Checks & Imbalances: The Sam Bankman-Fried Edition

Donald Trump announced he’s running for president on Tuesday night, after inciting an insurrection during his first term in office and helping steer his party toward a disappointing midterm election last week.

“Former President Donald Trump said Tuesday night he’s making another run for president, setting off what’s expected to be a fiery and highly competitive 2024 Republican presidential contest, framed by a worse-than-expected performance for the GOP during last week’s midterms,” reports Nicholas Reimann.

Why The Theory That Sam Bankman-Fried Laundered Ukraine Aid Makes No Sense

“Former crypto billionaire Sam Bankman-Fried had plenty of reasons to spend nearly $40 million on the 2022 midterms. Ukraine likely had little to do with it,” reports Matt Durot:

The sudden collapse of FTX has revealed the now-bankrupt cryptocurrency exchange to be many unpleasant things. But was it a vehicle for Democrats to launder Ukrainian relief funds to their candidates in the 2022 midterms? It’s “a question worth asking,” the world’s richest person, Elon Musk, tweeted Monday on the social media platform he now owns and runs.

Is it, though? According to the conspiracy theory, highlighted on Fox News’ Tucker Carlson Tonight, Ukraine received $18.2 billion of security commitments from the U.S. and an unknown amount of donations through a Ukrainian government aid website launched with FTX in March. The Ukrainian government invested some of that money in FTX, the conspiracy theory goes, and Bankman-Fried then supposedly passed on $40 million of it to a handful of left-leaning super PACs. His deputy Nishad Singh allegedly funneled another $7.4 million.

First, there is no evidence that Ukraine invested in FTX or that funds from Ukraine were used to fund personal political donations by Bankman-Fried, who Forbes estimates was worth $16.7 billion before FTX collapsed, or his deputies at the cryptocurrency exchange, which private investors had recently valued at $40 billion ($32 billion for FTX International and $8 billion for FTX US).

Illustration by Stephanie Jones for Forbes; Photo by Lam Yik/Bloomberg

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Sam Bankman-Fried’s Collapsed Crypto Empire Creates Regulatory Chaos In Washington

“Former FTX CEO Sam Bankman-Fried spent a significant amount of time in Washington over the past half year, meeting with legislators and their staffers,” reports Jason Brett:

His lobbying efforts focused on shaping the future of crypto regulation in the U.S., with a specific emphasis on how an exchange providing both spot and derivative trading could be regulated by the Commodity Futures Trading Commission (CFTC). Some on Capitol Hill felt they had a personal connection with the CEO, which has resulted in shock as to both the fallout of FTX and the highly suspect behavior of Bankman-Fried.

Before the collapse of FTX, Bankman-Fried and his lobbyists were getting resistance to what many considered an aggressive, go-it-alone approach. Much of this activity centered on promoting the Digital Commodity Consumer Protection Act of 2022 (DCCPA), which addresses a gap in U.S. law that leaves financial regulators unsure over who has priority when it comes to overseeing crypto spot markets. However, the legislation as written currently requires decentralized finance (DeFi) platforms to submit to regulations with which they argue that, due to their technological design, they would not be able to comply. Now that the FTX empire has crumbled and Bankman-Fried’s reputation is in tatters, the outlook for regulation is uncertain.

Sam Bankman-Fried was a frequent visitor to Washington, D.C.

Illustration by Gracelynn Wan for Forbes; Photos by Saul Loeb/Getty Images

Continuing Irresolutions

Updates on Checks & Imbalances’ previous reporting

Women Speak Out began to follow through on its pledge to spend $1 million on the Georgia runoff election. On Sunday, the anti-abortion super PAC dropped $260,000 on behalf of Herschel Walker, bringing its total support of the former football star to $1.25 million since the Daily Beast first reported Walker had paid for his girlfriend’s abortion.

*****

On Tuesday, Rep. Alex Mooney (R-W.V.) filed to run for the Senate in 2024. He’s seeking the seat of Democrat Joe Manchin. Mooney is currently at the center of two investigations by the House Committee on Ethics.

