Beto O’Rourke returned $1 million check from FTX’s Sam Bankman-Fried

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Beto O’Rourke returned a $1 million donation from embattled cryptocurrency chief Sam Bankman-Fried 4 days earlier than Election Day, his marketing campaign advised The Texas Tribune this week.

Bankman-Fried based FTX, a cryptocurrency trade that was valued at $32 billion before collapsing abruptly in a matter of days earlier this month, setting off an industrywide panic. Many prospects of the favored crypto platform could lose all or a part of the cash they invested. O’Rourke’s workforce mentioned they returned the million-dollar donation every week earlier than FTX filed for bankruptcy and Bankman-Fried stepped down as its chief govt, however that the choice was made previous to Nov. 4 and took time to execute.

Chris Evans, a spokesperson for O’Rourke’s marketing campaign, mentioned the reimbursement of one of many largest checks to O’Rourke’s gubernatorial marketing campaign was unrelated to the scandals linked to Bankman-Fried’s now flailing cryptocurrency trade.

He mentioned the cash, which was acquired on Oct. 11, was returned as a result of the donation was unsolicited. Unlike different giant donations, O’Rourke had not talked with Bankman-Fried previous to the donation, and the massive sum took the marketing campaign without warning, Evans mentioned.

“This contribution was unsolicited and the campaign’s upcoming [Texas Ethics Commission] report will show that it was returned back on November 4, prior to the news stories that would later come out about the donor,” he mentioned.

FTX has been underneath scrutiny since September when Bloomberg reported how interconnected the corporate was with Alameda Research, a buying and selling agency which Bankman-Fried additionally based. On Nov. 2, two days earlier than O’Rourke’s marketing campaign mentioned they gave the donation again, CoinDesk reported that a lot of Alameda’s property have been made up of a cryptocurrency token issued by FTX, its sister firm. That report largely set off a run on FTX that culminated with its submitting for chapter on Nov. 11.

FTX is now being investigated by the Securities and Exchange Commission and the Department of Justice over whether or not it used billions of {dollars} in buyer funds to prop up Alameda Research. The Texas State Securities Board is also trying into whether or not FTX illegally supplied unregistered securities to Texans by way of its yield-bearing cryptocurrency accounts.

Nonetheless, his quiet return of the donation means O’Rourke has dodged the moral headache bearing down on different candidates nationwide and in Texas who took cash from the tech billionaire and his associates.

Bankman-Fried was O’Rourke’s top donor through the fundraising cycle spanning from July 1 to Sept. 29, however even with out his donation O’Rourke was a formidable fundraiser, coming in at round $77 million for his complete marketing campaign. O’Rourke had no less than three different seven-figure donors, together with the Democratic megadonor George Soros.

O’Rourke additionally acquired $100,000 from Nishad Singh, FTX’s director of engineering. O’Rourke’s marketing campaign didn’t reply to a query about whether or not in addition they returned that donation.

Prior to FTX’s collapse, Bankman-Fried, 30, was seen as a cryptocurrency wunderkind and a constructive affect on the business who was anxious to form its regulation. He and others tied to FTX have been prolific political donors to each Democratic and Republican candidates. Bankman-Fried is one among President Joe Biden’s largest donors, contributing greater than $5 million to his marketing campaign in 2020.

In whole, Bankman-Fried donated $40 million to Democrats, based on Open Secrets, whereas one other FTX govt, Ryan Salame, donated $23 million to Republicans.

Aside from O’Rourke, quite a few Texas congressional candidates additionally acquired cash from Bankman-Fried or his associates.

Jasmine Crockett, an incoming Democratic freshman to the U.S. House who’s at present a Dallas state consultant, acquired $2,900 from Gabriel Bankman-Fried, Sam Bankman-Fried’s brother, based on federal marketing campaign finance information.

Crockett, who was a part of a aggressive main election to switch longtime Dallas Rep. Eddie Bernice Johnson, additionally benefited from $1.4 million in spending from the Protect our Future super PAC, a political motion committee that was largely funded by Sam Bankman-Fried.

Crockett didn’t return a request for remark.

U.S. Rep.-elect Greg Casar, a Democrat and former Austin City Council member, acquired a complete of $6,800 in donations from Singh and Gabriel Bankman-Fried, based on information.

Casar didn’t return a request for remark.

Donors tied to FTX additionally gave to Republican candidates. Salame donated to U.S. Rep. Ronny Jackson, R-Amarillo; U.S. Rep.-elect Monica De La Cruz, R-McAllen; and Cassy Garcia, who challenged longtime Democratic U.S. Rep. Henry Cuellar for his Laredo-based South Texas district.

Salame gave $12,900 to Jackson and $1,000 every to De La Cruz and Garcia. He additionally donated $5,000 to Texas Red, a political motion committee affiliated with Jackson.

Representatives for De La Cruz, Garcia and Jackson didn’t return a request for remark.

Gov. Greg Abbott, a Republican who defeated O’Rourke earlier this month, has been crucial of Bankman-Fried’s donations to the Democrat.

“This Madoff-Style evaporation of customer’s money should be a crime,” he tweeted. “Candidates who received this tainted money should return it so that innocent customers of FTX can get some of their money back.”

Politicians throughout the nation have struggled over what to do with funds they acquired from Bankman-Fried and others tied to FTX.

Major Democratic figures like U.S. Sens. Dick Durbin of Illinois and Kirsten Gillibrand of New York have said they might give the donations they received from Bankman-Fried to charity. Durbin acquired $2,900 and Gillibrand acquired $16,600. Republicans, like U.S. Rep. Kevin Hern of Oklahoma, have additionally opted to donate their contributions to charity.

“What we’ve seen in the past with donations from people who’ve raised controversy in the news is generally politicians try to separate themselves from those people. They don’t want to be seen as beneficiaries of their largesse,” mentioned Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington. “Here’s a guy who took a bunch of money and ‘We’re going to give his money back’ doesn’t always play that great. So we often see this kind of thing, an equal amount being donated to a charity that the candidate supports.”

As extra politicians begin giving the donations again, Libowitz mentioned, it will increase the stress on those that haven’t opted to take action.

Jon Taylor, a political scientist on the University of Texas at San Antonio, mentioned giving the cash again is the good political transfer.

“It will assuage your guilt and make you sleep better at night and it looks good to do so,” he mentioned.

But he mentioned it’s also necessary for politicians to place distance between themselves and the controversial determine.

“You stiff-arm him and essentially say, ‘Yeah I got a contribution from him and I didn’t know him well and I’m not familiar with this cryptocurrency stuff and I’m really sorry for all the people who lost their money and I’m going to do my part with the small donation I got for my campaign,’” he mentioned.

Disclosure: University of Texas at San Antonio has been a monetary supporter of The Texas Tribune, a nonprofit, nonpartisan news group that’s funded partially by donations from members, foundations and company sponsors. Financial supporters play no position within the Tribune’s journalism. Find an entire list of them here.