Oregon Dems' Ticking Timebomb
A mysterious $500,000 donation that helped elect Tina Kotek is the subject of a suspect state investigation - The Fagan Files, Part II.
This article details the facts surrounding a mysterious $500,000 donation made to the Democratic Party of Oregon on October 4, a month before Oregon’s governor election. Democrats now say the donation came from an associate of alleged crypto fraudster Sam Bankman-Fried. Federal and state investigations, the latter under the purview of Oregon Secretary of State Shemia Fagan, into the donation are underway. This will serve as the second installment of the Fagan Files, although as I wrote it she became but one of several key figures. The Fagan Files I is here.
The first week of October 2022 was perhaps the low point of the general election for Tina Kotek, the Democratic nominee for Oregon governor. Emerson College released a poll October 4 showing Kotek’s GOP opponent, Christine Drazan, leading Kotek by four points. The Emerson poll, along with other polls from less nationally recognized firms also showing Drazan with a lead, placed the Oregon governor’s race firmly on the national political radar. The unthinkable - that Oregon might elect a Republican governor in 2022 - seemed plausible, even more likely than not, on October 4.
That same day, one of Kotek’s most generous financial supporters, the Democratic Party of Oregon (DPO), received its largest-ever reported contribution in the amount of $500,000. As required by Oregon campaign finance laws, the DPO reported the donation online to the Secretary of State’s office. The DPO told the state that the donor was Prime Trust, LLC, a Nevada company that, according to its website, provides advice to crypto currency firms regarding compliance with government regulations.
Two days after receiving the donation, the DPO donated $350,000 cash to Tina Kotek’s governor campaign, according to state filings, matching its largest contributions to Kotek of the cycle.
Separately, the DPO paid for a mailer attacking Drazan, listing Living Trust, LLC as a donor.
The Oregonian newspaper took note of the huge contribution from an obscure Nevada company. What interest did Prime Trust have in Oregon politics, and perhaps in the governor’s race which was the focus of the DPO in early October? Following repeated inquiries by The Oregonian, the DPO on October 31 amended its donation filing to show that the contribution had actually been made by Nishad Singh, Director of Engineering for a company named FTX New Providence of New Providence, Bahamas.
FTX New Providence is one of a host of crypto currency related businesses linked to Sam Bankman-Fried, the notorious once-billionaire whom the U.S. government has charged with eight counts of wife fraud, money laundering and campaign finance violations. Bankman-Fried was the second-largest donor to Democratic candidates and causes in the 2022 midterm elections nationally, according to donations made and reported in his name. The U.S. DOJ is investigating whether Bankman-Fried illegally funneled money to associates to make donations in their names. Reportedly, Nimad Singh, the putative $500,000 DPO donor, may be cooperating with the DOJ in its investigation.
This was not the first foray of the Bankman-Fried team into Oregon politics. Carrick Flynn, a political newcomer, raised millions in his quest for the Democratic nomination for Oregon’s new 6th Congressional District. Flynn’s largest supporter, Protect our Future PAC, spent at least $11 million on his behalf in the spring of 2022. The biggest donor to Protect our Future PAC, we now know, was Bankman-Fried, to the tune of $13 million. Nimad Singh, according to the PAC’s amended filings with the Federal Elections Commission, gave Protect our Future $1 million.
Following a familiar pattern, Protect our Future PAC had originally reported its $14 million in donations as coming from Living Trust, LLC. Yes, that Living Trust, LLC. It was only after reporting by political news site Politico and a public disavowal by Living Trust that Protect our Future PAC amended its FEC filings to show Bankman-Fried and Singh as the actual donors.
Bankman-Fried’s involvement in Oregon politics did not go unnoticed. On April 12, Flynn’s Democratic opponents held a rare joint press conference to decry outside funds benefiting his campaign, including donations from Bankman-Fried and from then-Speaker Nancy Pelosi’s leadership PAC. Then, on April 19, Politico broke the story about Protect our Future’s amended FEC filing.
In other words, months before the Oregon Democratic Party reported the $500,000 donation as coming from Living Trust, LLC, it was publicly known that the company had served as a pass-through for contributions actually from Bankman-Fried and Singh to Oregon political causes. Nonetheless, the DPO, like Protect our Future PAC, originally reported the donation as coming from Living Trust, LLC, and only amended that filing under media scrutiny.
Oregon law, like federal law, criminalizes making unreported political donations via a third party. Knowingly accepting and knowingly misreporting those donations also bears potential criminal penalties under state law. The state agency investigating the potential criminal implications: the Elections Division of Shemia Fagan’s Secretary of State’s office. The same Elections Division that was until recently directed by Deborah Scoggin until she was forced to resign by Fagan.
According to The Oregonian, the DPO has donated $424,000 to Fagan’s Secretary of State and prior state legislature campaigns. Fagan’s spokesperson told The Oregonian, “Secretary Fagan is very careful to avoid any perceived conflicts of interest by not involving herself directly in the investigation of elections complaints[.]” Fagan’s approach to avoiding actual rather than perceived conflicts of interest was not addressed by the spokesperson.
Fagan’s investigation, along with a federal investigation into the $500,000 DPO donation putatively from Singh, hold potential high stakes for the DPO. FTX has indicated its debtors will, as part of FTX’s bankruptcy proceeding, seek return of some or all political donations made by Bankman-Fried and his associates. Some recipients have voluntarily returned such contributions, including the national Democrats’ Senate Majority PAC, which last month turned over to the bankruptcy estate $1 million it received from Bankman-Fried and $2 million from Singh.
The DPO has not said publicly whether it intends to return the funds to FTX creditors. Doing so, either willingly or otherwise, may be impossible in any event. As of the morning of January 18, 2023, the Democratic Party of Oregon reports that it has $202,198.47 cash on hand.
The $500,000 donation — its source, its reporting, the investigation of it, its possible return, and its effect on the outcome of the governor’s race — holds enormous and far-reaching implications for the Democrats who control Oregon’s state government. Shemia Fagan wants Oregonians to believe that her office is capable of conducting an impartial and thorough investigation into the donation. That she will ensure the law is followed whatever the legal and political fallout for her close party allies and for herself.
Based on what we know of Fagan’s history with the Elections Division, never mind of plain human nature, she asks too much. Kotek, Fagan and fellow Democrat, and Democratic Party of Oregon funder, Attorney General Elieen Rosenblum must appoint an outside, apolitical, prosecutor unaffiliated with the DPO, to investigate the $500,000 donation. Only then should Oregonians rest assured, regardless of the outcome of the investigation, that justice has been done by our state.
Please note that no State of Oregon official or Democratic Party of Oregon official has been charged with any crime associated with the $500,000 donation as of this writing.
Excellent reporting. Thank you for shedding light on this!
Something tells me we've not seen the final installment of Fagan Files.
"Fagan, a Democrat, insists the delay in making the website live had nothing to do with protecting special interests. 'The largest fines issued under my administration were to some of my political allies,' Fagan says. 'These fines show that Oregonians can trust me to apply the rules fairly and equally to everyone.'"
https://www.wweek.com/news/2023/01/18/shemia-fagan-and-her-elections-director-disagreed-about-disclosing-campaign-finance-violations-here-they-are/