Yes, Prosecutors Will Claw Back FTX Money From US Lawmakers
The DOJ reportedly sent a letter to lawmakers instructing them to surrender FTX donations to US Marshals
lev radin/Shutterstock modified by Blockworks
The Department of Justice has instructed lawmakers with FTX-linked political donations to hand over the cash, and at least some Congressional campaigns have complied.
Rep. Bob Latta, R-Ohio, was one of the campaigns the DOJ contacted earlier this year regarding political donations from FTX, as well as its associated subsidiaries and individual employees.
Ryan Salame, the former chief executive of FTX Global Markets, gave $2,900 to Latta’s campaign in October 2022, data from the Federal Election Commission shows. Salame gave a total of nearly $23 million to candidates during the 2022 midterm election cycle, almost exclusively to Republicans.
Latta’s campaign voluntarily transferred the funds shortly after receiving the notice from the DOJ, his team told Blockworks on Wednesday. The exchange appears to have taken place earlier this year.
A campaign that backed Lori Chavez-DeRemer, R-Ohio., also surrendered funds, a spokesperson told Blockworks.
“The funds were transferred so that people who were defrauded can receive some compensation for their losses,” the spokesperson added.
Reps. Marc Molinaro, R-N.Y., Elise Stefanik, R-N.Y., and Brian Fitzpatrick, R-Penn., also surrendered FTX-linked donations to US Marshals, according to multiple reports.
The Molinaro campaign confirmed with Blockworks that its donation had been sent to a US Marshals recovery fund. Offices of the other representatives did not respond to Blockworks’ request for comment on Wednesday. The Department of Justice likewise did not immediately return a request for comment.
The news of surrendered funds comes months after some lawmakers said they had or would be donating political contributions they received from the now-bankrupt exchange and its founder Sam Bankman-Fried, who is currently facing 13 federal charges.
Sen. Dick Durbin, D-Ill., and Rep. Jesús “Chuy” García, D-Ill., said in November, days after FTX’s bankruptcy filing, that they would donate the $2,900 they each received from Bankman-Fried.
Rep. Ritchie Torres, D-N.Y., told Blockworks in late November he had already donated his contributions to “a local charity to assist with holiday food distribution to families in need.”
Charities are not exempt from clawbacks, Jason Lilien, partner at Loeb and Loeb, said around the same time.
Surrendered and clawed-back funds typically go toward repaying customers, victims and creditors.
But the status of those broader efforts wasn’t immediately clear on Wednesday — extending to the voluminous number of charities that ended up with political donations, or for nonprofits Bankman-Fried donated to directly.
Update: Thurs May 18 at 10:32am ET. Added confirmation from Molinaro campaign.
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