Welcome back to The Stratosphere, I’m Teddy Schleifer. Tonight, fresh reporting on Trump’s perfectly furious phone call with Peter Thiel, some scoop on the former FTX lawyer now buying up its debtors’ bankruptcy claims, and the incredible John Ray III lawsuit accusing S.B.F.’s parents of enriching themselves. More on all that, below the fold.

But first…

• Steyer Time: Next week marks the beginning of the Q3 Silicon Valley presidential fundraising sweepstakes that I wrote about in my last email. Among the festivities are two well-publicized events featuring Joe Biden alongside Democratic fundraisers like Mark Heising (Silicon Valley) and Gretchen Sisson (San Francisco).

  More recently, however, I’ve also learned of a much quieter, much more exclusive event on Biden’s fundraising calendar: an ultra-high dollar finance event put together by Tom Steyer, the billionaire mega-donor who recently lent Biden his compound at Lake Tahoe for some presidential R&R. Steyer’s fundraiser on September 27 is expected to be focused on climate issues, and is being kept closer to the chest—there is no big invite going around for this one. But you can read about it in Puck...

The call might have begun friendly enough, but it was pretty contentious by the end, according to three people with knowledge of the conversation. Trump wanted to see Thiel do more for him, just like the billionaire had in 2016, when Thiel spent millions on his behalf and spoke at the Republican National Convention. But Thiel, who has taken a step back from politics since 2022, expressed his desire to not be “at the center of the hurricane” this time around. Thiel had taken plenty of flak during the midterms, and he was seeking to de-escalate his political involvement.

Trump, of course, demands loyalty, and he feels like Thiel sort of owes him one (even though Vance has been good for Trump and endorsed him). So he is, unsurprisingly, fuming, feeling as though Thiel “screwed” him after all Trump did for his homies during the midterms. And Trump, I’m told, let him know it.

The tension between the two began shortly after the midterm election, when Trump’s aides at his super PAC asked Thiel for a donation, which he declined to provide. Perhaps Trump figured things would change if he placed the call himself. It’s not personal, Thiel has told everyone: The Silicon Valley billionaire has not donated to any Republican presidential candidate this cycle and is sitting out the primary entirely. Thiel is privately supportive of Trump, sure, but he doesn’t want to get into the craziness of presidential politics. He also feels that his money wouldn’t make a difference at a time when so much of Trump’s super PAC cash is going straight to his criminal defense fund, rather than television ads. Trump is going to win the primary anyway, Thiel feels, and in some ways he can even defend his neutrality as actually a pro-Trump position, given how much a $10 million check would move the needle for Nikki Haley, say, or Vivek Ramaswamy or Tim Scott.

Of course, Trump and Thiel were never actually close, contrary to how their relationship has been portrayed. Trump feels resentment toward him explicitly because of the midterms, not because his golfing buddy is suddenly stingy. Indeed, Thiel’s relationship with Trump has always been exaggerated by the media and Silicon Valley onlookers; he was not in Trump’s innermost circle of business leaders. Thiel developed a good relationship with Steve Bannon, yes, and Jared Kushner, but Thiel is no Tom Barrack or Woody Johnson in Trump’s orbit.

Meanwhile, Thiel also has to decide whether he’ll support Blake Masters for a potential second run at the Senate in Arizona. Naturally, Masters is cautious about entering a G.O.P. primary against Kari Lake, who is now signaling that she will run for the seat herself. Masters has told others that he sees himself as tonally a more digestible alternative for the Glendale suburban set. But Trump called Masters, I’m told, and, as the Times reported, made it abundantly clear that he’d be supporting Lake in a contested primary.

Does Masters really want to go up against the Trump machine? He’s still evaluating, I’m told. It’s not clear to Thiel allies whether Thiel, given his desire to be out of the hurricane, would do anything big to support Masters a second time around. One person close to Thiel’s political shop predicted that he’d try to help Masters, but differently than he did in 2022, when Thiel’s backing engendered some controversy. “I think he would still do it but he would try to hide it or make it less obvious,” my source predicted.

