Progressives tell politicians to give up fraudster's funny money

A group of progressive Democrats is calling on three New Jersey congressmen to give up campaign contributions that they accepted from Sam Bankman-Fried, the FTX crypto currency exchange founder who was arrested today in the Bahamas.

“Only months before the FTX crypto currency exchange crashed into reality, resulting in criminal charges against funny-money founder Sam Bankman-Fried and a multi-billion dollar bankruptcy, three New Jersey congressman greedily accepted campaign contributions from more than $70 million distributed by executives of the company,” said Lisa McCormick, the progressive candidate who challenged US Senator Robert Menendez in the 2018 Democratic primary election.

“While FTX was handing out cash, Josh Gottheimer collected $11,600, Cory Booker received $11,400, and Frank Pallone got a combined total of $7900, $2900 directly plus $5000 directed to his Shore PAC, according to records from the Federal Election Commission,” said McCormick, who posted a petition online asking residents to join her call for the politicians to divest the dirty money.

McCormick said, “Gottheimer, Booker and Pallone should atone for this poor judgment in two ways. They should divest themselves of the dirty money immediately, by turning it over to Democrats for Change, and they should sponsor legislation to ensure cryptocurrency is regulated by the Securities and Exchange Commission.”

U.S. Attorney Damian Williams said Bahamian authorities arrested Bankman-Fried at the request of the U.S. government, and in the morning his office would move to unseal an indictment filed in the Southern District of New York.

Bankman-Fried made $38,421,700 in federal campaign contributions, according to the FEC, while another top FTX executive, Ryan Salame, doled out $23,986,800.

Bankman-Fried primarily gave money to Democrats while Salame donated mainly to Republicans. Other individuals associated with the company gave candidates a total of $8,262,750, according to FEC records.

Investigators want to know whether FTX used customer funds to finance Bankman-Fried’s investment firm, Alameda Research, but the 30-year-old has said he made grave mistakes but has denied any malicious wrongdoing.

"While the federal gift statute (5 U.S.C. § 7353) prohibits Members of Congress & their staff from soliciting anything of value from virtually anyone, it does not stop them from directly asking for cash contributions," said McCormick. "America should Outlaw Bribery in all forms!"

"Spending in federal and state races in the 2022 elections is expected to top $16.7 billion, so do not be surprised that Wall Street, K Street & Silicone Valley are getting what they paid for," said McCormick.

Bankman-Fried’s arrest came just a day before he was due to testify in front of the House Financial Services Committee, along with the company’s current CEO, John Ray III.

Bahamian Attorney General Ryan Pinder said the Bahamas would “promptly” extradite Bankman-Fried to the U.S. once the indictment is unsealed and U.S. authorities make a formal request. Meanwhile, Bahamian authorities plan to continue their own investigation into Bankman-Fried.

“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” Bahamian Prime Minister Phillip Davis said in a statement.

FTX was headquartered in the Bahamas, and since its failure Bankman-Fried has remained in his luxury compound in Nassau.

Separately, the Securities and Exchange Commission said it also plans to file charges Tuesday against Bankman-Fried for violating U.S. securities law.

Bankman-Fried, who was one of the world’s wealthiest people on paper, went from king of cryptocurrencies to his arrest in a month. FTX was the second-largest cryptocurrency exchange in the world before it went bankrupt, but the exchange intermingled customers deposits with its investment arm, Alameda Research..

Gottheimer held a roundtable at Ramapo College of New Jersey in September with Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam and entrepreneurs and leaders from asset management firms, banks, crypto exchanges, trade associations, and digital asset lenders including Blackrock, Grayscale, Fidelity, Anchorage Digital, BNY Mellon, Apex Crypto, Coinbase, FTX, Uniswap, Crypto Council on Innovation, and Genesis Global Lending..

One of the most prolific fundraisers in Congress, Gottheimer also sponsored legislation to 'move the ball forward for digital assets' by subjecting crypto currency to weaker enforcement measures preferred by the industry instead of stronger oversight by an agency like the Securities and Exchange Commission.