FTX stole customer funds for political donations: Testimony

Nishad Singh, who gave Oregon Dems $500k in 2022, testified yesterday how he and other FTX officials fraudulently funneled stolen customer funds to political campaigns

Nishad Singh testified yesterday that he made a $20,000 contribution in his name to the Delaware Democratic Party in 2022, using funds stolen from his employer’s customers. Delaware Dems reported the donation as coming from Singh. Singh also made a $500k donation to the Democratic Party of Oregon; the DPO misreported the donation as coming from Singh’s bank.

The courtroom of U.S. District Judge Lewis Kaplan, in Lower Manhattan, New York, was the setting yesterday for testimony with big implications for Oregon. There, Nishad Singh, the former head of engineering for FTX, the now-bankrupt crypto currency trading platform, testified about his role in funneling stolen FTX customer funds to Democratic campaigns and state parties in the months prior to the 2022 election.

Singh, or someone using Singh’s bank account, infamously wired $500,000 to the Democratic Party of Oregon (“DPO”) on October 4, 2022. The DPO quickly put those funds, the largest contribution it had ever received, to use turning out voters for Tina Kotek and other Democrat candidates. Some polling Kotek’s Republican opponent Christine Drazan with a small lead in early October; on election day, Kotek bested Drazan by 3.5%.

In New York yesterday, Singh testified that he was a fraudulent “straw donor” for contributions made by FTX to political causes in 2022. His testimony confirmed prosecutors’ contention that those donations were made using stolen FTX customer funds. Singh has pleaded guilty to federal campaign fraud charges. The feds are trying Bankman-Fried on charges including stealing from FTX customers to fuel a high-flying lifestyle and massive political donations.

The Wall Street Journal, reporting from the courtroom, says Singh testified that he, Bankman-Fried, fellow FTX executive and mega Republican donor Ryan Salame and other FTX officials were part of an internal online chat group that discussed how to direct millions in campaign contributions. The group would decide to whom to contribute and from whose account the contribution should be made. Funds would be transferred from an FTX-affiliated company to the “donor’s” account, and then transmitted via wire or check to the recipient, with the name of the middle man, not FTX, reported as the donor. Singh was the middle man for many of the FTX contributions to Democrats.

Elizabeth Lopatto, writing for The Verge, describes one chat exchange:

In one conversation, a political consultant wrote, “Can we get the $20k from @NishadSingh for the Delaware Democratic party today?” Salame replied, “On it.” Then he messaged the group telling Singh that he needed to check his email to approve the transaction, as well as five others.

The Democratic State Committee of Delaware reported receiving a $20,000 contribution via wire from Singh on October 17, 2022.

We don’t know for sure whether the 25-times-larger Oregon contribution went down the same way two weeks prior, because, apparently, Singh has not testified about the DPO contribution. Nonetheless, Singh’s testimony provides important clues about how the sausage was made for FTX-originated contributions generally.

One key difference between the Delaware and Oregon contributions is that the Delaware Dems managed to properly report that its contribution came from Singh. The DPO originally reported its $500k windfall as coming from the equivalent of Singh’s bank, Prime Trust, LLC. It was only under questioning from The Oregonian that the DPO amended its filing to show Singh as the donor, after the election. The Secretary of State’s office later, at DPO’s request, reduced the penalty for its original misreporting. The Oregon Department of Justice has said it is investigating Singh for violations of Oregon campaign finance laws; months ago, it said it was considering whether to also investigate the DPO.

Reporting by, uh, me showed the Singh contribution was arranged and facilitated by the fundraising consultant and other campaign staff for Oregon’s senior U.S. Senator and chairman of the powerful Senate Finance Committee Ron Wyden. In spite of emails in which FTX officials identified the Wyden consultant as “all things Ron Wyden” with respect to the DPO contribution, Wyden’s spokesman told The Oregonian Wyden had “no role” in arranging the donation.

Email between FTX consultant Susan McCue, FTX executive Mark Wetjen and Wyden fundraiser Diana Rogalle. “OR coordinated campaign” is the DPO’s get-out-the-vote effort, for which Wyden and other influential Oregon Dems raise money.

Singh’s admission under oath to using stolen FTX customer funds to make contributions to Democrats should make Oregon DOJ’s investigation of him easy. All they need to show is that Singh did with the DPO what he and FTX followed the same process with the DPO donation as they did with the contribution to the Delaware Democrats and, apparently, did as a matter of course. Slam dunk.

It also should remind Oregon DOJ of just how improbable it is that the DPO thought the contribution was actually from Singh’s bank, not from Singh himself, as it originally reported to state campaign finance regulators. We now know that federal prosecutors are in possession of internal FTX online chats going to the process of making, and concealing, the source of contributions made in Singh’s name. If those chats include references to the Oregon contribution, which seems likely, there is an entire new avenue of inquiry for Oregon prosecutors.

My kingdom, such as it is, for a copy of the FTX campaign finance fraud chat. At the very least, it would tell us whether the DPO donation followed the Delaware pattern. And it might just shed some light on Wyden’s involvement in arranging the contribution.

We know based on the existing email record that Wyden’s claim to have had “no role” in the DPO contribution is, to put it bluntly, a lie. We don’t know for sure whether Wyden’s role as chairman of the Senate Finance Committee, with jurisdiction over crypto, or his status as a longtime recipient of Bankman-Fried campaign contributions, influenced FTX’s decision to give big to the DPO’s get out the vote effort, for which Wyden helps the party fundraise.

The FTX fraud chat and other internal communications, presumably in the possession of federal prosecutors but not yet available to the public, probably would help explain why FTX decided to play big, so big, in Oregon.

Oregon prosecutors, Oregon and national media, crypto regulators and Oregon voters all should be pretty curious about a story that ties a powerful committee chair and would-be regulator to a not-very-well-regulated industry that spawned one of the largest bankruptcies, if not the largest, in American history and formed the nexus by which a company in its death throes managed to separate $500,000 from its customers to help make Tina Kotek governor.

Oregon’s DOJ, the spokesman for which no longer returns my emails, has not commented on its investigation of Singh or whether it will probe the DPO too, in months.