Several Minnesota politicians received campaign donations from leaders involved with the sprawling FTX empire before the recent implosion of the cryptocurrency exchange.
The money given to local campaigns was only a small part of the nationwide spending spree before the midterm election by then-FTX CEO Sam Bankman-Fried and FTX Digital Markets co-CEO Ryan Salame. While Bankman-Fried's Minnesota spending went towards Democrats, Salame's dollars were for Republicans.
In Minnesota's main swing district congressional race that includes suburbs south of the Twin Cities, Democratic U.S. Rep. Angie Craig's campaign received two donations from Bankman-Fried, according to federal campaign finance records.
"My campaign received and spent $5,800 in campaign contributions from Sam Bankman-Fried during our most recent election," according to a statement from Craig, who bested Republican Tyler Kistner to win a third term. "The crypto space has been left largely unregulated, and with that lack of oversight comes serious risk. Congress needs to do more to regulate this industry and better protect consumers."
A spokeswoman for Craig's campaign said earlier this week that it had no plans to donate the money from Bankman-Fried. Craig sits on the House Agriculture Committee and the Energy and Commerce Committee.
Democratic U.S. Sen. Tina Smith's campaign also received $5,800 from Bankman-Fried, though she was not up for reelection and her seat won't be on the ballot until 2026. In a statement, Smith said she will donate the contributions to a nonprofit organization. Smith serves on the Agriculture Committee and the Senate panel on banking.
"I have serious concerns about crypto and the financial risks it presents to retail investors, which is only underscored by what's happened at FTX," Smith said. "It's clear we need to think carefully about how crypto is regulated and how we can best protect consumers and the economy."
The Associated Press reported that FTX and Bankman-Fried are under investigation by the Securities and Exchange Commission and the U.S. Department of Justice.
OpenSecrets, a nonprofit focused on money in politics, reported that Bankman-Fried, Salame and FTX Director of Engineering Nishad Singh together donated about $70 million this election cycle.
While Bankman-Fried spent heavily on Democrats, according to OpenSecrets, some money also went to Republicans. The GOP narrowly retook control of the U.S. House in the midterms, while Democrats held onto the U.S. Senate.
Bankman-Fried's major spending included $6 million to the Democrat-aligned House Majority PAC at one point earlier this year, and $250,000 to the Democratic Congressional Campaign Committee, according to federal campaign finance reports. The Minnesota DFL Party received several hundred dollars from Bankman-Fried in 2020 and nearly $10,000 in August of this year. A party spokesman declined to comment.
Combined, Bankman-Fried and Salame gave more than $100,000 to the National Republican Congressional Committee (NRCC), the campaign arm that was chaired by Minnesota U.S. Rep. Tom Emmer. The NRCC declined to comment, and Emmer's campaign didn't respond to a request for comment on several thousand dollars it received from Salame.
Emmer, who is expected to have strong influence next year as the third-ranking House Republican, has been a vocal supporter of cryptocurrency. In March, he was one of eight members of Congress who signed onto a bipartisan letter to the Securities and Exchange Commission questioning their requests for information involving cryptocurrency and blockchain firms.
Emmer said in a tweet thread about the letter that his office had "received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler's information reporting 'requests' to the crypto community are overburdensome, don't feel particularly … voluntary … and are stifling innovation."
During a recent appearance on Fox Business, Emmer — who sits on the House Committee on Financial Services — called the FTX collapse "a failure of centralized finance and a failure of Sam Bankman-Fried."
Federal campaign records also show that the Salame-funded political committee American Dream Federal Action spent more than $1 million in outside independent expenditures supporting Republican U.S. Rep. Brad Finstad in his initial May special primary run for southern Minnesota's First Congressional District seat.
Finstad won the close contest that also saw other outside spending focused on either his run or that of state GOP Rep. Jeremy Munson. Finstad later won a special general election for the seat, and was victorious in his bid for a full term earlier this month. Salame donated $2,900 in September to the campaign for Finstad, who sits on the House Agriculture Committee.
"We do all due diligence when the campaign receives any donation to verify it complies with Federal Election Commission guidelines," Finstad campaign spokesman David FitzSimmons said in an email. "Given current news, the donation in question has been returned. In regard to independent expenditures, the campaign, by law, has nothing to do with any independent expenditure."
David Schultz, a political science professor at Hamline University, said the scope of the donations and the scramble to return them gets to the root of how money is raised and spent on U.S. political campaigns. With crypto, he said, some jurisdictions already have raised questions about ill-gotten gains and money laundering.
"There are sufficient red flags," Schultz said. "Candidates should have been on notice about these problems but they didn't do anything. They just sort of jumped on the bandwagon."
The Associated Press contributed to this report.