Cryptocurrency billionaire roils NY Democratic congressional races

WASHINGTON — An idiosyncratic cryptocurrency billionaire is roiling New York’s Democratic congressional races before the Aug. 23 primaries with some hefty contributions, including donations to candidates in the two most competitive Long Island contests.

Samuel Bankman-Fried, 30, founder of the cryptocurrency platform FTX, has bankrolled at least $1 million in political spending in New York, campaign finance reports show.

And the Protect Our Future super PAC that he funds appears poised to spend more in the next few weeks.

Jay Jacobs, state and Nassau County Democratic chairman, said he could not remember an outside mega-funder weighing in on New York primaries the way Bankman-Fried is doing.

Jacobs said, “I’m just not a big fan of rich people looking to impact elections because they’ve got money.”

Bankman-Fried, who is worth $12.7 billion according to the Bloomberg Billionaires Index, may represent the wave of the future for Democrats in the wake of U.S. Supreme Court rulings that have opened the door to unlimited spending on independent political ads and messages.

As the November midterm elections and their potential to shift the balance of power in Congress near, Bankman-Fried is boosting primary candidates across the nation in a nearly $40 million spending spree — primarily for Democrats but also for several Republicans, campaign filings show.

Donations included $250,000 to the Democratic Congressional Campaign Committee, the official campaign arm of House Democrats, and $6 million to the House Majority PAC, which supports Democrats.

Often dressed in shorts and a T-shirt, Bankman-Fried lives in the Bahamas and drives a hybrid Toyota Corolla, according to Politico and Bloomberg profiles.

Bankman-Fried incorporated FTX in the Caribbean nation of Antigua and Barbuda because it offers currency bets not allowed in the United States. U.S. citizens can use only a more limited subsidiary, FTX.US.

Still, most Americans know FTX for its naming of the FTX Arena in Miami and its Super Bowl ads featuring comedian Larry David and quarterback Tom Brady.

So far FTX has not been as damaged as some others by the current crypto winter, which dropped a $3 trillion asset class temporarily below $1 trillion in cumulative market cap, sending crypto giant Bitcoin trading down by about half from the start of the year, Fortune reported.

Bankman-Fried turned his attention to U.S. politics in the 2020 election when he spent at least $10 million to support President Joe Biden’s campaign.

For the midterm elections this year, he often has focused on trying to pick primary winners, many of them in safe Democratic districts.

“It is a strategy that if you think that the district is going to be solidly Democratic, then the only impact you can have is in a primary,” Jacobs told Newsday.

Bankman-Fried is channeling $27 million of his money through the Protect Our Future PAC to pay for independent expenditures on ads and mailings unconnected to the campaigns.

He also contributes directly to candidates and to the Guarding Against Pandemics PAC, which several donors fund and which his brother Gabe, 27, runs.

Both Sam and Gabe Bankman-Fried believe in a philosophy called “effective altruism,” which involves maximizing good through use of a cost-per-life-saved formula.

Sam Bankman-Fried has told interviewers he makes money so he can give it away.

“Protect Our Future and Guarding Against Pandemics endorse and support candidates across the country who will be champions for pandemic prevention in the next Congress,” Mike Levine, a spokesman for the two political action committees, said in an emailed statement to Newsday.

Candidates seeking an endorsement from Guarding Against Pandemics must fill out questionnaires on how to prepare for future pandemics.

Protect Our Future takes those endorsements into account in its funding decisions, Levine said.

Critics say such donations will open doors for Bankman-Fried to weigh in when Congress takes up cryptocurrency regulations.

Levine said the PACs take no position on crypto.

New York Races

Guarding Against Pandemics has endorsed six Democrats running in New York primaries and has given four of them $1,000 each, but the big money comes from Bankman-Fried’s Protect Our Future super PAC, Federal Election Commission filings show.

Nassau County Legis. Joshua Lafazan, who's in the crowded field to replace Rep. Tom Suozzi (D-Glen Cove) in the 3rd Congressional District in Nassau and Queens, won Guarding Against Pandemics' endorsement and vows on his campaign website to push for preparation for pandemics. Lafazan didn't receive a $1,000 contribution.

Instead, Protect Our Future began airing a television ad last Thursday supporting Lafazan in his race against four other Democrats.

The next day, the PAC reported to the FEC it had spent $296,409 on the TV ad and $201,720 on digital ads — a nearly $500,000 boost that represented about a third what Lafazan reported he had raised through the end of June. 

Protect Our Future also invested in the Democratic primary in the upstate 22nd Congressional District which includes Syracuse and has four Democrats running for the seat.

After Guarding Against Pandemics endorsed and gave $1,000 to Iraq War veteran Francis Conole in the race, Protect Our Future spent $396,000 for mailings and a TV ad for him.

Political professionals in New York are watching for what, if anything, Protect Our Future will spend in the state in the weeks before the Aug. 23 primary, particularly for candidates endorsed by Guarding Against Pandemics.

That PAC endorsed and donated $1,000 to Laura Gillen, a former Hempstead Town supervisor, in the four-candidate Democratic race in the 4th Congressional District in Nassau County.

Bankman-Fried personally gave Gillen's campaign $2,900, but his Protect Our Future PAC has not made any independent expenditures to support her.

Guarding Against Pandemics endorsed and contributed $1,000 to Max Rose, who is running to reclaim his seat in the 11th Congressional District on Staten Island, and to Rep. Ritchie Torres in the 15th District in the Bronx.

It also endorsed New York City Council Member Carlina Rivera, who is among the dozen Democrats running in the newly configured 10th Congressional District, which includes parts of Manhattan and Brooklyn.

Neither PAC run by the Bankman-Frieds has spent money to aid Rivera's campaign.

New York Democrats have expressed mixed feelings about Sam Bankman-Fried’s involvement, particularly in this year's scrambled New York primary, which was pushed back from its usual date in June to August after a judge ordered new congressional and state Senate district boundaries drawn. 

Both Gillen and Lafazan said in statements they were “honored” to get the Guarding Against Pandemics PAC’s endorsement.

But Evan Chernack, campaign manager for Long Island public relations executive and 3rd District Democratic candidate Robert Zimmerman, issued a statement charging that, "Lafazan invited a billionaire-funded super PAC to help his campaign mislead voters" — a reference to Lafazan's acceptance of the Conservative Party line in his 2019 county legislative race.

Even with Bankman-Fried's involvement, outside spending in New York's Democratic primaries adds up to only a little more than a third of the money spent in the state's Republican primaries, according to the latest FEC filings.

Some Democrats argue the party should open its door to big-money donors in primaries, instead of relying on the DCCC or EMILY’s List.

“There's just something about these rich folks who just believe that they can circumvent the rules of the game, which are the contribution limits, and run their own show,” Jacobs said, referring to caps on donations such as the $2,900 limit in direct contributions per election for individual candidates.

“I just don't think that that's the way American democracy was meant to be practiced. And, you know, we'll have to deal with the consequences,” Jacobs said.