The Democrats’ Senate Majority PAC announced it will return the $3 million in donations from former FTX CEO Sam Bankman-Fried and the former FTX head of engineering, Nishad Singh, according to the political action committee.
The PAC spent at least $160 million supporting Democrat candidates for Senate in 2022, and a few select Republicans.
“Following the serious allegations against FTX, Senate Majority PAC previously set aside the contribution amounts from Sam Bankman-Fried and Nishad Singh with the intention of returning the funds once we receive proper direction from federal law enforcement officials based on their legal proceedings,” a PAC spokeswoman told CNBC on Tuesday.
Sen. Lisa Murkowski, who received the maximum contribution to her campaign from a disgraced cryptocurrency crook, will not return the funds so they can be redistributed to investors in FTX. Instead, she has donated those funds to a Homer nonprofit, Storyknife Writers Retreat in Homer. Murkowski received about $14,000 from Sam Bankman-Fried, his brother, and another executive at FTX.
FTX bilked thousands of investors out of their cryptocurrency investments, and used those funds to get Democrats elected into office.
Murkowski’s campaign told Anchorage Daily News reporters she donated $14,200 to the nonprofit as soon after the news of the cryptocurrency fraud was made public.
“FTX entered bankruptcy filings on Nov. 11, and Murkowski made a donation of $14,100 to Storyknife Writers Retreat in Homer on Nov. 22, according to Federal Elections Commissions records. The donation was made weeks before Bankman-Fried was arrested in the Bahamas earlier this week,” the ADN reported. Bankman-Fried was arrested three weeks after Murkowski handed over the money to a retreat for women writers, where there is a cabin sponsored by a family member associated with the senator.
The Storyknife Writers Retreat has a Murkowski family connection. One of the cabins is named for the senator’s sister, Carol Murkowski Sturgulewski, as a naming opportunity sponsored by the late State Sen. Arliss Sturgulewski, who served in the Legislature from 1979 to 1993. Naming rights for cabins at the retreat went for about $50,000.
But the bankruptcy court says it will claw back that type of re-distribution of those funds, which belong to debtors.
FTX is trying to get the payments made to politicians back and “intends to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced”, the company said. Recipients of the ill-gotten gains can voluntarily return the money and avoid court action by contacting [email protected].
“Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any subsequent transferee,” FTX said in a statement.
“FTX Trading Ltd. (d.b.a. FTX.com), and its affiliated debtors (together, the ‘FTX Debtors’), today announced the FTX Debtors have been approached by a number of recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors (collectively, the ‘FTX Contributors’). These recipients have requested directions for the return of such funds to the FTX Debtors. The FTX Debtors are working with these recipients to secure the prompt return of such funds to the FTX Estates for the benefit of customers and creditors,” the press release reads.
“The FTX Debtors invite all recipients of such payments to contact the FTX Debtors at ([email protected]) to make arrangements for the return of such payments. To the extent such payments are not returned voluntarily, the FTX Debtors intend to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced. Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX Contributor does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee,” the company said.