Several Minnesota politicians received campaign contributions from executives associated with the sprawling FTX empire ahead of the recent implosion in cryptocurrency exchanges.
The money allocated to local campaigns was just a small part of the nationwide pre-midterm spending spree of then-FTX CEO Sam Bankman-Fried and FTX Digital Markets co-CEO Ryan Salame. While Bankman-Fried’s spending in Minnesota went to Democrats, Salames’ dollars went to Republicans.
In Minnesota’s premier congressional race in the Swing district, which includes suburbs south of the Twin Cities, Democratic US Rep. Angie Craig’s campaign received two donations from Bankman-Fried, federal campaign funding records show.
“My campaign received and spent $5,800 in campaign funds from Sam Bankman-Fried during our last election,” said a statement from Craig, who defeated Republican Tyler Kistner to win a third term. “The crypto space has remained largely unregulated, and with that lack of oversight comes serious risk. Congress needs to do more to regulate this industry and better protect consumers.”
A spokeswoman for Craig’s campaign said earlier this week that she has no plans to donate Bankman-Fried’s money. Craig sits on the House Agriculture Committee and the Energy and Commerce Committee.
Democratic US Senator Tina Smith’s campaign also received $5,800 from Bankman-Fried, though she did not stand for re-election and her seat won’t be on the ballot until 2026. In a statement, Smith said she will donate the contributions to a nonprofit organization. Smith serves on the Agriculture Committee and the Senate Committee on Banking.
“I have serious concerns about crypto and the financial risks it poses to retail investors, which is only underscored by events at FTX,” Smith said. “It’s clear we need to think carefully about how crypto is regulated and how best to protect consumers and the economy.”
The Associated Press reported that FTX and Bankman-Fried are under investigation by the Securities and Exchange Commission and the US Department of Justice.
OpenSecrets, a nonprofit organization focused on money in politics, reported that Bankman-Fried, Salame and FTX Director of Engineering Nishad Singh have collectively donated about $70 million this election cycle.
While Bankman-Fried spent a lot of money on Democrats, some money also went to Republicans, according to OpenSecrets. The GOP narrowly seized control of the US House of Representatives in the midterms while the Democrats held on to the US Senate.
Bankman-Fried’s top spending included $6 million for the Democrat-led House Majority PAC at one point earlier this year and $250,000 for the Democratic Campaign Committee, according to federal financial reports. The Minnesota DFL Party received several hundred dollars from Bankman-Fried in 2020 and nearly $10,000 in August of this year. A party spokesman declined to comment.
According to OpenSecrets and campaign funding data, Salame was a big GOP donor. His notable donations included $2 million to the Republican-focused House Congressional Leadership Fund.
Bankman-Fried and Salame together donated more than $100,000 to the National Republican Congressional Committee (NRCC), the campaign arm chaired by US Rep. Tom Emmer of Minnesota. The NRCC declined to comment, and Emmer’s campaign did not respond to a request for comment about several thousand dollars it received from Salame.
Emmer, who is expected to have strong influence next year as the third-seat Republican in the House of Representatives, has been a vocal advocate for cryptocurrency. In March, he was one of eight members of Congress to sign a bipartisan letter to the Securities and Exchange Commission questioning its requests for information about cryptocurrency and blockchain firms.
Emmer said in a tweet thread about the letter that his office has “received numerous indications from crypto and blockchain firms that SEC Chairman @GaryGensler’s “requests” to the crypto community are overloaded, don’t feel particularly…voluntary…and stifle innovation “.
During a recent appearance on Fox businessEmmer – who sits on the House Committee on Financial Services – called the FTX collapse “a failure of centralized finance and a failure of Sam Bankman-Fried.”
Federal campaign records also show that the Salame-funded American Dream Federal Action political committee spent more than $1 million in outside independent spending to win Republican Rep. Brad Finstad for the first congressional district seat in southern Minnesota in his first special election in May to support.
Finstad won the tight competition, which also saw other outside spending focused on either his run or that of state GOP Rep. Jeremy Munson. Finstad later won a special general election for the seat and was victorious in his bid for a full term earlier this month. Salame donated $2,900 to the campaign for Finstad, who sits on the House Agriculture Committee, in September.
“We exercise due diligence when the campaign receives a donation to verify that it meets Federal Election Commission guidelines,” Finstad campaign spokesman David FitzSimmons said in an email. “As things stand, the donation in question has been refunded. With respect to independent spending, the action has nothing to do with independent spending as a matter of law.”
David Schultz, a political science professor at Hamline University, said the scale of the donations and the scramble to return them goes to the root of how money is raised and spent on political campaigns in the US. With crypto, he said, some jurisdictions have already raised questions about ill-gotten gains and money laundering.
“There are enough red flags,” said Schultz. “The candidates should have known about these issues, but they did nothing. They just jumped on the bandwagon.”
The Associated Press contributed to this report.