National Republican Congressional Committee Is Offering Donors A Book By Kristi Noem, Who Is Not In Congress

The National Republican Congressional Committee is offering signed copies of South Dakota Gov. Kristi Noem’s memoir in exchange for donations of $35 or more. “Not My First Rodeo” was published in June, three-and-a-half years after Noem left Congress.

Federal filings show that the NRCC has spent $122,000 on books since Noem’s came out, but the documents do not specify which titles the group purchased. In addition to Noem’s book, the NRCC is currently offering works by Reps. Dan Crenshaw (R-Texas) and Jim Jordan (R-Ohio).

South Dakota law does not require candidates to itemize their expenses. That means that Noem’s campaign could have theoretically spent donor funds on her book without disclosing the transactions to the public.

Spokespeople for Noem and the NRCC did not respond to inquiries.

Noem’s book debuted at No. 14 on the New York Times best-seller list for nonfiction print and e-books, before dropping off the following week. Unlike some of the Times’ other lists, this one does not flag a listing if retailers report receiving bulk orders.

National Republican Congressional Committee

Tracking Trump

“Officials from six foreign governments spent more than $750,000 in a matter of months on stays at former President Donald Trump’s Washington hotel as they sought to influence Trump’s foreign policy decisions, according to newly released documents, the latest revelations about the financial benefits the former president’s businesses appeared to reap during his time in office,” reports Sara Dorn.

China was one of the countries mentioned, meaning representatives from at least 34 foreign governments visited the Trump’s D.C. hotel between his election and last day in office.

Former Malaysia Prime Minister Najib Razak (center) and his entourage spent at least $250,000 at the hotel when they were in town for Razak’s September 2017 White House visit.

Instagram/Stanzdiver

“Trump Family Signs Deal With Saudi Real Estate Developer” (The New York Times)
“Kemp to testify before Fulton grand jury Tuesday” (The Atlanta Journal-Constitution)
“Facebook reminds fact-checkers Trump is off limits if he says he’s running again for president” (CNN)
“NYC judges toss Mary Trump and Michael Cohen’s lawsuits against Donald Trump” (The New York Daily News)
“CLC Files Complaint Alleging Donald Trump and Save America Violated Soft Money Ban” (Campaign Legal Center)
“Ivana Trump’s NYC Townhouse, Decked Out in Gold and Animal Print, Asks $26.5 Million” (The Wall Street Journal)
“Donald Trump in hot water with Clare County Council over unauthorised fence near luxury resort” (The Irish Sun)

Editor’s Picks

“U.S. intelligence report says key gulf ally meddled in American politics” (The Washington Post)
“Election objectors in Congress received more than $61 million from corporate PACs and industry trade groups in the 2022 cycle” (OpenSecrets)
“The Global Threat of Rogue Diplomacy” (ProPublica)
“Fossil fuel industry dupes media, quietly funds non-profits to block renewable energy” (Popular Information)
“Giuliani Will Not Face Federal Charges Over Lobbying, Prosecutors Say” (The New York Times)
“‘Vicious and Venomous’: Raphael Warnock Says Critics of His Church’s Evictions Are Attacking Jesus” (The Washington Examiner)
“K-Street executives are holding a big fundraising event for @HerschelWalker to help raise campaign cash for the #GeorgiaRunoff. Event will feature @LeaderMcConnell and other GOP leaders.” (Twitter/Brian Schwartz of CNBC)
“K Street eyes the power of the moderates” (Politico)
“Pro-DeSantis presidential super PAC will launch after all, given Trump-supported midterm losses: ‘Ron vs. the Don. I’m here for it’” (Insider)
“Forget Trump, Ted Cruz May Be the Biggest Loser of the Midterm Elections” (The Daily Beast)
“PAY TO PLAY: POLITICO Defense Summit sponsors Lockheed Martin, Raytheon, and Improbable U.S. Defense & National Security buy the chance to lead ‘executive conversations’ on ‘the future of [American] defense, national security, and democratic ideals’ at tomorrow’s event.” (Twitter/Taylor Giorno of OpenSecrets)