The FTX Collapse Is Also a Huge Campaign Finance Scandal

Prosecutors charged megadonor Sam Bankman-Fried with violating political contribution laws.

Tom Williams/CQ Roll Call

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

Sam Bankman-Fried was set to testify before Congress on Tuesday, but before he could appear, he was arrested in the Bahamas. Not surprisingly, most of the charges he’s facing involve allegations of fraud related to the collapse of FTX, his crypto-trading platform. But a federal indictment unveiled Tuesday also accuses SBFā€”a prolific political donor who cultivated relationships with politicians and policymakersā€”of campaign finance violations.

The precise connection between Bankman-Fried’s own political views and his prodigious political spending isn’t exactly clear. In recent years, he’d built a reputation as a champion of liberal causes, lavishing progressives with donations and promising as much as $1 billion for Democratic campaigns in 2024. But campaign finance records show he openly gave more modest amounts to Republicans, as well. After his company collapsed, Bankman-Fried told reporters, without providing evidence, that he had actually had actually given huge sums to Republicansā€”though he said he preferred to make those donations through dark money groups that weren’t readily traceable.

The campaign finance charge announced on Tuesday adds to the mystery of where SBF’s interests lay and just who in Washington he was courting. In the indictment, the Justice Department accused him him of hiding his donations by funneling them through other people. While outside groups like super-PACs and dark money organizations have no limits on what an individual can contribute, there are still limits on how much an individual can give to a particular campaign or PAC. The indictment is not very helpful in describing what exactly Bankman-Fried did wrong, but it broadly describes an illegal straw-donor arrangement in which he allegedly evaded contribution limits by routing his political giving through someone else.

Straw-donor schemes are among the most frequently charged campaign finance violations because there is often an obvious paper trail and there is a second party who can testify that the donations were not legitimate. The politicians who receive these donations, however, are rarely prosecuted. For now, it’s unclear who Bankman-Fried enlisted to make the donations and who ultimately ended up with the money.

A separate civil fraud lawsuit filed by the Securities and Exchange Commission on Tuesday accused Bankman-Fried of misusing investor money for a variety of purposesā€”including to make political donations. But that lawsuit similarly offered no details on who Bankman-Fried was illegally donating to.

What we do know is that Bankman-Fried was a big donor and that his contributions rapidly increased as FTX grew. In the 2020 election cycle, Bankman-Fried was the 47th largest donor, giving $5.5 million. All of that, according to campaign finance watchdog OpenSecrets, went to progressives. In the 2022 cycle, Bankman-Fried was the sixth largest donor, dispersing more than $38 million. This time, $35 million went to progressives and Democrats, with the remainder going to more conservative candidates and organizations, like Sens. Susan Collins (R-Maine) and Richard Burr (R-N.C.). Bankman-Fried took a particular interest in Sen. John Boozman (R-Ark.), donating to his campaign and giving $50,000 to a super-PAC that supported Boozeman. 

After FTX collapsed, Bankman-Fried told an interviewer that he donated equally to both parties. He claimed he kept his donations to Republicans secret because of liberal media bias. 

“All my Republican donations were dark,ā€ he said.ā€œThe reason was not for regulatory reasons, itā€™s because reporters freak the fuck out if you donate to Republicans. Theyā€™re all super-liberal, and I didnā€™t want to have that fight.ā€

But Bankman-Fried’s firm, FTX.US, apparently made no effort to hide the fact that other high-level employees gave heavily to Republicans. Employees (including Bankman-Fried) donated $28 million to the liberal Protect Our Future super-PAC. At the same time, Ryan Salame, one of the company’s top executives, donated $15 million to a conservative super-PAC that boosted a slew of GOP House candidates. Salame was actually the 14th largest donor in this past election, dropping more than $20 million, almost all of it to conservative candidates and causes.

We will probably know more details soon. The exact methods that Bankman-Fried used to direct his secret donationsā€”and the candidates who received themā€”will likely be made public by prosecutors in the coming weeks.

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We canā€™t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who wonā€™t let independent, investigative journalism down are the people who actually care about its futureā€”you.

And we need readers to show up for us big timeā€”again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We canā€™t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who wonā€™t let independent, investigative journalism down are the people who actually care about its futureā€”you.

And we need readers to show up for us big timeā€”again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate