Recipients of Bankman-Fried's Political Donations Should Return Money, Legal Experts Say

From WWW.THEEPOCHTIMES.COM

Former FTX CEO Sam Bankman-Fried’s significant contributions to Democratic candidates and groups have drawn scrutiny, adding to the mounting woes faced by the disgraced crypto boss.

Most of the money was sent by Bankman-Fried to political action committees (PACs), with over $38 million going to liberal groups in 2022, with another $990,000 in individual campaign donations going to candidates directly, according to campaign finance watchdog Open Secrets.

But the PAC money was also used to support individual candidates, with $24,246,001 going in direct support of Democrat candidates.

At least $29 million of the $38 million in PAC money came from addresses in Nassau, the capital of The Bahamas, according to an analysis of Federal Election Committee (FEC) data by The Epoch Times, raising concerns about the source of the funds, according to legal experts.

Bankman-Fried and other executives have allegedly failed to account for a “substantial” amount in assets missing from FTX, according to accounts filed with the U. S. bankruptcy court.

The task of tracing the money is made more complicated because the Bahamas is a well-known domicile for those who wish to avoid regulatory and governmental scrutiny for taxes and asset protection.

In 2016, the International Consortium of Investigative Journalists (ICIJ) leaked a database of nearly 170,000 registered companies in the Bahamas and named well-known Western politicians, U. S. businessmen, and others who had secret ties to companies in the Bahamas, unknown to their home governments.

Jeffery Robinson, author of “The Sink: Crime, Terror, and Dirty Money in the Offshore World,” said that the Bahamas has always talked a good game about cracking down on illegal money.

“That message has always been, ‘We’re going crack down on money dirty money. And believe me, we don’t want dirty money on the island…Unless we are discreet about it, then we can work out a way that no one will ever find out,’” Robinson told The Epoch Times about why people choose the Bahamas as a banking destination.

Legally, then, the U. S. government could find it very difficult to untangle the accounting to figure out where the money Bankman-Fried donated to the politicians originally came from, said Robinson.

“That’s why the offshore world exists exactly. That’s why the offshore world has flourished,” said Robinson.

“The money that went to the crypto regulators [running for office], has a money trail. You’ve got to obliterate that money trail. Where did the money come from? That [answer] is in the Bahamas. And that’s going to be a problem to figure out,” added Robinson.

Bankman-Fried recently appeared at New York Times Dealbook Summit to respond to the alleged problems at FTX, including allegations that the firm used customer funds to fund loans and cover speculative losses at Alameda Research, a crypto hedge fund established by Bankman-Fried.

Throughout the Q&A session, Bankman-Fried said that he was either unaware of improprieties or made honest mistakes

In addition to the donations that came from Bahamian addresses by Bankman-Fried, 13 donations to state Democratic parties came from addresses in Hong Kong, where FTX was previously headquartered, according to FEC data analyzed by the Epoch Times.

Legal experts told The Epoch Times that at the very least, Bankman-Fried’s political donations, which many say were part of an effort to influence lawmakers, combined with the foreign address as a possible source of funds, should have raised red flags for campaign officials.

In a bankruptcy filing, John J. Ray III, a bankruptcy specialist, who was appointed CEO of FTX said, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

Ray also charged that “a substantial portion of [FTX assets] may be missing or stolen,” adding that a “comprehensive, transparent and deliberate investigation into claims against Mr. Samuel Bankman-Fried” is one of the five core objectives of the bankruptcy.

Several top Democrats have suggested that they should donate the money contributed by Bankman-Fried to their campaigns to various charities.

Beto O’Rourke, the recently lost to Republican incumbent Greg Abbott in Texas’ gubernatorial race, returned a donation of $1 million by Bankman-Fried days before election day, said O’Rourke spokesman Chris Evans.

Legal experts said that the money should either go back to the original accounts or the campaigns should consult with the bankruptcy court in New York that is assigned the FTX case as to the best place to send funds to help depositors or investors get their money back.

The National Legal and Policy Center (NLPC), which concentrates on ethics issues in Washington, said that they are worried that deep impropriety, if not outright illegality, in the FTX case could get buried in the political tangle, while depositors get burned.

“So far it looks like there’s a lot of irregularities, perhaps deep illegalities going on here that need to be investigated,” Paul Kamenar, NLPC’s chief legal officer, told The Epoch Times.

“And that’s why we’re asking that these PACs return the money to the bankruptcy trustee in order to make right some of the customers who were ripped off,” added Kamenar.... (Read more)

Submitted 66 days ago


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