Disgraced cryptocurrency executive Sam Bankman-Fried secretly spread his political influence by “steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans,” federal prosecutors alleged in a new indictment of Bankman-Fried filed Thursday.
Bankman-Fried took credit for more than $38 million in publicly disclosed campaign donations in the 2022 election cycle. But, prosecutors say, he hatched a “scheme” in which millions more in company money would be given to yet more candidates and groups — only that money would be given in the name of other company executives, not his own.
Per federal campaign finance law, contributions to individual candidates and party committees are capped at several thousand dollars per cycle, but there is no cap on donations to super PACs. The catch is that all those contributions, and the donors’ identities, must be disclosed to the Federal Election Commission.
That’s what Bankman-Fried didn’t want, say prosecutors. He wanted to play all sides of the political system and spread his influence, but he “did not want to be known as a left-leaning partisan, or to have his name publicly attached to Republican candidates,” they allege. He also wanted to steer more money to candidates to whom he had already given the maximum allowable donations, according to the indictment.
So, he got two FTX executives to play those roles — one to be the “left-leaning partisan,” and one to be the Republican donor. The executives aren’t named in the indictment, but the details and public campaign disclosure information strongly suggest that they are Nishad Singh and Ryan Salame, respectively. Each gave tens of millions in campaign donations in the 2022 cycle, but the money really came from Bankman-Fried’s companies, the cryptocurrency exchange FTX and hedge fund Alameda Research, prosecutors say.
This is known as a “straw donor” scheme, which is illegal. Conservative commentator Dinesh D’Souza was indicted for a similar offense in 2014, but at a much smaller scale — he sent $20,000 through straw donors, but Bankman-Fried may have sent tens of millions.
Bankman-Fried has pleaded not guilty to an earlier indictment filed by these same prosecutors in December, charging him with several counts of fraud and with conspiring to launder money. He has not yet entered his plea on the new indictment.
How Bankman-Fried’s campaign donation scheme worked, according to prosecutors
Bankman-Fried and a political consultant working for him, unnamed in the indictment, allegedly would pick candidates or groups they wanted to fund, and Singh would put his name on the donations to the more left-leaning causes. Per the indictment, the political consultant told Singh, “in general, you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes.”
In 2022, Singh’s donations included $4 million to Reproductive Freedom for All, a group supporting an abortion rights ballot initiative in Michigan; $2.25 million to Women Vote!, the independent expenditure arm of Emily’s List, a group supporting pro-abortion-rights women candidates; and $1.1 million to the LGBTQ Victory Fund, money used to support Becca Balint’s winning Democratic primary bid for Vermont’s congressional seat.
Per the indictment, Singh was uncomfortable making that LGBTQ Victory Fund contribution, apparently because he was not gay, but he eventually agreed there was no one “trusted at FTX [who was] bi/gay” who could have made it instead.
Prosecutors also claim Bankman-Fried and others coordinated donations on “an encrypted, auto-deleting Signal chat” called “Donation Processing.” They say that at one point, an FTX employee was told to send $107,000 from Bankman-Fried’s personal account to the New York State Democratic Committee — but that Bankman-Fried later asked for the money to be sent from Singh’s account instead. Singh has recently been preparing a plea deal with prosecutors, Bloomberg News reported last week. Two other executives associated with Alameda or FTX, Caroline Ellison and Gary Wang, have already pleaded guilty to fraud charges.
Salame, meanwhile, spent big on Republican candidates and pro-Republican groups, giving around $24 million in publicly disclosed donations. The indictment claims some of that was “directed by Bankman-Fried and funded by Alameda.” Salame gave $15 million to a Super PAC funding various GOP congressional candidates. Separately, about $1.5 million of it also went to support his girlfriend, Michelle Bond, who lost the GOP primary for a New York congressional seat. Salame has not been charged.
Disclosure: In August 2022, Sam Bankman-Fried’s philanthropic family foundation, Building a Stronger Future, awarded Vox’s Future Perfect a grant for a 2023 reporting project. That project is now on pause.