Bankman-Fried's role in '22 Oregon elections illuminated by federal court cases
Oregon DOJ still mum on whether it will investigate possible Oregon law violations
Two high-profile legal cases unfolding on the east coast shed new light on disgraced former cryptocurrency CEO Sam Bankman-Fried and his family’s influence over Oregon politics in the 2022 election. Bankman-Fried, his family and business associates spent upwards of $1 million in 2022 to influence races from the hotly contested governor’s race to a southern Willamette Valley congressional contest.
In the pending cases, prosecutors and plaintiffs allege the Bankman-Fried clan engaged in a far-reaching conspiracy to affect election outcomes with fraudulently sourced political contributions. They mirror one confirmed and one potential investigation by the Oregon Department of Justice into potential campaign finance wrongdoing that have largely disappeared from public view.
Bankman-Fried’s former company, now-bankrupt crypto currency firm FTX, last week filed a civil lawsuit against his parents, Joseph Bankman and Barbara Fried, alleging the couple profited personally from orchestrating and facilitating Bankman-Fried’s alleged fraud against FTX depositors. In the process, the suit alleges, Bankman and Fried directed Bankman-Fried to hide political contributions originating from him or FTX or its subsidiaries by falsely reporting the contributions were from FTX’s then-head of engineering Nishad Singh.
This scheme appears to have had a big impact on Oregon politics. Singh donated $500,000 to the Democratic Party of Oregon (“DPO”) on October 4, 2022, just as Democrats’ decades-long hold on the state’s governor’s office appeared in danger, with polling then showing Republican Christine Drazan pulling ahead of Democrat Tina Kotek. The Singh donation was the largest ever received by the DPO and was used at least in part to help Kotek, who went on to win the race for governor in the November general election.
Reporting by this here Oregon Roundup showed the Singh contribution was arranged and facilitated by the fundraising consultant for Oregon’s senior U.S. Senator and chairman of the powerful Senate Finance Committee Ron Wyden. The consultant included DPO employees, and other Wyden staff, in emails to determine whether the reported source of the contribution should be Singh or Prime Trust, the crypto currency bank from which the wire transfer to the DPO would initiate. The response, from an FTX lobbyist:
“Nishad prefers Prime Trust (though not strongly) so go w[ith] that.”
Upon that one tepid sentence hangs the entire legal defense of the DPO, to the degree it requires a legal defense these days. The Oregon Secretary of State, who had original responsibility for investigating potential criminality by the DPO in accepting and misreporting the contribution, infamously dismissed its criminal investigation against the party earlier this year.
Around the same time, the Oregon Department of Justice said it was investigating potential violations of Oregon campaign finance law by Singh and just might investigate the same for the DPO. But, that was months ago and Oregon DOJ’s spokesman has gone from responding to my emails with “no update” to not responding them at all.
Oregon DOJ’s boss, Democrat Attorney General Ellen Rosenblum, who has announced she will not seek re-election next year, has been closely allied with the DPO throughout her tenure as Attorney General, including contributing hundreds of thousands of dollars to the DPO from her own campaign, and actively helping to raise yet more funds for it. Rosenblum previously said she was recusing herself from the investigation into the Singh-DPO probe because of this conflict.
The “(though not strongly)” phrasing with which FTX’s lobbyist sought to encourage the DPO to misreport the source of the contribution was echoed by Barbara Fried in an email in which she explains to her son Sam how to conceal the actual source of a contribution to the progressive super PAC she helped found, Mind the Gap (referred to as “MTG” and “our 527”):
Fried was especially concerned about concealing the true identity of the source of contributions at the state, as opposed to federal level: “Plays at the state level are going to provoke accusations of carpetbagging.”
