California Congressmen Want No More SBF Money

Before Sam Bankman-Fried faced the collapse of his cryptocurrency empire and a list of criminal and civil charges, the disgraced former FTX executive was one of the biggest donors in the election. mid-term of 2022.

Over the past two years, Bankman-Fried, 30, has pumped about $40 million into political action committees and other groups that have spent heavily supporting candidates, most of whom were Democrats.

Bankman-Fried gave directly to nearly 60 congressional campaigns and spent more on candidates in California than in any other state, according to federal records.

Until the FTX exchange collapsed last month, leaving investors short of hundreds of millions of dollars, Bankman-Fried was also a frequent visitor to Washington, where he lobbied for pro-business regulation. cryptography. He resigned when FTX filed for bankruptcy.

Bankman-Fried was arrested in the Bahamas this week, hours before US federal prosecutors charged him with multiple crimes, including conspiracy, wire fraud, securities fraud and money laundering.

Prosecutors also alleged that Bankman-Fried made more than $25,000 in illegal contributions to candidates and political action committees by reporting the money to federal regulators “on behalf of other people.”

The Securities and Exchange Commission also charged Bankman-Fried with civil securities fraud, alleging he diverted FTX funds to his hedge fund Alameda Research, which he “used as his personal piggy bank” to donate to political campaigns and buy luxury real estate.

The Commodity Futures Trading Commission, which regulates the US derivatives market, accused Bankman-Fried of fraud and alleged he caused the loss of more than $8 billion in FTX client deposits.

Some politicians have since sought to distance themselves from Bankman-Fried, fearing they are tied to a mega-donor who faces up to 115 years in federal prison.

Outside groups linked to Bankman-Fried also spent about $2.4 million on two races for the U.S. House of Representatives in Southern California.

The Times contacted every member of the California congressional delegation who received a campaign contribution from Bankman-Fried to find out what they did with the money.

No one who responded to requests for comment said they planned to keep the money. Instead, they said they had donated it to charity, planned to do so, or were awaiting legal advice. Only some campaigns provided details of the organizations that would benefit.

US Senator Alex Padilla
Padilla was elected to a six-year term in the US Senate in November. He received $2,900 from Bankman-Fried in the primary election and $2,900 in the general election, according to federal records.

A Padilla spokesperson said the money was donated last month to food banks across California.

Representative Pete Aguilar (D-Redlands)
Aguilar, who will represent the 33rd congressional district in San Bernardino in the next Congress, received $2,900 from Bankman-Fried in the primary election and $2,900 in the general election, according to federal records.

Aguilar’s spokesperson said the $5,800 was donated to local charities last month.

Rep. Salud Carbajal (D-Santa Barbara)
Carbajal represents the 24th congressional district in Santa Barbara and San Luis Obispo counties. He received $2,900 from Bankman-Fried in the primary election and $2,900 in the general election, records show.

Carbajal said the money was donated to a local organization “that does good in the area of ​​financial services and financial education”, including giving microloans to women.

It’s important to recognize “the taint that comes with these funds,” he said. But returning them to the donor “would not necessarily be the best approach”.

Carbajal said he sees cryptocurrency as innovative, but also inherently risky. He said he “never co-signed [or] co-sponsored letters or laws” and added: “It was clearly never without risk, and it is something that I have always expressed.

Rep. Lou Correa (D-Santa Ana)
Correa represents Orange County’s 46th congressional district, which includes parts of Anaheim and Santa Ana. He received $2,900 from Bankman-Fried in September, according to federal records.

Representatives for Correa did not return requests for comment.

Representative Jim Costa (D-Fresno)
Costa will represent California’s 21st congressional district in the San Joaquin Valley. He received $2,900 from Bankman-Fried in July, according to federal records. The contribution was unsolicited, Costa said.

“I intend to return or donate all funds received,” Costa said in a statement. “I will hold the funds in a separate account while we await advice from legal counsel before proceeding.”

For several years, Costa has said that he “doubted the need for cryptocurrency and believes that if there is continued use, it needs to have a strong regulatory framework to protect against the abuses we have witnessed with FTX. “.

Representative-elect Robert Garcia (D-Long Beach)
Former Long Beach Mayor Garcia is the elected representative of California’s 42nd congressional district, which includes Long Beach and part of the cities in southeastern Los Angeles County. He takes office in January.

Bankman-Fried contributed $2,900 to Garcia’s campaign in March, according to federal records. A representative for Garcia’s campaign said the money was donated in mid-December to “a local nonprofit that provides free immigration legal services.”

Protect Our Future, a political action committee funded by Bankman-Fried, also said it has spent more than $1 million supporting Garcia. Because this money was spent independently, rather than contributed to Garcia’s campaign, it cannot be donated or returned.

Representative Josh Harder (D-Turlock)
Harder will represent California’s 9th congressional district in the Stockton area. He received $2,900 from Bankman-Fried in September, according to federal records.

Harder’s office said his campaign would donate the money to the Stockton Food Bank, the largest direct provider of packaged emergency food in San Joaquin County.

“What happened seemed like a tragedy, obviously,” Harder said of FTX’s collapse. Giving the contribution was the right thing to do, he said, “because of what happened to the victims” who lost money and because Bankman-Fried was charged with fraud in funding the campaign.

“We don’t have to wait for someone to be convicted of this,” Harder said. “…We don’t want to be involved with someone like that, obviously.”

Rep. elected Sydney Kamlager (D-Los Angeles)
Kamlager is the elected representative for California’s 37th congressional district in South Los Angeles, a seat previously held by Los Angeles Mayor Karen Bass. Kamlager takes office in January.

Kamlager received $2,900 from Bankman-Fried in June, the federal archives show it. A Kamlager campaign representative said the money was donated in mid-December to local nonprofit Vermont Slauson Economic Development Corp.

Outside groups funded by Bankman-Fried also said they spent more than $1 million to support Kamlager’s campaign.

Rep. Jimmy Panetta (D-Carmel Valley Village)
Panetta will represent California’s 19th congressional district, which includes Santa Cruz and Monterey. He received $2,900 from Bankman-Fried in October, according to federal records.

Representatives for Panetta did not return requests for comment.

Lead Candidate Quaye Quartey
Quartey, a Democrat, ran in the primary in California’s 27th congressional district in northern Los Angeles County.

He received a $2,900 contribution from Bankman-Fried in April, according to federal records.

Quartey did not return a request for comment.


Los Angeles Times

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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