Employees and close allies of Sam Bankman-Fried, the now-disgraced cryptocurrency mogul facing federal fraud and campaign finance charges, gave at least $26,100 directly to Democratic state Sen. Becca Balint’s successful congressional campaign, according to a new VTDigger analysis of Federal Election Commission filings.
Bankman-Fried himself also contributed nearly $10,000 to the Vermont Democratic Party in late August, according to FEC filings, while his brother donated $10,000 more.
The campaign finance allegations against Bankman-Fried, who owned the now bankrupt cryptocurrency exchange FTX and the cryptocurrency trading firm Alameda Research, are twofold. Prosecutors say he used stolen cash to fund his political spending and that he had friends and business associates donate money in their name — but on his behalf — in order to evade contribution limits. The latter allegation constitutes what’s known as a “straw donor” scheme.
Prosecutors have not publicly named the specific campaigns they believe benefited from illegal contributions, although they have made clear the scale of the scheme. “Tens of millions” of dollars were involved, Damian Williams, the U.S. attorney for the southern district of New York, told reporters last week, and both Democrats and Republicans received help.
Prosecutors have begun reaching out to campaigns for information, according to The New York Times. Investigators have not suggested that the campaigns themselves did anything wrong.
Both Balint and U.S. Rep. Peter Welch, D-Vt., have already pledged to donate to charity $2,900 each — a sum equal to what each had received directly from Sam Bankman-Fried. As for the rest of the donations from people in Bankman-Fried’s immediate orbit, Balint campaign manager Natalie Silver said Monday that the campaign had not yet been contacted by the U.S. Department of Justice but would “hold funds in a separate account to await resolution and compensate victims.” She said she did not yet know how much the campaign would cordon off for those purposes.
“I’m going through our database to see how much we will set aside,” Silver wrote in an email.
Balint’s campaign donors include Sean McElwee, a progressive pollster who was reportedly ousted from Data for Progress, a polling firm he founded, in the wake of FTX’s implosion, because of his close ties to Bankman-Fried. (Data for Progress was one of just two polling firms to publicly survey Vermont during the last election.)
Those donating directly to Balint also included Ross Rheingans-Yoo, a trader at Alameda Research; Nishad Singh, the director of engineering at FTX; David Huynh, a Bankman-Fried advisor; Michael Sadowsky, president of Protect our Future, a super PAC funded by Bankman-Fried that endorsed Balint before the primary; and Gabe Bankman-Fried, Sam Bankman-Fried’s brother.
At least four of those donors — McElwee, Gabe Bankman-Fried, Sadowsky and Huynh — each gave Balint $2,900, the legally allowed maximum contribution for the primary campaign on the same day: June 9. McElwee, Gabe Bankman-Fried and Sadowsky then later donated the legally allowed general election maximum to Balint, for a total of $5,800 each. None of Bankman-Fried’s affiliates were named in the indictment against him.
Before being accused of perpetrating one of the largest financial frauds in American history, Bankman-Fried was a sought-after political mega-donor and a frequent presence on Capitol Hill. But when asked about his lavish donations, he insisted at the time that he wanted to pressure lawmakers to invest in preventing the next pandemic. (Skeptics pointed instead to his regulatory agenda for the cryptocurrency industry.)
In an interview Monday, Balint said that she did not know the donors listed by VTDigger, save for Gabe Bankman-Fried, who helmed Guarding Against Pandemics. The pandemic-preparedness PAC, funded in large part by Sam Bankman-Fried, endorsed Balint before the primary.
“I don’t know any of these people. I have not communicated with them, did not solicit their donations. And so I, of course, am — like everyone who’s watching the story — appalled that there may have been fraud committed,” Balint said.
When Seven Days first reported in August that Singh, an FTX executive, had singlehandedly bankrolled the lion’s share of pro-Balint outside spending with a $1.1 million donation to the Victory Fund, an LGBTQ+ super PAC, Balint’s first line of defense was that she did not know Singh. She repeatedly emphasized to the press that, by law, she had no control over how the Victory Fund raised or spent its money, since super PACs are required to operate independently of campaigns.
But campaigns do control who donates directly to them. And months later — on Oct. 26, just weeks before the general election — Singh contributed $2,900, the legally allowed maximum, to Balint’s congressional campaign.
Balint said again Monday that she had never communicated with Singh and had not solicited his support. Staff did not notify her of his contribution, she added, and if they had she would “not have accepted it — period.”
Asked why those in Bankman-Fried’s entourage appeared to have taken such an interest in her electoral success, Balint replied that she had “no idea.”
“And it is a source of incredible frustration for me personally,” she said.
Separate from Balint, Sam Bankman-Fried also donated thousands to the Vermont Democratic Party just days after Singh’s role in funding a tidal wave of pro-Balint ads came to light. Bankman-Fried gave $9,752 to the party on Aug. 31.
The party also received $10,000 from Gabe Bankman-Fried on Oct. 16, according to FEC filings. According to federal election law, the maximum amount an individual can contribute to a state party committee is $10,000 — meaning both Bankman-Fried brothers came just shy of, or met, their contribution limits to the party.
Vermont Democratic Party executive director Jim Dandeneau said Monday evening that the party, along with its attorneys and the Democratic National Committee, were reviewing the donations the party received from both Bankman-Fried brothers. The party has “set the money aside” and will follow their attorneys’ and the DNC’s advice on what to do with it. Dandeneau said his conversations with legal counsel about the donations were confidential.
Asked if he had been made aware of the Bankman-Fried brothers’ donations prior to VTDigger’s inquiry on Monday, Dandeneau said no. He also said the party had not been contacted by any law enforcement agencies investigating Sam Bankman-Fried, but if and when they were, the party would “of course” cooperate.
Vermont Republican Party chair Paul Dame on Monday called on the Vermont Democratic Party to follow Balint’s and Welch’s lead and return the $10,000 sum from Sam Bankman-Fried.
“Democrats have to make it right and distance themselves from this corruption,” Dame said in a Monday night newsletter to Republican supporters. “The Vermont Democrat Party should return the nearly $10k it received from Bankman-Fried, so that law enforcement can use that money to make defrauded investors whole.”
Dandeneau told VTDigger Monday night that “we’re not the only ones” who have received contributions from Bankman-Fried and his associates, citing recent revelations about Bankman-Fried’s political donations to both Democrats and Republicans.
“It’s awful, but we’re going to follow our attorneys’ advice,” he said.