Sam Bankman-Fried's donations may have been tens of millions more than we thought

That Sam Bankman-Fried, the founder and former chief executive of the cryptocurrency exchange FTX that recently filed for bankruptcy, was aggressively using campaign donations as part of a campaign to woo Washington toward his vision of cryptocurrency regulation was no secret — nor was it a secret that other FTX executives quickly became some of the country's biggest political donors to both Republicans and Democrats, especially those who work on financial regulation.

But a new federal criminal indictment alleges that things may have been even simpler than they seemed: Bankman-Fried, federal prosecutors allege, was in charge of all of it and was using FTX customer money.

According to figures compiled by Open Secrets, Bankman-Fried was the second-largest Democratic donor of the 2022 campaign cycle, with almost $36 million in donations, largely to Democratic groups and candidates. This put him ahead of megadonors like Peter Thiel or James Simons but behind George Soros or Ken Griffin. Now, the Department of Justice is alleging that his donating spanned even further, using the names of other executives to support more political candidates than he himself did.

The indictment alleges that the donations added up to "tens of millions of dollars" and that they were "unlawful because they were made in the name of a straw donor or paid for with corporate funds." The purpose of these donations was, among others things, to get around individual campaign contribution limits, the indictment alleges.

The prosecutors allege that Bankman-Fried's straw donations came from the accounts of Alameda Research, the hedge fund affiliated with FTX, and "included funds that had been deposited by FTX customers."

"To avoid certain contributions being publicly reported in his name, Bankman-Fried conspired to and did have certain political contributions made in the names of two other FTX executives," which the indictment does not identify. "Those contributions were made directly to candidates in the names of those FTX executives but with FTX and Alameda funds."

Though the two co-conspirators are not identified in the indictment, the details included point to two executives: former FTX Engineering Chief Nishad Singh and co-CEO Ryan Salame.

According to the indictment, one of the unnamed executives "publicly aligned himself with conservatives." Of the top three FTX donors, Salame is the only one that fits that description.

Singh was the 36th largest donor in the 2022 midterm cycle and Salame was the 16th, with Singh donating exclusively to Democratic groups and Salame to Republican candidates and groups, according to Open Secrets. Combined with Bankman-Fried's donations, the three donated over $67 million in the 2021-2022 cycle, which, if combined, would have made them the fourth-largest donor.

Bankman-Fried himself was a frequent presence on the Hill and was pushing for a vision of cryptocurrency regulation where much of it would be done by the Commodity Futures Trading Commissions as opposed to the Securities and Exchange Commission. A bill he supported that would empower the CFTC was even introduced by a bipartisan collection of senators, including the ranking members of the Senate Agriculture Committee, which oversees the CFTC.

The new indictment is another piece of evidence that Bankman-Fried's lobbying blitz was even more overwhelming, sophisticated and aggressive than previously disclosed. While Bankman-Fried often portrayed himself as liberal, he largely left donations to Republicans to his colleague Ryan Salame. Now, the DOJ is alleging that SBF was, in fact, supporting Republicans using funds pulled directly from his business and an unnamed co-conspirator. "It's been so cringeworthy to hear SBF described as 'progressive' or even a 'Democrat.' No one should ever take the purported ideology or partisan affiliation of a rich person at face value," Jeff Hauser, the director of the Revolving Door Project, and a longtime progressive critic of Bankman-Fried, told Grid.

FTX is not the only company whose executives have donated to different parties, but there are strict rules that are supposed to ensure that individuals are donating their own money according to their own direction. This so-called "straw donor" law is routinely enforced. Last year, for example, the FBI indicted three former defense contractors for allegedly creating and using a shell company to funnel donations to a super PAC supporting Sen. Susan Collins (R-Maine). Lawyers for Salame and Singh did not respond to requests for comment.

After the November elections, a super PAC affiliated with Republican Senate leader Mitch McConnell disclosed that it had received a $1 million election in late October, about a week before the election, from FTX US. Bankman-Fried had said in an interview last year with the YouTube channel Coffeezilla that he had donated "about the same amount of money" to both parties in the 2022 election cycle but that the Republican donations were "dark."

The indictment

The indictment alleges that Bankman-Fried "and others" decided that one of the co-conspirators should "contribute at least a million dollars to a super PAC that was supporting a candidate running for a United States Congressional seat and appeared to be affiliated with pro-LGBTQ issues."

The indictment quotes an unidentified political consultant, telling the co-conspirator that, "in general, you being the center-left face of our spending will mean you giving to a lot of woke shit for transactional purposes."

Singh donated $1.1 million to the LGTBQ Victory Fund, which donated to a number of candidates in 2022 but spent over $900,000 in independent expenditures on the campaign of Becca Balint for Vermont's at-large House seat. The group touted its support for Balint and celebrated her victory.

Soon after her election, Balint said she would donate a direct donation from Bankman-Fried of $2,900 to charity. Balint was also endorsed in the Democratic primary for the seat by Protect Our Future, an outside group largely funded by Bankman-Fried and Singh as well as Guarding Against Pandemics, a group run by Bankman-Fried's brother.

"The Balint campaign has never solicited donations from Mr. Bankman-Fried or Mr. Singh," Natalie Silver, the Balint campaign spokesperson, told Grid.

"The campaign is committed to fully cooperating with the U.S. Attorney's investigation of Mr. Bankman-Fried and FTX," Silver added. "As this is an ongoing investigation, we cannot comment further."

Why he did it

The latest indictment suggests that Bankman-Fried's image as the newest big-money donor may have had some downsides and that he sought to make his giving seem less associated with him personally.

"As part of this scheme, contributions were coordinated to be made in the names of the two FTX straw donors to candidates they did not necessarily support or know," prosecutors alleged.

"These straw donations were instead made for purposes of furthering the political agenda of [Bankman-Fried] while providing him cover to avoid being associated with certain contributions and concealing that the source of the contributions was, in fact, Alameda."

But it's less clear that the alleged scheme worked to conceal Bankman-Fried's connection to the candidates. The donations from the LGTBQ Victory Fund and Singh's donations to the Fund were reported on in the Vermont local press, as were the donations made by groups partially funded by Ryan Salame to a campaign for a Long Island Congressional seat of his girlfriend, who he also campaigned with. In both cases, it was noted that they were FTX executives.

Salame's support for a pro-crypto super PAC was reported by the Washington Post in a story about Bankman-Fried headlined, "A 29-year-old CEO is pushing crypto during the Super Bowl by giving away millions in bitcoin."

Clarification

Maggie Severns contributed reporting. Thanks to Brett Zach for copy editing this article.

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