Before Sam Bankman-Fried faced the collapse of his cryptocurrency empire and a spate of criminal and civil lawsuits, the disgraced former FTX executive was one of the biggest donors in the 2022 midterm elections.
Over the past two years, Bankman-Fried, 30, has funneled about $40 million to political action committees and other groups that have spent heavily to support candidates, most of whom were Democrats.
Bankman-Fried has donated directly to nearly 60 congressional campaigns and has spent more on candidates in California than any other state, federal records show.
Until the FTX exchange collapsed last month and investors were missing hundreds of millions of dollars, Bankman-Fried was also a frequent visitor to Washington, where he advocated for favorable crypto regulations. 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 alleged that Bankman-Fried made more than $25,000 in illegal campaign contributions to candidates and political action committees by reporting the money to federal authorities “on behalf of other people.”
The Securities and Exchange Commission has also charged Bankman-Fried with civil securities fraud, alleging that he diverted FTX funds to his hedge fund Alameda Research, which he used “as his personal piggy bank” to donate to political campaigns and buy luxury homes.
The Commodity Futures Trading Commission, which regulates the US derivatives market, accused Bankman-Fried of fraud, claiming he caused the loss of more than $8 billion in FTX customer deposits.
Some politicians have since tried to distance themselves from Bankman-Fried, suspicious of being linked to a mega-donor who faces up to 115 years in federal prison.
Outside groups associated with Bankman-Fried also spent about $2.4 million in two races for the US House of Representatives in Southern California.
The Times contacted every member of the California congressional delegation who had received a campaign donation from Bankman-Fried to find out what they were doing with the money.
No one who responded to requests for comment said they planned to keep the money. Instead, they said they donated it to charity, planned it, or were waiting for legal advice. Only a few campaigns provided details of the organizations that would benefit.
US Sen. Alex Padilla
Padilla was elected to the US Senate in November for a six-year term. He received $2,900 from Bankman-Fried during the primary and $2,900 during the general election, federal records show.
A Padilla spokesman said the money was donated to food banks across California last month.
Rep. Pete Aguilar (D-Redlands)
Aguilar, who will represent the 33rd congressional district in San Bernardino at the next convention, received $2,900 from Bankman-Fried in the primary and $2,900 in the general election, federal filings show.
Aguilar’s spokesman said the $5,800 was donated to local charities last month.
Rep. 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 the area of financial services and financial literacy,” including providing women with microcredit.
It’s important to “recognize the taint that comes with those funds,” he said. But returning them to the donor “wouldn’t necessarily be the best approach.”
Carbajal said he viewed cryptocurrencies as innovative but also inherently risky. He said he “never co-signed [or] co-sponsored letters or legislation,” adding, “It was clearly never without risk, and I’ve always expressed that.”
Rep. Lou Correa (D-Santa Ana)
Correa represents the 46th congressional district in Orange County, which includes portions of Anaheim and Santa Ana. He received $2,900 from Bankman-Fried in September, federal records show.
Correa officials did not respond to requests for comment.
Rep. Jim Costa (D-Fresno)
Costa will represent California’s 21st congressional district in the San Joaquin Valley. He received $2,900 from Bankman-Fried in July, federal records show. The contribution was unsolicited, said Costa.
“It is my intention to return or donate any monies received,” Costa said in a statement. “I will hold the money in a separate account while we await counsel’s guidance before proceeding.”
Costa said he has been “doubtful about the need for cryptocurrency for several years and believes that with continued use there needs to be a strong regulatory framework to protect against the abuses we have seen with FTX.”
Rep. Elect Robert Garcia (D-Long Beach)
Former Long Beach Mayor Garcia is the elected representative of California’s 42nd congressional district, which includes Long Beach and a portion of the southeastern cities of Los Angeles County. He will take office in January.
Bankman-Fried contributed $2,900 to Garcia’s campaign in March, federal records show. A representative for Garcia’s campaign said the money was donated to “a local non-profit organization that provides free immigration legal services” in mid-December.
Protect Our Future, a political action committee funded by Bankman-Fried, also said it spent more than $1 million to support Garcia. Because this money was independently spent and not contributed to Garcia’s campaign, it cannot be donated or returned.
Rep. 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 Stockton Food Bank, San Joaquin County’s largest direct provider of packaged emergency food.
“What happened obviously seemed like a tragedy,” Harder said of FTX’s collapse. The donation was right, he said, “because of what happened to the victims,” who lost money, and because Bankman-Fried has been accused of campaign finance fraud.
“We don’t have to wait for someone to be convicted for this,” Harder said. “… of course we don’t want to have anything to do with someone like that.”
MP Elected Sydney Kamlager (D-Los Angeles)
Kamlager is the elected representative for California’s 37th congressional district in south Los Angeles, a seat previously held by Los Angeles Mayor Karen Bass. Kamlager will take office in January.
Kamlager received $2,900 from Bankman-Fried in June, Federal records show. A representative from Kamlager’s campaign said the money was given to local nonprofit Vermont Slauson Economic Development Corp in mid-December. been donated.
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. He received $2,900 from Bankman-Fried in October, federal records show.
Panetta officials did not respond to requests for comment.
Lead candidate Quaye Quartey
Quartey, a Democrat, ran in the primary in California’s 27th congressional district in northern Los Angeles County.
In April, he received a $2,900 donation from Bankman-Fried, federal records show.
Quartey did not respond to a request for comment.