Not Just A Crypto Scam: SBF Accused Of Massive Campaign Finance Violations, Too

A lot of things happened. Here are some of the things. This is TPM’s Morning Memo.

Biggest Campaign Finance Case In Decades

We learned back in December that Sam Bankman-Fried was accused of more than just crypto-related scamming. A single count of the original indictment alleged significant campaign finance violations. But a superseding indictment publicly released yesterday offered considerable new detail about that aspect of the case, including the use of straw donors and corporate funds.

The new information makes this one of the largest campaign finance cases in recent decades. Consider the numbers from the superseding indictment: “over 300 political contributions, totaling tens of millions of dollars.”

The gist of the new allegations is that while SBF was known before his crypto exchange FTX came crashing down as a major Democratic donor (the sixth largest, with nearly $36 million contributed in the 2022 cycle), he was also allegedly giving to Republicans and “left-leaning causes” in significant amounts using corporate funds but through straw donors to keep it hidden from the public.

SBF, 30, had already admitted as much after the FTX collapse, as Mother Jones notes:

“All my Republican donations were dark,” Bankman-Fried said in an interview after FTX’s collapse. “The reason was not for regulatory reasons, it’s because reporters freak the fuck out if you donate to Republicans. They’re all super-liberal, and I didn’t want to have that fight.”

Prosecutors alleged that SBF designated one FTX executive as a donor to liberal causes and candidates, and another FTX executive as a conservative counterpart. The NYT points fingers, but delicately:

Besides Mr. Bankman-Fried, the two largest contributors to political campaigns who worked at FTX were Nishad Singh and Ryan Salame. Neither has been charged with any wrongdoing, according to campaign finance records. Mr. Singh, like Mr. Bankman-Fried, largely contributed to Democratic candidates and Mr. Salame mainly to Republican candidates.

The new indictment, while adding some new details, still leaves a lot out:

  • Who were the recipients of SBF’s allegedly illegal political contributions?
  • How much in total did SBF secretly contribute?
  • Who exactly were the straw donors?

One hint of the scope of illegal giving comes up obliquely in the new indictment:

The internal Alameda spreadsheets, however, “noted over $100 million in political contributions, even though FEC records reflect no political contributions by Alameda for the 2022 midterm elections to candidates or PACs.”

For your additional reading pleasure:

Mother Jones: Sam Bankman-Fried Was Indicted for Hundreds of Illegal Campaign Donations. Who Else Knew?

Law&Crime: Sam Bankman-Fried’s secret campaign donation strategy was ‘woke s***’ for liberals and ‘dark’ money for GOP, indictment says

NYT: New Details Shed Light on FTX’s Campaign Contributions

Latest On the Jack Smith Investigations

A few new developments for those tracking Special Counsel Jack Smith closely:

  • Smith has filed a motion to compel former Vice President Mike Pence to testify to a DC grand jury investigating 2020 election subversion. Notably, it appears to be in response to former President Trump’s legal team raising executive privilege to block Pence’s testimony, not Pence’s own announced gambit to avoid testifying using the Constitution’s Speech or Debate Clause.
  • The DC Circuit Court of Appeals heard oral arguments on whether the Speech or Debate Clause bars the Justice Department from accessing the contents of the phone of Rep. Scott Perry (R-PA). It didn’t go particularly well for the Justice Department.
  • The chief district judge in DC declined a media request to unseal some of the secret legal proceedings involving the Jan. 6 grand jury and Trump’s claims of executive privilege.
  • New details on one subset of classified materials ultimately found at Mar-a-Lago, via The Guardian.

Trump Win in 2024 Will Unleash A Wave Of Retributions

A taste of what’s to come:

A conservative non-profit group allied with former President Donald Trump urged “Hill staffers and their colleagues” to cut off meetings with any former Jan. 6 committee staffers who have since joined firms that lobby.

