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Sam Bankman-Fried’s Illinois political legacy

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* First, some context from CBS News…

FTX founder Sam Bankman-Fried has been found guilty on all seven counts of fraud, conspiracy and money laundering following more than two weeks of testimony in one of the highest-profile financial crime cases in years.

The 31-year-old former cryptocurrency billionaire was convicted on all seven counts of fraud, conspiracy and money laundering, charges that each carry a maximum sentence of 20 years in prison. He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, which each carry a five-year maximum sentence.

“Sam Bankman-Fried perpetrated one of the biggest frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto,” Damian Williams, U.S. attorney for the Southern District of New York, said in a news briefing following the verdict. “Here’s the thing: the cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption, is as old as time, and we have no patience for it.”

The MIT graduate steadfastly maintained his innocence since his arrest late last year after the startling implosion of FTX, the crypto exchange he co-founded, amid an $8 billion shortfall in funds and allegations he had used customer money to prop up his struggling hedge fund, Alameda Research.

* US Rep. Jonathan Jackson probably owes his 2022 Democratic primary win to Sam Bankman-Fried. The Sun-Times broke the story in June of 2022…

Protect Our Future, a political action committee bankrolled by cryptocurrency billionaire Samuel Bankman-Fried, spent $914,944 to boost three Illinois Democratic primary candidates, including $500,065 for television ads to support Jonathan Jackson’s 1st Congressional District bid, according to Federal Election Commission records.

Protect Our Future spending is what the FEC calls an “independent expenditure,” with the PAC by law prohibited from coordinating or communicating with a candidate’s campaign.

* In addition to Bankman-Fried’s $500K, another crypto front, Web3 Forward, spent $491,250 on pro-Jackson media buys. The Texas Tribune reported that Web3 Forward “is affiliated with the longer-running GMI PAC, whose leading donors have included another top FTX executive,” and it put money into some other races that SBF’s Protect Our Future was involved with last year.

DAO for America also wound up spending $307,998 on Jackson. That super PAC appeared to be working with at least some other SBF-backed candidates elsewhere.

All told, that’s close to $1.3 million dollars in crypto spending on Jackson’s behalf.

The 17-candidate Democratic primary race last year was packed with under-funded candidates, so the independent expenditures were likely crucial to Jackson’s win. Jackson tallied just 28 percent of the vote.

Karin Norington-Reaves was the only other candidate who received major IE support. Forward Progress PAC spent $758,000 on her behalf. The Collective Super PAC spent another $65K. Reeves finished third with 14 percent of the vote, just behind Ald. Pat Dowell.

* Protect Our Future’s involvement in US Rep. Chuy Garcia’s primary made no electoral sense because Garcia didn’t even have an opponent. But Garcia eventually stepped down from the House Financial Services Committee and the independent expenditure haunted him in the 2023 mayoral race. The committee also did an IE for US Rep. Nikki Budzinski, but she won her race with almost 76 percent of the vote, so it didn’t appear to matter much, unlike that Jackson money, which was likely essential.

…Adding… From US Rep. Garcia’s spokesperson…

The Congressman did not step down from Financial Services. His membership was already “waived on” which meant he wasn’t earning seniority in the first place because he had other preferred committees (Transportation).

Because Republicans won the majority, Dems lost seats on the committee. Consequently, those who were ”waived on” were those who lost their places on the committee.

posted by Rich Miller
Friday, Nov 3, 23 @ 9:59 am

Comments

The SBF money ended-up hurting Chuy the most because Lori ran ads attacking him for it without a response for six weeks.

I’d be curious if FTX’s more-obscure GOP donors had any effect on their primaries in Illinois.

Comment by Drury's Missing Clock Friday, Nov 3, 23 @ 10:06 am
===hurting Chuy the most because Lori ran ads attacking him for it ===

I think the Madigan stuff hurt him worse. He just had too much baggage and Lori really did a number on him. The only flawless work she did in years. lol

Comment by Rich Miller Friday, Nov 3, 23 @ 10:10 am
==I think the Madigan stuff hurt him worse.==

Oh, most definitely. It just contributed to the narrative of corruption that Chuy’s campaign let go unanswered for ~6 weeks via TV ads.

==The only flawless work she did in years. lol ==

She just had to wreck one more beloved Chicago institution on the way out the door.

Comment by Drury's Missing Clock Friday, Nov 3, 23 @ 10:39 am
Geez, Louise, I wonder who the connective tissue was between JJ and Chuy.

Comment by FauxReformers Friday, Nov 3, 23 @ 10:53 am
===I wonder who the connective tissue was between JJ and Chuy===

A couple of obvious ones are out there. Whether they are the SBF nexus has not been independently verified as of yet.

Comment by Rich Miller Friday, Nov 3, 23 @ 10:55 am
This conviction really brightened my day

Comment by Suburban Mom Friday, Nov 3, 23 @ 11:04 am
Feds dropped a campaign finance charge against SBF in June. One can’t help but wonder how deep in the political system he was nestled. Could he have brought down high powered operatives? We’ll never know. To date, the biggest political casualty of this whole thing was Chuy.

Comment by Wally Friday, Nov 3, 23 @ 11:17 am
===One can’t help but wonder how deep in the political system he was nestled. Could he have brought down high powered operatives? We’ll never know.===

He coulda took a plea, he also could’ve given up people he felt knowingly (or unknowingly?) broke laws.

In reality, it’s not a conspiracy theory that is at play, the guy was a genius at hiding a Ponzi scheme with made up values of nothing in a currency that even those in his ads preferred cash over crypto.

Comment by Oswego Willy Friday, Nov 3, 23 @ 11:27 am
Sam Bankman-Fraud. A lot of rich people through money at him thinking he was some sort of tech savant. Turns out, he was just a young guy with a new version of the old pyramid scheme. He went from living large in the Bahamas back to his parents basement and no to prison.

Comment by 47th Ward Friday, Nov 3, 23 @ 11:27 am
MLL and Samir wanted on that crypto gravy train bad.

Comment by Three Dimensional Checkers Friday, Nov 3, 23 @ 12:02 pm
I like the fact that his PAC was called Protect Our Future. Makes you wonder who’s future he wanted protected

Comment by DuPage Saint Friday, Nov 3, 23 @ 12:11 pm
Many pols have returned the SBF contributions or donated them to Charity. The Bankruptcy Trustee has demanded the monies be returned so creditors can receive the unlawfully looted money. Has JJ returned the almost million in stolen money Sam donated to his campaign?

Comment by Sue Friday, Nov 3, 23 @ 12:16 pm
This was a blessing in disguise for Pat Dowell. Had she won sbhe would have been a backbencher in the minority party. Instead she became Chair of the Finance Committee in the Chicago City Council. That is a much better outcome.

Comment by low level Friday, Nov 3, 23 @ 12:25 pm
===Has JJ returned the almost million in stolen money Sam donated to his campaign? ===

Learn to read.

Those were independent expenditures. And if you don’t know what those are, you probably shouldn’t even be commenting here.

Comment by Rich Miller Friday, Nov 3, 23 @ 12:32 pm