Prior to the epic collapse of his crypto exchange company, FTX founder Sam Bankman-Fried made a name for himself as a Democrat megadonor, second only to leftist billionaire George Soros in the last election cycle. Democrat lawmakers are now facing pressure to return millions of dollars in political donations, particularly as FTX faces scrutiny for the possible misuse of funds and defrauding customers.
According to the nonpartisan Center for Responsive Politics, the supermajority of Bankman-Fried's personal political donations went to Democrats and leftist groups.
TheBlaze previously reported that Bankman-Fried — now "under supervision" in the Bahamas for potential fraud charges — donated $10 million to then-candidate Joe Biden in 2020 and spent at least $39,826,856 this year in an effort to help Democrats win their House races.
FTX funneled $27 million through the leftist PAC Protect Our Future, accounting for nearly 95% of the funds raised by the PAC.
According to the Wall Street Journal, Sen. Chuck Schumer (D-N.Y.) benefited from the Senate Majority PAC and Rep. Nancy Pelosi (D-Calif.) from the House Majority PAC, to both of which Bankman-Fried and FTX executive Nishad Singh gifted millions of dollars.
Sens. Kirsten Gillibrand (D-N.Y.) and Cory Booker (D-N.J.) were recipients of maximum donations. Failed Democrat candidate Beto O'Rourke also secured $1 million in from the FTX founder in 2022. The lengthy list of Democrat recipients goes on and has been posted by Open Secrets.
Legal and public pressure
Bloomberg reported that the House Financial Services and Senate Banking committees plan to hold December hearings to get to the bottom of FTX's downfall and its potential malfeasance.
Rep. Maxine Waters (D-Calif.), who announced her hearing with Republican Rep. Patrick McHenry (N.C.), told CNBC, "We will be a part of what is going on with these hearings and investigations, and we will do everything that we can to expose any violations that were obviously made."
"The 'effective altruism' that Democrat megadonor Sam Bankman-Fried peddled is perfectly in line with the radical left's efforts to redefine a corporate purpose," said Rep. Andy Barr (R-Ky.). "The House Financial Services Committee will work to expose any impropriety that led to this historic collapse."
Additionally, the Securities and Exchange Commission and the Commodity Futures Trading Commission are investigating the circumstances of FTX's bankruptcy and looking into whether FTX violated securities laws when it allegedly moved customer funds to Bankman-Fried's trading firm Alameda Research, reported ABC News.
It is presently unclear whether the Democrat megadonor lined Democrats' pockets with the cash of customers, who are now collectively out billions of dollars.
A lawsuit was filed on Nov. 16, claiming that Bankman-Fried and his celebrity accomplices are behind losses to American consumers in the neighborhood of $11 billion.
Author Miranda Devine told "Fox & Friends" last week that a "lot of people have lost money and have been ripped off."
Noting that Bankman-Fried visited the Biden White House several times this year, Devine added, "And the Democrats, with their $40 million that they got at least this cycle to win the midterms, plus the $10 million that this guy put into Biden's campaign in 2020, they really owe it to the victims of this scam to give it back."
To keep or not to keep
In light of multiple investigations, consumer actions, and social pressure to do the right thing or at the very least distance themselves from "the next Warren Buffett," some Democrats are ditching Bankman-Fried's donations, in certain cases giving it away to liberal charities.
According to the Wall Street Journal, a spokesman for Gillibrand claimed the Democrat senator donated the money she had taken from Bankman-Fried to the Bronx nonprofit Ariva, Inc..
The Daily Beast contacted 26 lawmakers to ask whether they would keep the cash thrown their way by Bankman-Fried.
Sen. Dick Durbin (D-Ill.) and Rep. Chuy Garcia (D-Ill.) claimed they would give away their donations to charities.
Rep. Ruben Gallego (D-Ariz.) said he had spent the money to "drive turnout" for failed Democrat candidate Andrea Salinas.
Just as Pelosi and Schumer did not respond to the WSJ's requests for comments, Democrat Reps. Lucy McBath (Ga.) and Salud Carbajal (Calif.) wouldn't tell the Daily Beast what they planned to do with their Bankman-Fried cash.
Those who have yet to act may be prompted to soon.
Kathy Bazoian Phelps, a partner at Raines Feldman LLP, told the Washington Examiner that there "is a legal basis potentially to seek the return of those monies that were transferred under both the bankruptcy code and state statutes, what are called fraudulent transfer laws."
"There are defenses that can be asserted, there are certain exemptions, so there is a chance that a lot of those issues will get played out in court, but those transfers will certainly be examined," added Phelps.
John Fund, writing for the National Review, suggested that if a movie is ever made on the basis of author Michael Lewis' book about Sam Bankman-Fried, it may be prudent for the final credits to "feature a list of all of the politicians in both parties who ever took FTX's money and didn't return it."