In a letter sent to hundreds of recipients on the Hill, the dark money group American Accountability Foundation listed the names of the former committee staffers and their titles — along with their new employers and links to their firms’ clients — all of whom they urged to blacklist.

Strzok And Page May Get To Depose Trump And Wray

The illicit affair between the two senior FBI figures played prominently in Trump’s attacks on Special Counsel Robert Mueller’s investigation. Peter Strzok and Lisa Page have each filed separate lawsuits against the government arising from the that whole fiasco, and they’re one step closer now to being able to depose former President Trump and FBI Director Chris Wray.

Steven Bannon Sued By His Own Lawyer

A law firm that represented Steve Bannon in two of his federal prosecutions claims he still owes it nearly half a million dollars for services rendered.

Intolerable

Joyce Vance on former Arizona Attorney General Mark Brnovich deplorable conduct in pushing the Big Lie and burying his office’s own investigation debunking it.

Carlos Watson Arrested And Charged With Fraud

A year and a half after Ben Smith’s bombshell media column (“bombshell media column” is something no one has ever typed, right?), Ozy Media and CEO Carlos Watson have been charged with fraud in a federal indictment in Brooklyn.

Josh Marshall On Pence 2024

Simon Rosenberg Is Leaving NDN

Ron Brownstein: Why This Democratic Strategist Walked Away

Quite A Map

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‘​​It Was An International Conspiracy’: Lawsuit Follows A Half Century Of Pain And Questions For Malcolm X’s Family

A planned lawsuit from the family of slain civil rights leader Malcolm X follows decades of trauma and lingering questions for his daughters. The $100 million wrongful death suit was announced on Tuesday by attorney Ben Crump, who said he was providing “formal notice” to the City and State of New York, the FBI, and the CIA, as well as other federal agencies. 

“For this great injustice, we will be filing a wrongful death lawsuit against these governmental entities for $100 million on behalf of his daughters that are coming forward,” Crump said. “But there is no measure of money, there is no measure of explanation that they could ever offer this family. The only thing they can do is try to right a historic wrong, not just for his family, but for his people and this world. We have to right this historic wrong.”

Malcolm X was shot and killed on February 21, 1965 at the Audubon Ballroom in New York City. Multiple gunmen were involved in the assassination. Three men were arrested and convicted of taking part. Two of them have since been exonerated. 

Crump announced the lawsuit at The Malcolm X & Dr. Betty Shabazz Memorial and Educational Center, which is inside the former ballroom. Crump was flanked by two of Malcolm X’s daughters, Ilyasah and Qubilah Shabazz, who would be among the plaintiffs in the suit. 

Qubilah, who has rarely spoken to the press, did speak with me in 2010 as I was completing a Columbia University School of Journalism master’s thesis project on the assassination. She discussed the experience of losing her father and her persistent belief that a government conspiracy was behind his death. 

“I have never gotten over it. My father loved me and that was taken from me. My life was a total nightmare after he died,” Qubilah said in an interview for the project, which has not previously been published outside of the university. 

During a brief telephone conversation conducted during the 2010 research project, another one of Malcolm X’s daughters, Gamilah Shabazz, who Crump also identified as one of the plaintiffs, suggested she too believed there were larger forces behind her father’s death before declining to comment further. 

“You know, it was an international conspiracy,” Gamilah said. 

Ilyasah Shabazz, another one of Malcolm X’s daughters who is bringing the suit, is the only member of his family who spoke at Crump’s press conference. Her family is looking for “the truth” and to put an end to their “unanswered questions,” she said. 

“We want justice served for our father,” said Ilyasah, who did not immediately respond to an interview request for this story.  

Qubilah, who was four years old when her father was killed, said during her 2010 interview with me that she “blocked out a lot” for a year or two after his death and “didn’t cry for a few years” until seeing a photo of his body brought the memories flooding back.

“My father was the soft, caring, playful parent… my father never gave us speeches at home, he gave us love,” Qubilah said. “When he died, that was all gone.”

