Several Minnesota politicians received campaign donations from executives involved with the sprawling FTX empire before the cryptocurrency exchange’s recent implosion.
Money pouring into local campaigns was just a small part of the nationwide spending spree ahead of the midterm elections by Sam Bankman-Fried, then-CEO of FTX, and Ryan Salame, co-CEO of FTX Digital Markets. While Bankman-Fried’s spending in Minnesota went to Democrats, Salame’s dollars went to Republicans.
In the main congressional race in Minnesota’s swing district, which includes suburbs south of the Twin Cities, Democratic U.S. Representative Angie Craig’s campaign received two donations from Bankman-Fried, according to federal campaign finance records.
“My campaign received and spent $5,800 in campaign contributions from Sam Bankman-Fried in our last election,” according to a statement from Craig, who defeated Republican Tyler Kistner to win a third term. “The crypto space has been left largely unregulated, and this lack of oversight poses a serious risk. Congress needs to do more to regulate this industry and better protect consumers.”
A spokeswoman for Craig’s campaign said earlier this week that she had no plans to donate Bankman-Fried’s money. Craig serves on the House Agriculture Committee and the Energy and Commerce Committee.
U.S. Democratic Senator Tina Smith’s campaign also received $5,800 from Bankman-Fried, although she was not re-elected and her seat will not be on the ballot until 2026. In a statement, Smith said she would donate the contributions to a non-profit organization. . Smith sits on the Agriculture Committee and the Senate Banking Panel.
“I have serious concerns about crypto and the financial risks it presents to retail investors, which is only underscored by what happened at FTX,” Smith said. “Clearly we need to think carefully about how crypto is regulated and how best to protect consumers and the economy.”
The Associated Press reported that FTX and Bankman-Fried are under investigation by the Securities and Exchange Commission and the US Department of Justice.
OpenSecrets, a nonprofit focused on money in politics, reported that Bankman-Fried, Salame and FTX engineering director Nishad Singh together donated about $70 million this cycle. electoral.
While Bankman-Fried spent a lot on Democrats, according to OpenSecrets, some of the money also went to Republicans. The GOP narrowly regained control of the US House midterm, while the Democrats retained the US Senate.
Bankman-Fried’s major expenses included $6 million for the Democratic-aligned Majority PAC at some point earlier this year, and $250,000 for the Democratic Congressional Campaign Committee, according to funding reports. federal campaigns. The Minnesota DFL Party received several hundred dollars from Bankman-Fried in 2020 and nearly $10,000 in August of this year. A party spokesman declined to comment.
Salame was a big GOP spender, according to OpenSecrets and campaign finance data. Among his major donations was $2 million to the House Republican-focused Congressional Leadership Fund.
Together, Bankman-Fried and Salame donated more than $100,000 to the National Republican Congressional Committee (NRCC), the campaign arm chaired by Minnesota U.S. Representative Tom Emmer. The NRCC declined to comment, and Emmer’s campaign did not respond to a request for comment on several thousand dollars received from Salame.
Emmer, who is expected to have a strong influence next year as the third House Republican, has been a strong supporter of cryptocurrency. In March, he was one of eight members of Congress to sign a bipartisan letter to the Securities and Exchange Commission questioning their demands for information about cryptocurrency and blockchain companies.
Emmer said in a tweet thread about the letter that his office had “received extensive advice from crypto and blockchain firms that SEC Chairman @GaryGensler’s disclosure ‘requests’ to the crypto community are damning , don’t feel particularly…willing…and stifle innovation.
In a recent appearance on fox businessEmmer — who sits on the House Financial Services Committee — called FTX’s collapse “a failure of central finance and a failure of Sam Bankman-Fried.”
Federal campaign records also show that the Salame-funded political committee, American Dream Federal Action, spent more than $1 million in independent outside spending to support Republican U.S. Representative Brad Finstad in his first special primary race in May for the seat of the first congressional district of southern Minnesota.
Finstad won the tight contest that also saw other outside spending focused on his race or that of state GOP Rep. Jeremy Munson. Finstad then won a special general election for the seat and won his bid for a full term earlier this month. Salame donated $2,900 in September to the Finstad campaign, which sits on the House Agriculture Committee.
“We do due diligence when the campaign receives a donation to verify that it meets Federal Election Commission guidelines,” Finstad campaign spokesman David FitzSimmons said in an email. “Based on current news, the donation in question has been returned. With respect to independent spending, the campaign, by law, has nothing to do with any independent spending.”
David Schultz, professor of political science at Hamline University, said the scale of donations and the scramble to return them are driving how money is raised and spent on US political campaigns. With crypto, he said, some jurisdictions have already raised questions about ill-gotten gains and money laundering.
“There are enough red flags,” Schultz said. “The candidates should have been warned about these issues, but they did nothing. They kind of jumped on the bandwagon.”
The Associated Press contributed to this report.
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