FTX Poured Millions into Alabama's 2022 U.S. Senate Race
$2.2 million swindled from investors went to Super PACs that supported Sen. Katie Britt's candidacy
If you are one of the many Alabamians who were defrauded by Sam Bankman-Fried and his cabal of wunderkind FTX executives, chances are that some of your money ended up funding Super PACs that spent millions supporting the candidacy of U.S. Sen. Katie Britt, R-Alabama.
According to campaign finance records filed with the Federal Elections Commission, Bankman-Fried, one of his top executives, and FTX itself all combined to contribute at least $2.2 million to political action committees that subsequently spent the money in support of Britt’s candidacy.
The bankrupt crypto exchange is now asking for that money back by the end of this month, along with all of the $56 million that its executives poured into Democrat and Republican campaigns last year.
Follow The Money
FEC records show that a Super PAC called the Alabama Conservatives Fund received $105,000 from Bankman-Fried on June 2, 2022, and then received another $100,000 from West Realm Shires Services (the company doing business as FTX) a week later, on June 10, 2022.
Who runs the Alabama Conservatives Fund? The only name listed on its federal paperwork is the committee’s treasurer, and its address (2024 Third Avenue North, Suite 211, in Birmingham) seems to be shared with other PACs and political-sounding businesses.
But the $205,000 it received from Bankman-Fried and FTX is small potatoes in this game.
The big money came from a Super PAC called American Dream Federal Action, which is registered to a mailbox at a UPS Store in Manchester, New Hampshire. It received every cent of its $15 million war chest from FTX executive Ryan Salame.
FEC records show that American Dream Federal Action then spent nearly $2 million supporting Britt’s candidacy.
So, that’s at least $2.2 million swindled from FTX investors that ended up funding those annoying campaign ads on your television and junking up your mailbox with those ridiculous political flyers.
Someone got elected to a high office.
Some other people profited from the process — cutting the ads, designing the flyers, and collecting the fees for making it all happen.
And thousands lost their hard-earned money.
In Defense
There’s a couple of things that are important to know about Super PACs.
First, candidates have nothing to do with them — they cannot raise the money, accept the money, or spend the money collected by Super PACs. Candidates are forbidden from coordinating with Super PACs, even about something as simple as what message to air on a television commercial, or even about whether to air a television commercial at all.
So Britt didn’t — couldn’t, actually — say “knock it off” to Bankman-Fried, Salame, FTX, or whoever runs American Dream Federal Action or Alabama Conservatives Fund.
But she can, and did, benefit from their support.
The second thing to know about these Super PACs is that they’re purposely cloaked in mystery. Nobody knows who runs many of them. The law only requires Super PACs to report the group’s treasurer and its mailing address — which often seems to be a rather unknown, nearly anonymous accountant and a mailbox at a UPS Store.
I wrote about that last summer, and how a multi-million dollar Super PAC called Alabama Christian Conservatives was actually operated out of some guy’s house in Austin, Texas.
The Way Ahead
The FTX fiasco is what’s wrong with unchecked speculation. These Super PACs are what’s wrong with unchecked campaign contributions.
And the fact that a bunch of 20-somethings at FTX can collectively become the second-largest donor to Democrats and the 10th largest donor to Republicans shows what happens when sketchy meets shady.
(It’s a mess, and everyone involved ought to be ashamed. They’re weakening trust in our democracy, and if we lose trust … we’ll lose it all.)
There’s no telling what to do about FTX. When it comes to speculation, better modify the famous Russian axiom to don’t trust, always verify.
But if we’re going to allow millions to be collected by third-party power brokers and spent electing our public officials — and everyone seems fine with that — then we simply must have more visibility into their operations.
Sunshine is the best disinfectant, as they say.
Congress ought to require Super PACs to disclose more than a junior accountant’s name and a nearly fake mailing address. The government requires more information if your grandmother wants to create an LLC to sell her handmade quilts, for Pete’s sake.
The public has a clear interest in knowing precisely who is running a Super PAC. They should have to name and disclose all of the officers, not just the treasurer. We should know who the president is, and any others who have authority to raise and spend the committee’s money.
Only then, with proper visibility, will we have effective accountability, and greater trust in an increasingly distrusted process.
Meanwhile, if you’re one of the thousands of Alabamians who were conned by FTX, I doubt you’ll see a refund check in your mailbox anytime soon.
But wait around until the next election cycle and you’re sure to see some silly campaign flyers paid for by those Super PACs.
(J. Pepper Bryars is Alabama’s only reader-supported conservative journalist. You can support his writing by subscribing at https://jpepper.substack.com/subscribe.