Qubilah declined to comment on record for this story. Gamilah could not be reached.

Police look down from the top of a nearby building (background) as Malcolm X addresses a Black Muslim rally in Harlem. (Getty Images)

It’s Not Just About The Triggermen

There are extensive questions about Malcolm X’s killing. Only one man, who was named Talmadge Hayer, has admitted to shooting Malcolm X. Hayer, who later became known as Mujahid Halim, was arrested at the scene of the crime after being shot in the thigh by one of Malcolm X’s bodyguards. Over the years, witnesses have offered conflicting accounts of what happened that day, stating that there were anywhere from three to five people involved in the shooting.

Two other men, Norman 3X Butler and Thomas 15X Johnson, were convicted along with Hayer in 1966 and subsequently sentenced to life in prison. All three men were members of the Nation of Islam, a Black Muslim group that Malcolm X helped lead in the first years of his political career. Both Butler and Johnson consistently maintained their innocence, but they were not released from prison until the 1980s. Hayer, who was paroled in 2010, confessed to taking part in the killing. However, he said on multiple occasions that the other two men convicted alongside him were innocent and claimed he had four other accomplices.  

In November 2021, following a joint investigation conducted by the Manhattan District Attorney’s Office and lawyers for the two men, Butler and Johnson, who are now known as Muhammad Abdul Aziz and Khalil Islam, had their convictions thrown out. Former Manhattan District Attorney Cy Vance launched the investigation after a Netflix documentary series released between 2019 and 2020 explored the case. According to the New York Times, investigators ultimately determined prosecutors, the Federal Bureau of Investigation, and the New York City Police Department withheld exculpatory evidence and “failed to disclose the presence of undercover officers in the ballroom at the time of the shooting.”

At the press conference announcing the lawsuit, Crump said it was prompted by the exonerations. Crump, who did not immediately respond to requests for comment on this story, also suggested he has uncovered further evidence.

“The district attorney’s office in the city … admitted that these gentlemen were wrongfully convicted and that there was exculpatory evidence that would have exonerated them that they did not release or reveal,” Crump said. “There are many things that will be put forth in our lawsuit that speaks to this factual evidence, things that many people have speculated over the decades, but were not substantiated. We believe that now it could be substantiated based on the recent exonerations.”

Crump, who has become a prominent civil rights leader in his own right while seeking civil judgments for Black people in high profile cases of alleged injustice, also said his team will use the suit to pursue more new evidence. 

“We plan on taking depositions of many of the figures that were involved — either rightfully or wrongfully — in the assassination of Malcolm X. It’s not just about the triggermen. It’s also about those who conspired with the triggermen to do this dastardly deed that killed that 39-year-old young father,” Crump said, later adding, “We believe we’ll be able with the force of law to subpoena and depose any individual that has relevant information. That’s what has never happened in the aftermath of the assassination of Malcolm X.” 

In response to a question from a reporter, Crump said he believed government agencies were involved in Malcolm X’s death. 

“The conspiracy included many, many individuals and many, many government entities … and many affiliates of those agencies,” Crump said.

Crump specifically named the FBI and its former director J. Edgar Hoover, who spearheaded aggressive efforts to surveil and sabotage civil rights activists. Malcolm X’s FBI file, which has been partially declassified, shows that, during his life, Malcolm X was monitored by the bureau and a slew of other government agencies including the Central Intelligence Agency, the State Department, Army, Air Force, and Naval Intelligence Units, the Department of Justice, the Secret Service, and several local police departments including the NYPD. 

Crowds and police officers stand outside the Audubon Ballroom. (Getty Images)

Staring At The Fire

Malcolm X was killed shortly after a bitter break with his former allies in the Nation of Islam. In his autobiography, which was originally published in the year before his death, Malcolm X wrote about how he was a “hustler” as a young man. He described selling drugs and engaging in burglaries. He joined the Nation of Islam during a stint in prison between 1946 and 1952. Upon his release, he rose to become one of the top evangelists for the religion, which blended the Koran and Black nationalist ideology. However, by the late 1950s, Malcolm X began to drift apart from the Nation of Islam’s leader, Elijah Muhammad. 

