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Decoding the S.B.F. Political Conspiracy

The allegation in the indictment doesn’t concern the fact that S.B.F. and his allies coordinated their political contributions—instead, the S.D.N.Y. describes something far more brazen.
The allegation in the indictment doesn’t concern the fact that S.B.F. and his allies coordinated their political contributions—instead, the S.D.N.Y. describes something far more brazen. Photo: Gotham/GC Images
Theodore Schleifer
February 23, 2023

On Thursday, four new charges were unsealed against Sam Bankman-Fried, including conspiracy to commit bank fraud and securities fraud. The superseding indictment could add decades to a potential prison sentence if S.B.F. is convicted. In Washington, however, people following the FTX legal saga will be most interested in the fourteenth page of the 39-page document, which alleges in novelistic detail how S.B.F. and two co-conspirators absconded with customer funds to make hundreds of illegal political donations, totaling tens of millions of dollars.

Ever since S.B.F. was first indicted, after all, political operatives have been anxiously awaiting further details about what prosecutors described as a straw-donor scheme involving money from FTX. Now we have answers. The allegation in the indictment doesn’t concern the fact that S.B.F. and his allies coordinated their political contributions—activity that I have previously reported on, and which is not illegal. Instead, the Southern District of New York describes something far more brazen. According to the new indictment, S.B.F. and his team directed two unidentified FTX executives to make contributions in their own names for political purposes, then repaid them with loans from Alameda Research, the hedge fund that was connected to FTX, using money drawn from customer deposits.