Last week, in the trial of former crypto billionaire Sam Bankman-Fried, details emerged about how the now-disgraced entrepreneur attempted to co-opt U.S. senators from both the Republican and Democratic parties.
With $50 million in donations to secretive dark money vehicles linked to both party’s respective Senate leaders, Chuck Schumer and Mitch McConnell, Bankman-Fried presumably sought to influence future crypto regulations.
Had the 31-year-old former “crypto king” not run afoul of the law, we might never have learned of the donations. The only reason the American people are aware of this influence-buying is because Bankman-Fried allegedly made the donations with stolen investor money. Had Bankman-Fried not been the head of a company engaging in criminal acts, the dark-money contributions to Schumer, McConnell, and other members of Congress would presumably have been legal and likely never come to light.
While the crypto market is still just a fraction of the size of the global stock market, it has grown exponentially over the past decade. At current market prices, there’s roughly $2 trillion of crypto assets in circulation. That’s about the size of France’s annual GDP.
The $50 million that Bankman-Fried spent to secretly buy influence was small in comparison to the size of the industry, but it likely would have given him outsized control over the writing of crypto regulations. Senators from both sides of the aisle would have been encouraged to take his calls and meet with his lobbyists. The Senate majority leader and ranking Republican might have made calls to various regulatory bodies to check up on proposed regulations or provide “feedback” to rules being considered.
Drafts of potential legislation would have been shared with Bankman-Fried and his team before they were shared with the full Senate. Objectionable provisions would have been crossed out and replaced with more favorable terms. Rules that benefited Bankman-Fried’s company, FTX, at the expense of competitors, would have mysteriously made their way into the legislation.
Journalists, unaware of Bankman-Fried’s philanthropy to Club McConnell and Club Schumer, would be producing feel-good stories about the way Congress came together to enact bipartisan legislation to protect the public from unscrupulous operators.
Fortunately, none of that came to pass. But what does it say about our system that it could have happened and would have been considered perfectly legal? Without full disclosure of all campaign spending, reporters and, more importantly, the American people, would have no way of knowing the motivations of their elected leaders. And no politician could be held accountable for conflicts of interest.
With all the talk over the past several months of the ethically challenged behavior of various Trump and Biden family members, the American people are clamoring for Congress to pass rules to fix our broken and corrupt political system.
This isn’t a new issue. In a polling project first commissioned by Jimmy Carter’s pollster, the late Patrick Caddell, the problem of government ethics and corruption has been one of the top two voter concerns for more than a decade. The behavior of the first families of the Democratic and Republican parties has brought the issue into focus for even more Americans to see.
In the polling done by Caddell, over 80% of Americans agreed with the statement, “Washington, DC is a rigged game that only benefits those people who can buy access to power.”
Sam Bankman-Fried’s behavior only reinforces that belief. While the Supreme Court’s ruling in Citizens United v. Federal Election Commission confers the right of billionaires to spend millions buying influence through election spending, it doesn’t guarantee them the right to anonymity.
Bankman-Fried’s trial is expected to last into the middle of next month. No doubt, more details of his political spending will emerge. Congress should use this backdrop to enact legislation requiring full disclosure of all political spending and end the era of special interest and mega-donor dark money influence in America.
