Stabenow to donate $20K contribution from disgraced FTX co-founder

Washington — Michigan Democrats are among the politicians looking to shed the campaign donations that they received from disgraced FTX co-founder Sam Bankman-Fried after he was indicted last week on charges related to the collapse of the cryptocurrency exchange FTX.

An aide to Sen. Debbie Stabenow, D-Lansing, said she would be donating Bankman-Fried’s contributions to a local charity. Stabenow's victory fund received $20,800 from Bankman-Fried, including $5,800 that was transferred to her campaign, according to federal disclosures.

As chair of the Senate Agriculture Committee, Stabenow introduced a bill with Sen. John Boozman, R-Arkansas, that would give the Commodities Futures Trading Commission a greater role in regulating cryptocurrency. Bankman-Fried reportedly supported the legislation.

The campaigns of U.S. Rep. Haley Stevens, D-Birmingham, and Democratic congressional candidate Carl Marlinga of Sterling Heights each received the maximum donation of $2,900 each from Bankman-Fried.

Marlinga, who lost the election to Republican John James, said Friday he wasn’t aware of the donation. But rather than donating to charity any contributions from Bankman-Fried, Marlinga said campaigns should hold onto them to allow regulators to claw back the money.

"If this guy is committing fraud, it's likely he comingled company property with his own. Why give it to charity when we could all just hold it for a while and make sure it goes back to regulators for restitution purposes, for the victims?" said Marlinga, a former prosecutor and judge. "But if the regulators don't want it back, it will go to charity."

Stevens spokeswoman Larkin Parker said her campaign is holding onto the money at the request of bankruptcy authorities who might be seeking to reclaim it.

Protect Our Future PAC, which was financed by Bankman-Fried, also tried to influence Michigan elections. It spent $1 million on independent expenditures — TV and digital ads — in support of state Sen. Adam Hollier’s run for Congress, according to FEC reports. Hollier lost the 13^th District Democratic primary in August to state Rep. Shri Thanedar.

The indictment against Bankman-Fried includes eight counts, including wire fraud, money laundering, as well as conspiracy to defraud the United States and violation of campaign finance laws.

More:Sam Bankman-Fried's downfall sends shockwaves through crypto

Prosecutors said Bankman-Fried doled out "tens of millions" of dollars in illegal political contributions to both Democrats and Republicans using customer money from the investment firm he controlled, Alameda Research.

"These contributions were disguised to look like they were coming from wealthy co-conspirators, when in fact the contributions are funded by Alameda Research with stolen customer money," Damian Williams, the U.S. attorney for the Southern District of New York, said at a news conference Tuesday.

"And all of this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington."

Williams asked that any person, entity or political campaign that received "stolen customer money" to work with prosecutors to "return that money to the innocent victims."

Bankman-Fried, who was arrested last week in the Bahamas, made about $70 million contributions during the 2022 election cycle. Prosecutors say the investigation is ongoing.

mburke@detroitnews.com