SBF’s McConnell Money Tickle

In the final months of this year’s midterm cycle, the teams behind Sam Bankman Fried and FTX began to worry about a Republican takeover of Congress that would leave it badly positioned in Washington, I’m told. SBF, after all, had spent around $40 million primarily to spur Democrats, and as CEO of FTX – the largely unregulated and now bankrupt cryptocurrency exchange – he could see this was likely to go wrong. be a liability in a GOP-led legislature. It was saying all the good things about his desire to be bipartisan. But there was no doubt that he looked, at least on paper, like another Democratic mega-donor.

This impending image problem was why, in the final days of the election season, FTX cut a recently leaked million dollar check to the senator. Mitch McConnellis the main super PAC. The donation was effectively another way of “hedging the bet,” according to a person familiar with the FTX team’s thinking. The SBF-FTX team “seemed quite confident that [McConnell] would be the majority leader and there would be a big margin in the House. This also explained why in the middle of this year, FTX hired Paula Dukesa top Republican fundraising strategist with close ties to the leadership of Congress, to join the company and SBF’s campaign to develop “a Republican monetary strategy” to make inroads to the right and “have more parity”.

Bankman-Fried’s little-known strategy for playing both sides was made public this week after he noticed that he believed he gave “about the same amount” of money to Republicans this cycle as he did to Democrats, but chose to donate to the right through “dark money” undisclosed so the media doesn’t “freak out”. That comment raised eyebrows all over the GOP fundraising world, as well as in Democratic circles, especially as SBF has come under relentless attack in conservative media for its ties to the left. . “Is that true, do you think? Or is he doing bullshit? a senior Democratic official asked me, a question I’ve received repeatedly from top Democrats and top Republicans privately over the past 48 hours.

I find it very hard to believe that SBF’s donations to Republicans match his donations to Democrats – he was the second largest disclosed donor to Democrats in the 2020 cycle at $40 million – and sources close to SBF don’t think not that it’s true, either. More likely, SBF was speaking vaguely and hyperbolically, as he tends to do. But he is true that in the sprint, SBF aides to FTX and his personal team of donor advisors began transferring significant funds to GOP-aligned groups, typically to entities affiliated with the Republican leadership, I was told. we say. Some of that money came from disclosed vehicles, like McConnell’s Senate Leadership Fund. But some of them weren’t.

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Although Fox News rips SBF as George Soros-lite, liberal mega-donor, SBF politics is best understood as a cocktail of Josh Gottenheimer, Elon Musk and Maxwell Frost. He didn’t seem to care much about traditional Democratic Party priorities — abortion rights, income inequality, criminal justice reform, and so on. – but rather gargantuan and chimerical targets such as international poverty, climate change and, of course, his favorite problem, prevention of the pandemic. As founder and CEO of what was then the second largest crypto exchange in the world, he also focused on shaping crypto policy and regulation in Washington. Much of his efforts outside of philanthropy were aimed at investing in politicians themselves – Democrat Kirsten Gillibrand of New York, Republican John Hoeven of North Dakota and Republican John Boozman of Arkansas, among others, who served on the relevant committees overseeing the industry.

Naturally, part of this protective strategy was to cultivate relationships with the right. Although Sam’s pandemic prevention lobby group endorsed about 15 Republicans in their primaries, his affiliated super PAC spent almost all of its money on Democrats. And so, over the summer, SBF made sure to start spreading the love: he and FTX spent $200,000 on Katie Britwho was running in a competitive GOP primary for the Alabama Senate nomination, and FTX donated $750,000 to the Congressional Leadership Fund, the super PAC run by allies of Kevin McCarthy. Just before election day, SBF caught on Twitter to make sure people were aware of his Republican good faith, noting the “millions” he gave to Senate and House Republicans to “bring a bipartisan climate to DC” and criticizing the “restrictive mandates” on Covid.

Meanwhile, one of the SBF’s top lieutenants, Ryan Salame, invested $15 million in its own super PAC that backed Britt, Boozman and other GOPers in their competitive primaries. Salame, later in the cycle, gave another $2.5 million to McConnell’s super PAC and $2 million to McCarthy’s. Of course, Salame’s contributions were separate from SBF’s, but I was told that SBF’s team of (mostly Democratic) advisers often weighed in on Salame’s donations. It’s possible, as multiple sources have speculated, that when SBF talked about transferring large amounts of black money to Republicans, he was actually referring to Salame donations. After all, in the end, it all happened within the same FTX-affiliated political machine. Perhaps SBF spoke somewhat imprecisely about “black money”.

Obviously, SBF’s credibility is more than a little shaky right now. But I did confirm that he and FTX were making last-minute contributions to conservative causes, mostly for regulatory hygiene reasons. I’m sure there will be more contributions to be released in the coming weeks. There are also black money contributions that can never really be disclosed, especially as SBF began to move away from public giveaways as it faced intense scrutiny later in the campaign cycle. “One of their takeaways from Carrick Flynn had vehicles that could be traced back to them was a big mistake,” said a person close to their pandemic preparedness operation, referring to the huge $12 million that SBF poured into Flynn’s losing congressional campaign in Oregon and backfired in spectacular fashion.

Anyway, I understand from conversations with sources that if SBF was indeed making contributions to Republicans through dark money vehicles, it was still far short of the amount it was spending on behalf of the Democrats. No, he was not the nation’s third-largest donor to Republicans. But before it all fell apart, SBF intended to be a major player in Washington — and bipartisanship, he hoped, would be a key brand. He wanted a piece of everyone. Now, of course, everyone in Washington wants a piece of him.