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Sam Bankman-Fried’s donations may have been tens of millions more than we thought

The founder of FTX used executives as cut-outs for donations, prosecutors allege

According to figures compiled by Open Secrets, Bankman-Fried was the second-largest Democratic donor of the 2022 campaign cycle, with almost $36 million in donations, largely to Democratic groups and candidates. This put him ahead of megadonors like Peter Thiel or James Simons but behind George Soros or Ken Griffin. Now, the Department of Justice is alleging that his donating spanned even further, using the names of other executives to support more political candidates than he himself did.

The indictment alleges that the donations added up to “tens of millions of dollars” and that they were “unlawful because they were made in the name of a straw donor or paid for with corporate funds.” The purpose of these donations was, among others things, to get around individual campaign contribution limits, the indictment alleges.

The prosecutors allege that Bankman-Fried’s straw donations came from the accounts of Alameda Research, the hedge fund affiliated with FTX, and “included funds that had been deposited by FTX customers.”

“To avoid certain contributions being publicly reported in his name, Bankman-Fried conspired to and did have certain political contributions made in the names of two other FTX executives,” which the indictment does not identify. “Those contributions were made directly to candidates in the names of those FTX executives but with FTX and Alameda funds.”

Though the two co-conspirators are not identified in the indictment, the details included point to two executives: former FTX Engineering Chief Nishad Singh and co-CEO Ryan Salame.

According to the indictment, one of the unnamed executives “publicly aligned himself with conservatives.” Of the top three FTX donors, Salame is the only one that fits that description.

The indictment

The indictment alleges that Bankman-Fried “and others” decided that one of the co-conspirators should “contribute at least a million dollars to a super PAC that was supporting a candidate running for a United States Congressional seat and appeared to be affiliated with pro-LGBTQ issues.”

The indictment quotes an unidentified political consultant, telling the co-conspirator that, “in general, you being the center-left face of our spending will mean you giving to a lot of woke shit for transactional purposes.”

“The Balint campaign has never solicited donations from Mr. Bankman-Fried or Mr. Singh,” Natalie Silver, the Balint campaign spokesperson, told Grid.

“The campaign is committed to fully cooperating with the U.S. Attorney’s investigation of Mr. Bankman-Fried and FTX,” Silver added. “As this is an ongoing investigation, we cannot comment further.”

Why he did it

The latest indictment suggests that Bankman-Fried’s image as the newest big-money donor may have had some downsides and that he sought to make his giving seem less associated with him personally.

“As part of this scheme, contributions were coordinated to be made in the names of the two FTX straw donors to candidates they did not necessarily support or know,” prosecutors alleged.

“These straw donations were instead made for purposes of furthering the political agenda of [Bankman-Fried] while providing him cover to avoid being associated with certain contributions and concealing that the source of the contributions was, in fact, Alameda.”

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