Lawmakers quick to unload FTX founder's contributions

Lawmakers who accepted piles of cash from onetime wunderkind Samuel Bankman-Fried now can’t move fast enough to offload their contributions from the disgraced crypto mogul to anywhere else but their own campaign coffers.

Before his arrest in the Bahamas this week, Bankman-Fried, the former CEO of cryptocurrency exchange FTX, was a prolific political donor to individual candidates — from local campaigns all the way up to President Joe Biden — as well as super PACs that can wield outsized influence in campaigns. But in a matter of days, Bankman-Fried — a proponent of “effective altruism” — became a pariah facing allegations of massive financial fraud and potentially decades in prison.

The Associated Press contacted more than four dozen current and incoming lawmakers who received campaign contributions from Bankman-Fried this election cycle — a group that included members of both political parties and chambers of Congress, but predominantly House Democrats. Many of the recipients of Bankman-Fried's cash were quick to respond, stressing they already donated or plan to send the money to charity. Several also stressed that the lawmakers did not solicit the contributions from Bankman-Fried.

Recipients of Bankman-Fried's campaign largesse included lawmakers at the most senior levels of House and Senate Democratic leadership. Rep. Hakeem Jeffries, D-N.Y., the incoming leader of House Democrats, donated the contribution to the American Diabetes Association. Rep. Pete Aguilar, D-Calif., who will be the third-ranking House Democrat next year, donated his contributions from Bankman-Fried to local charities last month.

In the Senate, Majority Whip Dick Durbin of Illinois, the No. 2 Democrat in the chamber, will donate his contribution to an “appropriate charity,” a spokeswoman said. Sen. Patty Murray, D-Wash., who will be third in line to the presidency next year, will donate her cash to a local Washington state charity.

Sen. Tina Smith, D-Minn., donated Bankman-Fried’s contributions to Planned Parenthood North Central States. Sen. Alex Padilla, D-Calif., sent his cash to food banks across California. Sen. Lisa Murkowski, R-Alaska, donated her contribution to Storyknife Writers Retreat in Homer, Alaska.

Democratic Rep. Ruben Gallego of Arizona, who is strongly hinting he’ll challenge Democrat-turned-independent Kyrsten Sinema for the Senate, gave the $5,800 he received from Bankman-Fried to incoming Democratic Rep. Andrea Salinas of Oregon. In her Democratic primary, Salinas defeated a rival backed by millions of spending from Bankman-Fried.

“Congress must take immediate action to regulate the crypto industry, implement strict oversight standards and shield consumers from schemes like this in the future,” said Rep. Angie Craig, D-Minn., who added she will donate her Bankman-Fried contribution to a bankruptcy fund to compensate FTX customers.

Sens. Cory Booker, D-N.J., John Boozman, R-Ark., Bill Cassidy, R-La., Susan Collins, R-Maine, John Hoeven, R-N.D., Joe Manchin, D-W.Va., Debbie Stabenow, D-Mich., Sen.-elect Peter Welch, D-Vt., and Reps. Josh Gottheimer, D-N.J., Salud Carbajal, D-Calif., Joe Neguse, D-Colo., Josh Harder, D-Calif., Kim Schrier, D-Wash., Ritchie Torres, D-N.Y., all donated their Bankman-Fried donations to various charities or plan to, according to their aides.

The main campaign committees dedicated to electing congressional Democrats also received tens of thousands from Bankman-Fried, while House Majority PAC, a deep-pocketed outside group backing House Democrats, got a $6 million contribution, according to FEC records.

In a statement Friday, DNC spokesman Daniel Wessel said that the group will set aside the $815,000 in contributions it has received from Bankman-Fried since 2020. That total includes donations Bankman-Fried made directly to the DNC as well as the Democratic Grassroots Victory Fund and the Biden Victory Fund, which was a joint fundraising committee approved by Joe Biden's presidential campaign, the DNC and state Democratic parties.

“We will return as soon as we receive proper direction in the legal proceedings,” Wessel said.

Officials at the DSCC and DCCC — the official campaign arms of Senate and House Democrats, respectively — released similar statements.

Then there were the millions given to more obscure political action committees: The Protect Our Future PAC, financed by Bankman-Fried, spent up to $2 million in ads in support of Lucy McBath, who ran a successful campaign in Georgia's 7th Congressional District against incumbent Rep. Carolyn Bordeaux. Bankman-Fried wired at least $27 million to the PAC in 2022, according to the FEC website.

In an interview with the Associated Press, Bordeaux said the dilemma surrounding Bankman-Fried's campaign spending isn't as simple as returning individual donations. In some cases, the money already has been used to affect elections.

“The larger issue at play is the super PACs,” Bordeaux said. “That’s not something they can refund. Here is an example of a billionaire using money he stole and diverted into political contributions — it’s an egregious example of the corruption in our political system.”

“This is a good opportunity to reopen the conversation about campaign finance reform," she said.