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Sam Bankman-Fried gave $2.5 million to a leading political ethics watchdog. The group says it can't give the money back because officials already spent it.

Sam Bankman-Fried poses in front of FTX Arena scrim
Former FTX CEO Sam Bankman-Fried is a major donor to one of Washington, DC's most notable legal and ethics watchdog organizations.Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images
  • The Campaign Legal Center fights against lawlessness and unethical behavior in politics.

  • Sam Bankman-Fried, former CEO of imploded cryptocurrency exchange FTX, is a major donor.

  • Bankman-Fried, who sought to buy influence with off-shore crypto money, now faces federal investigations.

The nonprofit Campaign Legal Center — a leading nonpartisan political watchdog that's hounded Donald Trump and scores of other politicians with legal challenges and ethics complaints — recently accepted more than $2.5 million in contributions from embattled "crypto-king" Sam Bankman-Fried.

The Campaign Legal Center confirmed to Insider that Bankman-Fried, who is now himself facing significant legal and ethical scrutiny, gave the organization about $2.5 million since 2021.

Bankman-Fried gave $1.06 million to the Campaign Legal Center's advocacy arm during 2021, and $1.5 million — split between the group's advocacy and charitable arms — during 2022.

Brendan Quinn, a spokesperson for the Campaign Legal Center, says the nonprofit organization cannot return or give away Bankman-Fried's money because the money is already spent.

The Campaign Legal Center's charitable arm ended last year with more than $26.8 million in net assets, including about $12.5 million in cash, according to its most recent IRS tax filing.

Bankman-Fried's FTX cryptocurrency exchange collapsed last month in dramatic fashion, and the 30-year-old billionaire now faces congressional, federal regulatory, and law enforcement investigations — say nothing of international scrutiny — for his role in what's been a financial wipeout for numerous investors.

Amid this mess, would the Campaign Legal Center reject future contributions from Bankman-Fried?

"That's not something we're considering or need to consider at this time," Quinn said.

A spokesman for Bankman-Fried did not respond to a request for comment about the donations to the Campaign Legal Center, and Bankman-Fried did not respond to questions send via email and Twitter direct message.

Bankman-Fried told the New York Times earlier this month that he doesn't believe he ever committed fraud or lied in the months leading toward FTX's implosion.

"I did not ever try to commit fraud on anyone," Bankman-Fried said. "I don't know of times when I lied."

Former gubernatorial candidate Beto O'Rourke, a Democrat from Texas, is among politicians who've gotten rid of contributions from Sam Bankman-Fried.AP

Dirty money?

The Campaign Legal Center has previously suggested political candidates who receive contributions from tainted sources have options for giving back the money.

Earlier this year, for example, some New York politicians declined to return contributions from then-congressional candidate Carl Paladino, a Republican who had praised Adolph Hitler as "the kind of leader we need today," with a spokesman for Rep. Nicole Malliotakis saying the money had already been spent.

The Campaign Legal Center told the New York Daily News that a candidate can always cut a check to a prior contributor in the amount of an old contribution.

Asked whether the Campaign Legal Center would consider disgorging an amount of money equivalent to what Bankman-Fried contributed, Quinn noted that the Campaign Legal Center is not a political candidate or committee.

"When a campaign is asked to disgorge an already-spent contribution, it generally does so by giving an equivalent amount to a charity. CLC is a charity," Brendan Quinn said.

During the past several years, Bankman-Fried has spread tens of millions of dollars among political committees and politically active organizations in service to what Insider this month revealed to be a massive effort to enshrine himself as a top power broker in Washington, DC.

"He understood that Washington, in particular, can be wooed through aggressive fundraising and political giving," Eric Soufer, a partner who leads the crypto and fintech practices for the strategic communications consultant Tusk Strategies, told Insider. "And that opens a ton of doors."

For some recipients of Bankman-Fried's money, they can't distance themselves from it quickly enough.

