TL;DR
- FTX Founder’s Family in Donation Scandal: Emails show Sam Bankman-Fried’s family helped donate over $100 million to political campaigns, possibly using FTX client funds.
- Family Members’ Roles: Father (Joe) advised on withdrawals and lawyers. Mother (Barbara) requested donations for her Democratic PAC. Brother (Gabriel) requested donations for specific politicians.
- Legal Consequences: Prosecutors allege illegal straw donor scheme. Joe’s involvement raises questions about his knowledge. Barbara’s actions are likely legal, but Gabriel’s raise concerns.
Emails recently uncovered by The Wall Street Journal (WSJ) have shed light on a high-profile political donation scandal involving Sam “SBF” Bankman-Fried, the founder of cryptocurrency exchange FTX.
The disclosures suggest that Bankman-Fried’s family oversaw more than $100 million in political donations, carrying significant legal consequences. Prosecutors claim that Sam Bankman-Fried utilized funds taken from FTX clients to contribute to political campaigns, intending to impact the 2022 election.
The controversy implicates two ex-FTX leaders: Ryan Salame and Nishad Singh. Each has confessed to participating in an unlawful straw donor plot aimed at hiding the actual origin of their contributions.
Ryan’s role, according to WSJ, Ryan directed money toward Republican candidates, ostensibly to keep Bankman-Fried’s name out of the spotlight. Nishad’s support, Nishad, on the other hand, supported liberal candidates through similar channels.
The Family Members Involved
Joe Bankman (Father): The emails uncovered indicate that SBF’s father, Joe Bankman, guided Ryan on the process of withdrawing funds.
Joe also facilitated Ryan’s introduction to FTX’s tax attorneys at Fenwick & West, during which they discussed the millions Ryan had withdrawn from Alameda Research. Joe’s participation prompts inquiries into his awareness of the illicit scheme.
David Mason, a former head of the Federal Election Commission, believes that Joe’s comments provide compelling proof of his involvement. If Joe was aware of the donations made under another person’s name, he could face direct legal responsibility.
Barbara Fried (Mother): Barbara, the mother of SBF, was also involved in the situation. In August of 2021, she asked Sam and Nishad Singh for $92,000 to support two progressive projects as part of their Research Initiative.
Barbara founded “Mind the Gap,” a super political-action committee dedicated to supporting Democratic candidates. Legal experts argue that her involvement was not illegal.
Gabriel Bankman-Fried (Brother): Gabriel, SBF’s younger brother, asked Sam to contribute to Democratic politicians and groups, including Senators Joe Manchin and Cory Booker. Gabriel provided detailed lists of desired contributions, specifying whether they should come from Sam’s personal fortune or FTX.
Michael Tremonte, the attorney representing Gabriel and Barbara, contends that Gabriel’s fundraising efforts have supported policymakers committed to preventing pandemics. The most significant request he made was a $5 million donation to “Guarding Against Pandemics,” an organization he founded.
Nishad’s Role
Nishad’s participation in the donation scheme aimed partly at helping SBF save on taxes. Gabriel emailed Sam, proposing that Nishad publicly make gifts to politically-minded individuals within their network. Nishad testified during Sam’s trial, stating that his role eventually became more passive.
In summary, the scandal implicates multiple family members and former FTX executives, with serious legal consequences for their actions. The case highlights the intersection of cryptocurrency wealth, political influence, and campaign finance regulations.
