Failed Texas gubernatorial candidate Beto O’Rourke still has $100,000 his campaign raked in from Sam Bankman-Fried despite the Democrat claiming he returned the disgraced cryptocurrency kingpin’s $1 million donation in full, according to records.
O’Rourke’s campaign said in November 2022 that it handed the “unsolicited” donation back to Bankman-Fried, who in January pleaded not guilty to eight charges, including money laundering and certain fraud, after his company FTX allegedly nabbed billions of dollars from its customers. O’Rourke’s campaign, however, disclosed in a filing last week that it only returned $900,000 of the donation and kept $100,000 that will be allegedly steered later on to “victims of FTX’s collapse.”
BETO O’ROURKE RETURNED $1 MILLION CAMPAIGN DONATION FROM SAM BANKMAN-FRIED, CAMPAIGN CLAIMS
“Beto O’Rourke never misses an opportunity to claim moral superiority,” Matt Mackowiak, a senior Republican political consultant in Texas, told the Washington Examiner. “It would seem giving back $100,000 of tainted money of a $75 million campaign haul would be a simple decision.”
It is unclear why O’Rourke selectively chose $100,000 to donate to the alleged FTX victims fund, which was not mentioned by his campaign in the November donation announcement. FTX declared voluntary bankruptcy on Nov. 11, seven days after the campaign had allegedly refunded the $1 million.
The O’Rourke campaign’s November announcement came amid lawmakers coming under major pressure, which has remained, to return donations they received from Bankman-Fried. The mogul poured in roughly $40 million during the 2022 election cycle to mostly boost Democrats. Bankman-Fried has claimed he secretly donated “the same amount” to Republicans through dark money — but the allegation hasn’t been substantiated.
O’Rourke, who was defeated handily by Gov. Greg Abbott (R-TX) in the election, is down to just over $212,000 in cash on hand, according to filings. It is unclear whether the Democrat intends to run again in the future. He dropped out of the 2020 Democratic presidential field roughly two months before the initial primary took place and lost by over 214,000 votes in the 2018 Senate race to Sen. Ted Cruz (R-TX).
O’Rourke served in the House between 2013 and 2019.
The $1 million that Bankman-Fried sent to O’Rourke made the cryptocurrency kingpin one of the candidate’s top donors. Another top donor was left-wing billionaire and philanthropist George Soros, records show.
Before FTX’s collapse, Bankman-Fried was on a hunt to gain influence in Washington. He donated over $300,000 to Democratic members of Congress on the House Financial Services Committee, which oversees parts of the cryptocurrency world.
Bankman-Fried also made numerous trips to the White House with FTX’s head lobbyist Eliora Katz, disclosures show. FTX spent $640,000 in 2022 lobbying Congress for friendly industry regulations, according to filings.
The Washington Examiner first reported in December 2022 that Bankman-Fried and his then-FTX colleagues wined and dined Dan Berkovitz, who at the time was a commissioner for the U.S. Commodity Futures Trading Commission, a top cryptocurrency regulator, in October 2021.
Berkovitz went on to become general counsel for the Securities and Exchange Commission, which announced in December 2022 that he was departing from his role. The SEC did not say whether Berkovitz’s relationship with FTX played any part in his departure.
Bankman-Fried quietly steered $400 million to an obscure cryptocurrency firm called Modulo Capital shortly after the collapse of FTX in November, the New York Times reported on Tuesday. Authorities have reportedly been aware of that transaction for months, which is said to have become a “crucial part” of the Bankman-Fried investigation.
Several lawmakers, such as House Minority Leader Hakeem Jeffries (D-NY), have said they handed their Bankman-Fried donations to local charities. But lawmakers may still be on the hook for Bankman-Fried donations and have to provide matching amounts to the government, experts told the Washington Examiner. Similarly, entities that received the donations from lawmakers may be compelled to do the same, they said.
The “safest course of action” from a legal perspective is for lawmakers to hold on to the Bankman-Fried donations, said Kathy Bazoian Phelps, a partner at the California law firm Raines Feldman.
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“Anyone who is solvent, who has assets, is a potential source for recovery if they received money from FTX that they shouldn’t have received,” Ilan Nieuchowicz, a litigator for the law firm Carlton Fields, previously told the Washington Examiner. “The trustee, their responsibility is to collect for the estate and distribute the funds for the benefit of all creditors.”
Meanwhile, the O’Rourke campaign has not signaled that it will return the $100,000 donation it took from Nishad Singh, FTX’s former engineering director. Singh has reportedly met with prosecutors handling the Bankman-Fried investigation and is cooperating to obtain a deal that works in his favor.
