How Much Political Power Did SBF’s Millions Buy?
Molding crypto regulation, one donation at a time.
Just about everyone I rang in D.C. this week started the call by insisting that no, actually, they didn’t know the guy. Sam Bankman-who? This was surprising. SBF was the town’s buzziest megadonor. He’d given tens of millions to federal candidates and groups; Politico had called him an “aspiring Washington kingmaker.” So I pressed a little on the members of Congress, highpowered operatives, fundraisers, etc., whom I was speaking with. Okay, most admitted, they’d talked—but never in person. Prodded just a bit further, that usually turned into: Sure, yes, they’d met, but not one-on-one.
The politicians—mostly, but not exclusively, Democrats—who have taken Bankman-Fried’s money are feeling embarrassed right now, and many are trying to wash their hands of it. Senator Kirsten Gillibrand of New York said she would hand off her share to a charity, as did Senator Dick Durbin of Illinois, as did Illinois representative Chuy García, as did Republicans like Oklahoma representative Kevin Hern.
It’s one of the most abrupt reversals in recent Washington history, which is saying something, given recent Washington history. Just days before FTX filed for bankruptcy and people started wondering whether Bankman-Fried could go to prison, he was actively leveraging his status as a mogul. At the Capitol Hill townhouse his operation purchased, leaders of progressive groups he’d funded mingled with others who wanted in on future rounds of largesse. Republicans gathered there, too, encouraged by the more than $20 million that FTX’s GOP-friendly partner, Ryan Salame, had dispensed this election cycle. All are now trying to figure out who it was they just spent several feverish months cozying up to. Had BankmanFried been a once-in-a-generation power broker motivated by effective altruism? Had he simply been a gullible mark—an ATM for Washington’s voracious consultant-and-fundraiser class? Was he just another cynical tycoon buying off the system to write regulations that favored his companies? Some unseemly combination of all the above?
There’s evidence for all of it. BankmanFried emerged out of nowhere to give proBiden efforts $11 million in 2020 and looked to be inching toward true superdonor status with a push early in the 2022 cycle. By the summer, he was popping up in person all over Washington: at sessions with lawmakers on Capitol Hill, in small meetings with strategists, at huge gettogethers with supplicants. “We’d not seen this before,” says a top Democrat who has worked with the party’s leading donors for decades. “This is not how Soros operates—he has a political team. I’ve seen George Soros in person once!”
Even when Bankman-Fried’s grandest promises faded—he walked back a boast that he’d spend $1 billion to keep Donald Trump out of office, saying it had been a “dumb quote”—plenty of Democrats still thought they could nurture the 30-year-old as a benefactor for the long haul. “I never thought about whether he’d spend $1 billion or $500 million,” says a senior party strategist who had been feeling out Bankman-Fried’s orbit. “If he even spent 25 percent of that, it’d still be a significant sum.”
In Washington, Bankman-Fried relied heavily on his ambitious younger brother turned D.C. fixer, Gabe Bankman-Fried, to build up an operation that grew to include dozens of lobbyists, strategists, and comms specialists. Their stated goal—the issue they supposedly cared about the most—was pandemic preparedness. Sam and Gabe seemed to have a passion for it, and they pushed hard to include huge gobs of funding in Biden’s Build Back Better plan. The effort failed, and though they kept spending heavily on the issue, many observers understood it as a front for Sam’s presumed real objective: molding crypto regulation.
He made no secret of his preference for a system where the relatively friendly Commodity Futures Trading Commission, not the Securities and Exchange Commission, oversaw his industry. And there wasn’t much subtlety to some of his donations. Among the individual recipients of his big cash infusions this past cycle were the Republican senior senator of Arkansas, John Boozman, who wasn’t facing a competitive race for reelection but who co-wrote regulation trying to empower the CFTC to oversee crypto, and Gillibrand, who wasn’t even up for reelection but supported that push as well. He hired a handful of high-powered operatives and lobbyists from both parties, including Mark Wetjen, the former acting chief of the CFTC.
Some looked at the moves and saw the actions of an “idiot dilettante,” in the words of one operative who spoke anonymously and with some large measure of hindsight. Yet there’s a case for that too. BankmanFried and his brother gave more than $10 million—an unheard-of sum—to Carrick Flynn, an effective altruist running for Congress in Oregon. Flynn was a newcomer in a tight primary. Bankman-Fried and his consultants fielded frustration from members of the Congressional Hispanic Caucus, who were supporting a candidate named Andrea Salinas. After the confrontation, few of those lawmakers could believe it when Bankman-Fried and his crew tried to assuage them in the bluntest way possible: with direct, unsolicited donations to their campaign accounts in the ensuing months. “They were like, ‘Hey, we’re sorry, we’re not anti-Latino, here’s some checks,’” recalled one congressman. Salinas crushed Flynn.