In March 1964, Malcolm X formally broke away from the Nation of Islam. He went on to found two organizations of his own: Muslim Mosque Incorporated and the Organization of Afro-American Unity. MMI was a religious organization while the OAAU was focused on self-defense programs and presenting the concerns of Black Americans in front of the United Nations. The 11 months between Malcolm X’s departure from the Nation of Islam and his death were marked by constant and escalating infighting between his allies and Elijah Muhammad’s inner circle. Both Muhammad and Malcolm X claimed the other threatened their life through intermediaries.

On February 14, 1965, a week before his death, the threats turned to violence. Unidentified assailants threw a molotov cocktail at Malcolm X’s home in Queens, New York while he and his family slept. Quibilah Shabazz told me she was awoken by the blaze. 

“I woke up because I’m hot, and I open my eyes, and there are flames coming through the window,” she said. 

“I thought it was kind of neat to see fire flying through the window, and as I’m staring at the fire, some sparks hit me in the left eye and that’s when I decided to call for my father,” Qubilah recounted. 

According to Qubilah, Malcolm, who was wearing “his long johns,” grabbed his family and his rifle and ran out into the driveway. As his wife and daughters fled to a neighbor’s house, Qubilah said Malcolm kept watch outside, gun in hand. 

“If that Molotov cocktail had gone through the window rather than hitting my house and dropping, it would have hit my bed,” said Qubilah. 

In the week following the firebombing, Malcolm X’s wife, Betty Shabazz, who was pregnant, and her daughters stayed with family friends. Malcolm X moved between hotels to avoid detection. 

On the day Malcolm X was shot, he appeared at an OAAU rally at the Audubon. Due to the explosive climate, women and children were advised not to come to the Audubon rally. However, Qubilah Shabazz said that, shortly before he was due to appear, Malcolm called his wife, Betty, and asked her to bring the other four children to see him speak. Qubilah isn’t sure why he made this last-minute request. 

“No one knows why he changed his mind,” said Qubilah. “He probably wanted to see his family one last time.” 

Malcolm X’s wife and daughters were sitting in the ballroom when the shots rang out. 

“It was total mayhem,” Qubilah said, “I can remember there being chairs knocked over, people rushing to get out of there.” 

Policemen who were stationed across the street at Presbyterian Hospital did not secure the scene, even as Malcolm X’s bodyguards implored them to stop the assassins from escaping. Despite the large crowd, NYPD officers only took three witness statements.

Betty Shabazz and her attorney, Percy Sutton, leave the morgue at Bellevue Hospital in New York after identifying the body of her husband. (Getty Images)

In July 1995, Qubilah was arrested and charged with attempting to hire a hitman to kill Louis Farrakhan, who was one of Elijah Muhammad’s top lieutenants and now heads the Nation of Islam. Qubilah maintained the government was trying to frame her. Farrakhan, who has apologized to Malcolm X’s family for contributing to the volatile climate that led to Malcolm X’s death, supported Qubilah’s defense. Farrakhan’s position and the government’s reliance on a criminal informant led to the charges against Quibilah being dropped. 

For her part, in the 2010 interviews, Qubilah said she believed “the government” was “behind” her father’s killing. However, she also suspected the people who wanted Malcolm X dead had help from inside of his inner circle. 

“I want to know who actually facilitated it,” Qubilah said at the time. 

While she and her sisters have deep questions about the circumstances of her father’s killing, as of 2010, Qubilah doubted she would ever get answers. 

“I can’t see that there will ever be any closure on this. The powers that be, I think they believed my father got what he deserved,” Qubilah said, later adding, “Justice has definitely not been done.”

