Sam Bankman-Fried appears to have violated the Federal Election Campaign Act after admitting to making tens of millions of dollars in dark money contributions to hide his giving from the public, according to a complaint filed today by Citizens for Responsibility and Ethics in Washington with the Federal Election Commission.
Bankman-Fried, the disgraced former billionaire head of cryptocurrency exchange FTX, is a well-known major Democratic contributor, due in part to disclosures to the FEC. But in a recent interview, he admitted that he gave equal amounts to support Republicans, but did it through dark money contributions to hide them from the public. According to Bankman-Fried, if you counted his hidden donations, he would likely be the second or third largest Republican donor.
“Taking him at his word, Bankman-Fried was able to direct at least $37 million to influence federal elections while evading federal laws that require disclosure of the true source of the contributions,” said CREW Senior Vice President and Chief Counsel Donald Sherman. “The FEC needs to commence an immediate investigation into Sam Bankman-Fried.”
Typically, wealthy donors making secret political contributions are able to evade federal disclosure laws by feigning a lack of intent to influence federal elections. They maintain a plausible deniability that a donation to a nonprofit is made for general purposes and without any knowledge about where those funds will ultimately go. Bankman-Fried’s admission blows up any chance of plausible deniability.
Bankman-Fried admitted he transferred funds “to Republicans” to influence “primaries” because that’s “where the good candidates” are elevated “against bad candidates.” He even admitted that he intentionally structured his donations to evade public reporting. The complaint also calls for an investigation into the unnamed groups used by Bankman-Fried to fund Republicans’ electoral efforts.
“Bankman-Fried said the quiet part out loud,” Sherman said. “He admitted that he violated federal laws designed to ensure Americans have transparency into those funding elections and now needs to be held accountable.”
CREW Senior Litigation Counsel Stuart McPhail submitted a statement for the record to the House Committee on Financial Services explaining how Bankman-Fried’s alleged violations and his potential evasion of timely disclosure of tens-of-millions in campaign contributions demonstrate the urgent need for Congress to strengthen campaign finance laws. Firstly, CREW urged Congress to take actions to eliminate a loophole that Bankman-Fried allegedly used, involving the use of conduits to shield the true source of a contribution. Secondly, Congress should bring the scope of civil enforcement of campaign finance laws in line with criminal enforcement by reinstating the civil prohibition of conspiracy to violate campaign finance laws. Lastly, Bankman-Fried’s willingness to brazenly violate the campaign finance laws is the result of the FEC’s general lax enforcement and courts’ erroneously gutting the FECA’s citizen suit provisions. Congress recently considered a number of reforms to reinvigorate the FEC in the For the People Act, each of which has merit and would help reduce the culture of impunity in which Mr. Bankman-Fried acted. Congress should act to pass these important reforms.