California Democrats got money from crypto CEO accused of fraud. Now they’re giving it away
Samuel Bankman-Fried, the founder and CEO of embattled cryptocurrency exchange FTX, gave thousands of dollars to Democratic congressional candidates in California — and most of those candidates are now sending the money to charities.
Among those getting contributions this year from Bankman-Fried, who faces criminal charges and possibly more than 100 years in prison, was Sen. Alex Padilla, D-Calif. and Reps. Josh Harder, D-Tracy, Jim Costa, D-Fresno, Salud Carbajal, D-Santa Barbara and five other California House candidates, according to the Center for Responsive Politics and Federal Election Commission data.
The California Democratic Party received $9,756 from Bankman-Fried in September. It does not intend to keep the money.
“CADEM (the California Democratic Party) did not solicit the contribution from Bankman-Fried. Given the serious allegations around potential campaign finance violations, CADEM is setting aside the contribution and will return it as soon as we receive proper direction in the legal proceedings.,” said party spokeswoman Shery Yang.
Among members of Congress, Harder, who won re-election with 55% of the vote, got $2,900 in September. The next month, Working Harder, his political action committee, got another $5,000.
The congressman is donating all the contributions to the Stockton Food Bank.
Donors can give a candidate’s campaign a maximum of $2,900 per election. The limit for PACs is $5,000.
Padilla, who coasted to a full Senate term last month, donated the $5,800 he had received from Bankman-Fried this summer to food banks across the state.
Carbajal, who won reelection with 60% of the vote, got $2,900 from Bankman-Fried twice.
He gave both times for the general election, which is not permitted, so Carbajal sent the second $2,900 back.
The other $2,900 was donated to Women’s Economic Ventures in Santa Barbara, which helps women become financially independent, on Nov. 28, before Bankman-Fried was charged. Carbajal had concerns about the company’s financial practices.
Rep. Pete Aguilar, D-San Bernardino, donated Bankman-Fried’s contributions to local charities last month.
Aguilar this month was elected Democratic caucus chairman, the third-ranking party House position, making him the highest-ranking Democratic Californian in the House next year.
Costa received two $2,900 contributions. He said Friday he intends to return or donate any funds he received.
“During my most recent campaign I received unsolicited contributions from the company’s principal Samuel Bankman-Fried. It is my intention to return or donate all the funds received. I will hold the funds in a separate account while we await guidance from legal counsel before proceeding,” he said.
It’s not unusual for candidates to return contributions or donate them to charities if the donor turns out to be controversial.
Bankman-Fried and Democrats
Bankman-Fried was well-known in Democratic circles as a generous donor.
In 2021 and 2022, he gave $27 million to the Protect our Future PAC, which promotes pandemic prevention and has promoted Democratic candidates.
He gave the House Majority Fund, which helps Democratic House members’ campaigns, $6 million this year. And he donated $250,000 to the Democratic Congressional Campaign Committee.
He has said he wanted to give millions and perhaps billions to political causes, and was a frequent tweeter, often detailing not only his company’s practices but his views.
Calling himself a “significant donor” to campaigns, he tweeted on Nov. 5, just before the election, that he was “supporting constructive candidates across the aisle to prevent pandemics and bring a bipartisan climate to DC.”
Bankman-Fried was arrested in the Bahamas on Monday after prosecutors in this country filed criminal charges that include wire fraud, money laundering and other counts. The Securities and Exchange Commission and the Commodity Futures Trading Commission have also taken action against Bankman-Fried.
Estimates are that consumers have lost millions, as FTX declared bankruptcy.
Prosecutors have alleged Bankman-Fried used funds from FTX, the company he headed, for personal use, including campaign donations.
Mark S. Cohen, an attorney for Bankman-Fried, said Tuesday he is “reviewing the charges with his legal team and considering all of his legal options,” Associated Press reported.
Prior to his Monday arrest, Bankman-Fried was often seen on Capitol Hill, and was scheduled to testify Tuesday before the House Financial Services Committee.
This story was originally published December 16, 2022 at 11:13 AM with the headline "California Democrats got money from crypto CEO accused of fraud. Now they’re giving it away."
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