Yet I’ve learned that is what has happened at FTX, where a few former executives are trying to help investors find people who want to sell their claims. One of those executives is Ryne Miller, the former general counsel of FTX U.S. who played an integral role in the bankruptcy proceedings last November. Miller has been quietly volunteering as a quasi-broker, helping a group of investors who are approaching debtors with offers, sources tell me. Those debtors—equity holders, former employees, etcetera—could get immediate cash, about 35 cents on the dollar, in exchange for relinquishing their claims to the investor group that Miller is helping. After all, victims in the Madoff blowup had to wait a decade to get repaid.

The investor group that Miller is helping is led by Tim Babich, a Santa Barbara-based money manager with expertise in distressed assets, who has been trying to track down people with claims. Miller declined to comment when I reached him this week, but I’m told he has been a key part of the effort. Coincidentally, Miller just launched his own firm, Miller Strategic Partners, to advise crypto companies and the like. As a former Sullivan & Cromwell partner who spent two years as a top executive at FTX, Miller obviously has tons of relationships with existing debtors, and he can help Babich get in touch with folks who might be sellers, which can be tough. Nevertheless, it’s also a little risky for Miller, who could be a witness in the criminal case next month.

Nota bene: The deadline for debtors to submit a claim to FTX is the end of the month.

I humbly consider myself the world’s foremost chronicler of Mind the Gap—hey, we all have our hobby horses—having broken the existence of the organization in the first place back in January 2020 in a series of pieces (that are referenced in the lawsuit). I’ve also written extensively about the way the Bankman-Fried brothers were absolutely core to the whole Mind the Gap operation, especially early on—a narrative affirmed by FTX’s lawsuit today, which rests in part on internal communications between the family.

The group began in the aftermath of a disappointing Hillary Clinton “victory party” on Election Night 2016, at the Bankman-Fried home, when Barbara began to consult a network of Stanford Law School friends about ways to channel Silicon Valley money into political influence. On January 17, 2018, she emailed some progressive donors, Democratic consultants, and university colleagues, describing modest goals for what she described as a “risk-neutral” donor network. One of the members of the inner circle was Gabe, Sam’s brother, who helped produce the data analysis to convince large donors to back the group, according to emails I reviewed earlier this year.

Sam’s role was substantial, too: A source once told me that Barbara claimed that Sam “wrote the algorithm” that Mind the Gap used, something the org has previously denied. “Sam Bankman-Fried has never held any role at Mind the Gap, formally or informally,” Marissa McBride, the group’s executive director, told me earlier this year. “Bankman-Fried contributed to some of the programs recommended by Mind the Gap, though he was not the Network’s largest individual donor and his contributions accounted for less than 2 percent of the total raised by the organization since its founding.”

That math might be true, and yet the FTX lawsuit suggests that this statement significantly undersells Sam’s role at the organization in the years after its founding. Among other things, FTX argues that Barbara was very concerned with the optics—much like Sam was in his political giving. In a 2021 email, for instance, Fried suggested that a $1 million donation to Mind the Gap come from Nishad Singh rather than Sam so as to not create the impression that the organization was “a family affair.” That’s not illegal, as long as the money actually came from Singh. But FTX claims that just a day prior to that gift, Alameda Research transferred $1 million to Nishad. FTX lists other examples of times when Singh made suspiciously timed contributions to political entities just after receiving money from Alameda.

Mega-donors are always thinking about the optics of their gifts these days. That’s not a crime. But the latest allegations further illuminate just how involved Sam was in routing gifts to Mind the Gap and its preferred groups. The suit also implies that Barbara was aware of how the loans from Alameda financed the political donations of FTX executives. In mid-2022, for example, FTX alleges that Sam was agreeing with his mom’s plan to possibly “substitute someone else’s name” for his own gifts if he was going to keep making contributions to disclosed entities (though, crucially, there’s no evidence that actually happened).

A lawsuit is an argument, and there’s no guarantee that these emails are in the right context. Joe Bankman and Barbara Fried’s lawyers vehemently denied the allegations from FTX in a joint statement Tuesday. “This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins,” said attorneys Sean Hecker and Michael Tremonte. “These claims are completely false. Mr. Ray and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better.”

But I’ve heard that for plenty of Democrats, there was always a feeling that the line between pitching Barbara, pitching Gabe, pitching Mind the Gap, pitching Sam, and pitching FTX executives was awfully thin. This lawsuit shows why.