FTX’s lawsuit against Fried and Bankman goes on to detail how funds from FTX entities were transferred to “mystery guy” Singh, who flipped those funds to Democrats and allied causes around the country. In Oregon, there were likely two distinct levels of subterfuge: (1) concealing contributions originating from Bankman-Fried or an FTX entity behind the “mystery guy;” and, (2) encouraging the DPO to misreport the source of the donation as Prime Trust, rather than Singh. The latter step contributed to the DPO’s decision to report Prime Trust as the source, which is rather like a political action committee reporting a contribution from me is actually a contribution from US Bank, because US Bank held and transmitted my funds that I directed it to transmit to the committee.
Much of the lawsuit focuses on Joseph Bankman’s influence over FTX. Bankman, like Fried who is described as his domestic partner, is a law professor at Stanford. While Fried’s interests tended overtime to the overtly political, FTX alleges in its lawsuit that Bankman used his acumen as a tax expert to guide FTX as the “adult in the room” otherwise populated by young and inexperienced executives.
Oregon Roundup readers will recall that Bankman contributed the then-federal maximum $2,500 to Wyden back in 2010, when Bankman was an expert in tax policy and Wyden was a relative back-bencher on the Senate Finance Committee. It was the first large contribution Bankman ever made to a federal candidate. Wyden and Bankman became acquainted with each other at least by 2007, when Bankman testified before the Senate Finance Committee in favor of changing a tax provision that benefitted hedge funds, a Wyden hobby horse. Just days before Bankman’s contribution to Wyden, the senator had introduced a bill that would have simplified the federal tax code, including by changing the hedge fund tax treatment.
It is unknown (to me, anyway) whether Bankman’s relationship with Wyden perhaps originating in the 2007-2010 timeframe served as a starting point for team FTX’s Wyden-fundraiser-facilitated $500,000 contribution to the DPO in 2022. Wyden’s spokesman told The Oregonian, despite the paper record that demonstrates the involvement of his campaign staff and consultant, Wyden had “no role” in the DPO contribution. I filed a complaint with the Federal Election Commission alleging Wyden violated federal campaign finance laws by directing the contribution to the DPO. That complaint is, apparently, pending.
At the same time the FTX lawsuit against Fried and Bankman gives hints of Oregon’s role in the alleged fraud of Bankman-Fried’s parents, Bankman-Fried’s criminal trial is set to begin October 3. That trial will, reportedly, feature evidence of Singh’s and Bankman-Fried’s efforts to violate federal campaign finance laws by concealing the true source of federal campaign contributions. Singh has pleaded guilty to campaign finance fraud charges and is reportedly cooperating with prosecutors and is expected to testify against Bankman-Fried.
FTX’s largesse was dumped into federal committees engaged in races in Oregon, too. Bankman-Fried helped to fund two federal PACs that played a key role in trying to win 2022 Democratic nominations (unsuccessfully) for Carrick Flynn in Oregon’s Sixth Congressional District and (successfully) for now Congresswoman Val Hoyle in Oregon’s Fourth Congressional District. In addition, Hoyle and Wyden have each handed over to federal law enforcement contributions they received directly from Bankman-Fried.
Singh’s, or whomever’s, record-breaking contribution to the DPO is unlikely to come up in the Bankman-Fried trial directly, because federal prosecutors are concerned with violations of federal law, which would have arisen from fraudulent contributions to federal, not state, political committees. However, the lawsuit and criminal trial unfolding thousands of miles away should serve as a reminder to Oregonians the role FTX and friends had in electing Oregon’s current governor, and what, if anything, the state plans to do about it.
Oregon DOJ would, I’m sure, prefer to let the Singh-DPO contribution slip from Oregonians’ memory. Most of the Oregon media has moved on to other matters. But Oregonians deserve to know whether their Department of Justice believes justice was done, under Oregon law, when the DPO willingly played along with the largest campaign finance fraud scheme in the history of the world.
With the exception of taking out Kitzhaber, after a tight election, of course, Rosenblum seems sublimely uncurious of multiple " situations"
Great reporting. Such a well reasoned argument exposing corrupt practices.