If anything could jump-start the stalled effort to reform the role of money in politics. One might think it would be an epic scandal involving an overnight billionaire. Who became one of the nation’s biggest political donors.
But while the collapse of Sam Bankman-Fried’s crypto empire. Is already prompting changes in the crypto industry and beyond. The loophole-laced campaign finance rules. That allowed a 30-year-old executive to buy into. The controversial new industry are unlikely to change. Anytime soon, despite widespread public dismay. Over perceived corruption affecting friends and people in Washington.
“it’s going to change anything in Washington.
” Said Lawrence Lessig, a Harvard law professor and activist. Who ran for president in 2016 as a protest candidate for campaign finance reform. “The reality is Congress likes to have access to a lot of money. It’s an inside game they’re happy to play.”
Even critics of financial politics accepted Bankman-Fried’s checks. Including a major campaign finance watchdog group. And progressive lawmakers aligned with Sen. Bernie Sanders, I-VT.
For example, the Campaign Legal Center, a leading Washington group. That pushed for reform for two decades after it was founded by the former. Chairman of the Federal Election Commission, took $2.5 million from Bankman-Fried. Which it now says it will return because of “Bankman-Fried’s alleged actions.” … betrays CLC’s mission.”
The group told NBC News that it took Bankman-Fried’s money. After “careful scrutiny” that included “conferences. With other nonprofits who at the time vouched for its clear legitimacy.”
“We can’t change the past, but we can change the future,” the group said in a statement. “The CLC will now move forward, continuing our decades-long work. To ensure that every eligible voter can take part. And influence the democratic process.”
The sense of pessimism builds.
After repeated attempts to change Congress have died in the 13 years since. the Supreme Court opened the floodgates to unlimited and undisclosed “dark money” grants. Meanwhile, the Democratic Party, which has long championed campaign finance reform. Has gotten so good at the game. That it used more black money than. The Republicans during the 2020 presidential campaign. The Democrats’ last legislative package aimed at overhauling election. And campaign finance, H.R. 1, never had a real shot at making it out of Congress and, like many previous bills, stalled.
“We all wish we could like Superman, but we don’t jump off tall buildings.” Lessig said, explaining why few people have pushed for change since Bankman-Fried’s arrest.
Bankman-Fried, now awaiting trial on fraud and money. Laundering charges related to the collapse of cryptocurrency exchange FTX. has had his money spread as he became the second-largest donor to Democrats in 2022. And plans to spend $1 billion in 2024, making him would become. The largest political donor in American history.
He has also been charged with campaign finance violations.
Allegedly using “straw donors” to violate contribution limits. By giving money to allies who would then donate to politicians in their own names.
Lawmakers and regulators have moved to impose new rules. On the crypto industry, but there has been little discussion. — Let alone action — of preventing the next Bankman-Frides in Washington. From using their wealth to bend politics to their personal interests.
The new Congress introduced no campaign finance bills. No new policies from regulators, and not even a discussion of reform.
Lawmakers who received campaign cash from Bankman-Fried. And other FTX executives have shrugged off a collective shrug. About the system, with some even donating matching. Donations to charity or awaiting legal suits to retaliate against FTX customers.
Speaking to NBC News on condition of anonymity, a member of Congress. Who donated to Bankman-Fried said he had never spoken to Bankman-Fried. And instead believed he was a beneficiary of his funds. Because of his working relationship with Bankman-Fried’s brother. , Gabe, and his organization Guarding Against Pandemics. (Some critics insisted to NBC News that Bankman-Fried’s pandemic preparedness efforts. Were nothing more than a way to generate good publicity that, , served to advance his crypto agenda.)