Now, after more than half a century, that may be about to change. 

A Trump-DeSantis Origin Story

A friend sent me an article from back in March 2016 which provides some interesting perspective on the current resurgence of Social Security politics and the various Republicans vying to be the “post-Trump” candidate for President while Trump refuses to leave the stage. It also has particular relevance to Ron DeSantis, which we’ll get to in a moment.

But first some context.

The piece is a Times article from March 2016. So it is early in the Trump takeover of the GOP but when it still wasn’t entirely clear he’d be able to pull it off. The subtext of the article is that while many Republicans focused either on the power of Trump’s chaotic personality or the red meat of immigrant bans and xenophobia to explain his success, there was something else in the mix. There was a whole population of people who had closed the door on ever supporting Democrats but were left entirely cold by the GOP’s reflexive focus on tax cuts, free trade and cutting “entitlements.”

Continue reading “A Trump-DeSantis Origin Story”

DeSantis Begins Courting Another Breed Of Trump Supporter

As the 2024 presidential race kicks off, Florida Governor Ron DeSantis has begun to soft launch his own campaign. And he appears to be testing the waters of a tempestuous Red sea to see if he can catch the big fish: each faction of former president Donald Trump’s fanbase.

Continue reading “DeSantis Begins Courting Another Breed Of Trump Supporter”

Oath Keeper Alaska Rep Unanimously Censured By Colleagues Over Abused Children Remarks

State Rep. David Eastman (R), a member of the Oath Keepers, was formally reprimanded with a censure Wednesday by the Alaska House of Representatives for asking whether there could be economic benefits to the deaths of abused children.

The vote was 35-1 with Eastman being the only one to vote no.

Continue reading “Oath Keeper Alaska Rep Unanimously Censured By Colleagues Over Abused Children Remarks”

Scott Perry Fights To Block DOJ From Accessing His Cell Phone

The D.C. Circuit Court of Appeals is hearing arguments on Thursday over whether to allow federal prosecutors to access the cell phone of Rep. Scott Perry (R-PA).

Continue reading “Scott Perry Fights To Block DOJ From Accessing His Cell Phone”

The Most Important Election This Year Is Happening In Wisconsin

This article is part of TPM Cafe, TPM’s home for opinion and news analysis, and first appeared on the Substack blog Can We Still Govern?

We pay a lot of attention to SCOTUS picks, for very good reason, but less to state courts. But the most important election this year is arguably for the Wisconsin state Supreme Court seat that Wisconsin voters will choose in April. It will also be the most expensive judicial election in American history, and a test of whether donor money will be enough to elect an unpopular far-right candidate.

In the primary, Judge Janet Protasiewicz and Justice Daniel Kelly advanced, the former being the clear choice of Democrats in the state, and the latter favored by Republicans, though the elections are nominally nonpartisan.

Why is this election so important

Wisconsin is a purple state that governs like a deep red state. The most obvious reason for this is an extreme gerrymander that has ensconced a permanent Republican majority in the legislature regardless of how well Democrats perform. This gerrymander was created under a Republican trifecta, but persists into its second decade even with a Democratic governor because the 4-3 conservative majority picked Republican maps.

That gerrymander, and the court’s blessing of it, has contributed to democratic backsliding in large and small ways. Most obviously at stake is the right to an abortion. Right now, Wisconsin’s abortion laws date back to 1849, meaning abortion is not available in the state, even though about 60% of voters have expressed consistent support for legal abortion. If Republicans maintain control of the courts, the gap between people’s preferences and policy will continue.

In less dramatic ways, the courts have contributed to democratic backsliding by:

  • Upholding an unprecedented powergrab in 2018, when the Republican legislature stripped the newly-elected Democratic governor and attorney general of powers for the crime of defeating their Republican opponents.
  • Allowing former Governor Walker appointees to continue to keep positions in state government years after their term ended, while co-partisans in the legislature block the nomination of their replacements.
  • Making it harder to vote, most recently by banning dropboxes after Republicans said they gave Democrats an unfair advantage by, uh, making it easier for people in more urban areas to vote.

