campaign during the last election.
OpenSecrets data shows that Ryan Salame, who was co-CEO of FTX Digital Markets, donated $23 million during the 2022 mid-term cycle, all of which went to Republican groups or candidates, the CNBC article said.