Before Sam Bankman-Fried faced the collapse of his cryptocurrency empire and a litany of criminal and civil charges, the disgraced former FTX executive was one of the biggest donors to the 2022 midterm elections.
In the past two years, Bankman-Fried, 30, has given about $40 million to political action committees and other groups that have spent big to support candidates, most of them Democrats.
Bankman-Fried has been directly involved in 60 campaigns for Congress and has spent more on candidates in California than in any other state, federal records show.
Until the FTX exchange collapsed last month, leaving investors short hundreds of millions of dollars, Bankman-Fried was also a frequent visitor to Washington, D.C., where he lobbied for crypto-regulation. 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 allege that Bankman-Fried made more than $25,000 in illegal campaign contributions to candidates and political action committees, reporting the money to federal regulators “on behalf of other persons.”
The Securities and Exchange Commission also charged Bankman-Fried with civil securities fraud, alleging that she diverted FTX funds to her hedge fund, Alameda Research, which she “used as her personal piggy bank” to donate to political parties. to travel and buy luxury real estate.
The Commodity Futures Trading Commission, which regulates the U.S. derivatives market, accused Bankman-Fried of fraud and alleged that it caused more than $8 billion in losses on FTX customer deposits.
Some politicians have since sought to distance themselves from Bankman-Fried, worried about being associated with a mega-donor who faces up to 115 years in federal prison.
Outside groups tied to Bankman-Fried also spent about $2.4 million in two U.S. House races in Southern California.
The Times contacted every member of California’s congressional delegation who received campaign contributions 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 and planned or were awaiting legal advice. Only some campaigns provided concrete benefits to the recipient organizations.
US Senator Alex Padilla
In November, Padilla was elected to a six-year term in the US Senate. He received $2,900 from Bankman-Fried during the primary election and $2,900 during the general election, federal records show.
A spokesman for Padilla said the money was donated to California food banks last month.
Pete Aguilar (D-Redlands)
Aguilar, who will represent San Bernardino’s 33rd Congressional District in the next Congress, received $2,900 from Bankman-Fried in the primary and $2,900 in the general election, federal records show.
A spokesman for Aguilar said the $5,800 was donated to local charities last month.
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 and $2,900 in the general election, records show.
Carbajal said the money was donated to a local organization “doing good in financial services and financial literacy,” including providing microloans to women.
It’s important to recognize “the flaw associated with these measures,” he said. But returning them to the donor “isn’t necessarily the best approach.”
Carbajal said he sees cryptocurrency as innovative but also inherently risky. He said he “never signed [or] Co-sponsored any letter or legislation” and added:
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, federal records show.
Correa’s representatives did not return requests seeking comment.
Rep. Jim Costa (D-Fresno)
Costa will represent California’s 21st Congressional District in the San Joaquin Valley. In July, he received $2,900 from Bankman-Fried, federal records show. The investment was unsolicited, Costa said.
“It is my intention to return or donate all funds received,” Costa said in a statement. “I will hold the funds in a separate account while we await guidance from legal counsel before proceeding.”
For several years, Costa said, he has “doubted the need for cryptocurrency and believes that if it continues to be used, it should have a strong regulatory framework to protect against the abuses we’ve seen with FTX.”
Rep.-elect Robert Garcia (D-Long Beach)
A former mayor of Long Beach, Garcia is the newly elected representative of California’s 42nd Congressional District, which includes Long Beach and parts of southeastern Los Angeles County. He assumes the position in January.
Bankman-Fried contributed $2,900 to Garcia’s campaign in March, federal records show. A spokesman 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 reported spending more than $1 million to support Garcia. Because that money was self-spent rather than contributing to Garcia’s campaign, it cannot be donated or returned.
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, federal records show.
Harder’s office said his campaign will donate the money to the Stockton Food Bank, San Joaquin County’s largest direct provider of packaged emergency food.
“What happened seems like a tragedy, obviously,” Harder said of the FTX collapse. The donation was the right thing to do, he said, “because of what happened to the victims” who lost money and because Bankman-Fried was accused of campaign finance fraud.
“We shouldn’t expect someone to be convicted of this,” Harder said. “… Obviously, we don’t want to be involved with anyone like that.”
Rep.-elect Sydney Kamlager (D-Los Angeles)
Kamlager is the newly elected representative for South Los Angeles, California’s 37th Congressional District, previously held by Los Angeles Mayor Karen Bass. Kamlager takes office in January.
Kamlager received $2,900 from Bankman-Fried in June. federal records show. A Kamlager campaign spokesman said the money was donated in mid-December to a local nonprofit, the Vermont Slauson Economic Development Corp.
Outside groups funded by Bankman-Fried also reported spending 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. In October, he received $2,900 from Bankman-Fried, federal records show.
Representatives for Panetta did not respond to requests for comment.
Primary candidate Quai Quarty
Quartey, a Democrat, ran in the primary for California’s 27th Congressional District, north of Los Angeles County.
He received a $2,900 investment from Bankman-Fried in April, federal records show.
Quartey did not return a request for comment.