Take US Sens. John Boozman, a Republican who represents Arkansas, and Debbie Stabenow, a Democrat who represents Michigan. Representatives for the lawmakers told Insider that the senators, who each received $5,800 from Bankman-Fried ahead of Election 2022, plan to donate these contributions to charity.

Sen. Kirsten Gillibrand, a Democrat from New York, donated her Bankman-Fried contributions to Ariva Inc., a Bronx-based nonprofit that offers free financial counseling, MarketWatch reported.

And also-ran Texas gubernatorial candidate Beto O'Rourke, a Democrat who lost to incumbent Gov. Greg Abbott in November, confirmed to the Texas Tribune that he would return a $1 million contribution from Bankman-Fried.

Another Washington, D.C.-based watchdog organization, Citizens for Responsibility and Ethics in Washington, filed a complaint Wednesday with the Federal Election Commission against Bankman-Friend, accusing him of "direct and serious violations of the Federal Election Campaign Act" and ignoring rules that "ensure Americans have transparency into those funding elections."

Specifically, the Citizens for Responsibility and Ethics in Washington accuses Bankman-Fried of evading federal law by not disclosing "dark money" contributions to Republican-backing organizations that sought to influence elections.

The Campaign Legal Center publicly names its donors but does not generally say how much money specific individuals give. Tax documents, meanwhile, list the value of individual donations, but do not publicly attach names to those donation.

Nevertheless, Bankman-Fried's seven-figure infusion would rank him among the Campaign Legal Center's most generous donors of late, according to tax documents filed with the IRS, which indicate that most of the nonprofit organizations' contributions are in the six-figure range or less.

Campaign Legal Center Form 990 (2021)
An accounting of the Campaign Legal Center's charitable arm finances through 2021, as reported in its IRS From 990 tax return.Internal Revenue Service

The Campaign Legal Center's tax-exempt charitable arm, organized under section 501(c)(3) of the federal tax code, reported $17.7 million in contributions and grants in 2021, ending that year with $26.8 million in net assets, according to its federal Form 990 tax document.

The Campaign Legal Center has not yet provided Insider a copy, first requested December 2, of the most recent IRS 990 tax document filed by Campaign Legal Center Action, its advocacy arm.

Stephen Colbert at the Federal Election Commission with Trevor Potter of the Campaign Legal Center and Ellen Weintraub of the Federal Election Commission
Stephen Colbert (left), his lawyer Trevor Potter (center) and Federal Election Commission Commissioner Ellen L. Weintraub laugh at the conclusion of a hearing at the Federal Election Commission in Washington, DC.Sarah L. Voisin/The Washington Post via Getty Images

Trump foe, Colbert friend

Founded in 2002 by former Federal Election Commission Chairman Trevor Potter, the Campaign Legal Center has since served as a legal accelerant for "more accountability, more transparency, and less corruption" in politics.

Its team of attorneys regularly files lawsuits and federal ethics complaints involving all manner of perceived political and governmental malfeasance, with a focus on campaign money, voting, redistricting, and political ethics.

"We practice excellence and prioritize accuracy. We are thoughtful and proceed with care," the organization says of work. "We use tactics such as litigation, policy advocacy and communications to make systemic impact at all levels of government."

Former President Donald Trump has been a frequent target of the Campaign Legal Center's legal and ethics efforts.

But plenty of other politicians, from Sen. Ted Cruz, a Republican from Texas, to a slew of Democratic and Republican members of the US House, have also drawn the nonprofit's ire — as has President Joe Biden for failing to speak out against members of Congress' rampant conflicts-of-interests and legal violations regarding their personal stock trades.

Campaign Legal Center's most memorable star turn came about a decade ago, when Potter served as Stephen Colbert's on-air legal counsel as the then-Comedy Central host engaged in a months-long lampooning of the nation's election and corruption laws.

The Campaign Legal Center even named its Washington, DC, headquarters conference room after "Ham Rove" — a canned ham, presented to resemble Republican operative Karl Rove, that served as chief strategist for the Colbert Super PAC.

Dakin Campbell contributed to this report.

Read the original article on Business Insider