But the most dangerous threats from the Wisconsin Supreme Court may lie ahead of us, and have national implications. In the last two presidential elections, Wisconsin was a swing state decided by about 20,000 votes. In 2020, Trump tried to get 221,000 votes from heavily Democratic counties tossed. He failed, but three of the four justices were shockingly open to going along with Trump’s suggestion. The gerrymandered legislature could easily have switched state electoral votes from Biden to Trump if the courts had given them the green light. This was a near miss, but as long as Wisconsin remains a swing state with a conservative majority on the court, the risk remains.

Meet Daniel Kelly

So who is Daniel Kelly? The kind of guy who posted this at a shooting range fundraiser the day after a mass shooting in Wisconsin left five people dead.

Worst Machine Gun Kelly ever

Kelly has made clear he will maintain a ban on abortion. He has also committed to keeping the current gerrymandered legislative maps. This is not a surprise, since Kelly was chosen by then Governor Scott Walker to defend the maps in court in 2011. Walker then appointed Kelly to the state Supreme Court when a vacancy arose in 2016, despite lacking any judicial experience. Kelly had four years on the court before he had to run for his seat, at which point he was soundly beaten.

Kelly’s close ties to the GOP mock the notion that he is anything other than a rubber stamp for the party. After all, he campaigned from state GOP headquarters in 2020, and has been a paid consultant for the party in recent years on election issues (which he would certainly rule on as a justice).

Perhaps most disturbing, Kelly’s $120,000 consulting gig occurred as party members organized fake electors to try switch the state’s electoral votes from Biden to Trump. Kelly, as counsel on election issues, was part of this discussion. According to Daniel Bice at the Milwaukee Journal Sentinel:

Kelly was at the center of the discussion in December 2020 with top Wisconsin Republicans over their highly controversial plan to covertly convene a group of Republicans inside the state Capitol in the weeks following Donald Trump’s loss to Joe Biden to sign paperwork falsely claiming to be electors.

Former state Republican Party Chairman Andrew Hitt said in a deposition last year to the U.S. House committee that investigated the Jan. 6, 2021, attack on the U.S. Capitol that he and Kelly had “pretty extensive conversations” about the fake elector scheme. Kelly was serving as the party’s “special counsel” at the time.

Money and judicial elections

Didn’t Republicans have a better candidate? They did. Democrats did not want to face Judge Jennifer Dorow, who had gained national attention after presiding over a high-profile case.

Kelly’s main selling point to voters was money. More specifically, that the billionaire Uihlein family were behind him, having already bankrolled his campaign with millions to the point that Kelly did not have to spend any of his own campaign resources on TV ads.

Liz and Dick Uihlein were described by the New York Times in 2018 as “the most powerful conservative couple you’ve never heard of.” Since then, their spending has only increased.

Much of that money goes to far-right candidates, reflecting a family tradition where the Uihlein’s funded the John Birch Society, George Wallace and the original American First group.

Uihlein money dragged Senator Ron Johnson over the finish line in a closely fought 2022 Senate race, after Johnson had personally intervened to insist on a tax loophole that saved them hundreds of millions.

As they have spent more money, the Uihlein’s have favored election deniers who campaign on the claim that Trump won, or groups that spread such lies. According to the Brennan Center, the Uihleins spent “almost $63 million to election denial candidates and super PACs supporting them” in the 2022 election cycle. The Uihleins have also poured tens of millions into state court races guessing, probably correctly, that the return on investment is higher relative to spending on other races.

So the question is: can a far-right and relatively unpopular candidate be elected so he can maintain a pattern of judicially-driven democratic backsliding that he helped to create? The answer depends on how much a single billionaire family can sway the electorate.