Earlier this year, Gov. Tina Kotek and the Democratic Party of Oregon were under pressure to return a $500,000 contribution to the party in 2022 from Nishad Singh, the 27-year-old wunderkind director of engineering at FTX, the disgraced and now bankrupt crypto company.
John Ray III, the new boss of the bankrupt crypto exchange FTX, pushed to get the money back, but the party stalled, likely hoping the passage of time would diminish any public pressure to return Singh’s donation.
But the pressure didn’t let up. Finally, in June 2023 the party paid the piper, repaying the $500,000 to federal authorities, but not from the party’s coffers. Instead, the money came from the campaign accounts of Gov. Kotek, Sen Ron Wyden (D-OR), Sen. Jeff Merkley (D-OR) and three unnamed Democratic U.S. House members.
Rep. Val Hoyle, (D-OR), elected to the House of Representatives in Nov. 2022 by Oregon’s 4th Congressional District, could learn something from all this.
Don’t count on running out the clock on malfeasance.
Hoyle is trying to pull the same delaying tactics in a situation where the state’s Bureau of Labor and Industries (BOLI) wants her to turn over her personal cellphones so the state can probe them for messages relating to state business Hoyle may have conducted outside public scrutiny when she was Labor Commissioner. In particular, BOLI is interested in any communications related to the controversial cannabis dispensary chain, La Mota.
Hoyle has resisted complying with the state’s request, insisting, instead, that she would review her personal devices and determine what was relevant to turn over to the state.
Talk about the fox wanting to guard the henhouse.
“She’s obligated to turn over those devices so they can be properly searched,” Ginger McCall, who served as Oregon’s public records advocate during 2018-19, told Willamette Week. “I don’t think that the public should have to trust her to do her own search, because obviously there’s a conflict of interest there on her part.”
Hoyle’s intransigence makes it look like she has something to hide. She’s be wise to learn from the FTX case that stalling won’t work. We’ll shame her until she gives in.
Political parties “…are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government…” said George Washington.
Washington may have preferred that the United States go forward with no parties, but since we’ve got them, the next best thing is to prevent one-party rule that strangles wise and fearless public policy and emboldens the perpetual winners.
That’s where Oregon has failed over a long time and all at once.
The Shemia Fagan scandal is just the latest illustration of rot in the body politic.
Secretary of State Fagan wouldn’t have signed up for a $10,000 a month consulting contract with Aaron Mitchell and Rosa Cazarest, owners of the La Mota chain of cannabis dispensaries, if she hadn’t thought she could get away with it. The cannabis entrepreneurs are, after all, high-profile Democratic donors.
Before the Fagan scandal erupted, the Democratic recipients of La Mota funds happily accepted them. Willamette Week’s Sophie Peel did some spade work, revealing La Mota contributions to the following Democrats:
Gov. Tina Kotek – $68,365
Secretary of State Shemia Fagan – $45,000
Senate President Rob Wagner (D-Lake Oswego) – $12,500
Senate Democratic Leadership Fund – $10,000
State Treasurer Tobias Read – $1,800
Rep. Andrea Valderrama (D-Portland) – $500
Labor Commissioner Christina Stephenson – $7,500
Multnomah County Chair Jessica Vega Pederson – $1,000
Rep. Dacia Grayber (D-Tigard) – $1,000
Rep. Hoa Nguyen (D-Portland) – $500
Rep. Annessa Hartman (D-Gladstone) – $500
Multnomah County District Attorney Mike Schmidt – $2,000
U.S. Rep. Earl Blumenauer – $3,500
Prior to the Fagan scandal, none of the Democrats who were recipients of La Mota money were apparently bothered by the fact the company was failing to pay its bills and taxes, according to an investigation by Willamette Week. Only after the Fagan scandal erupted did Democrats decide campaign contributions from La Mota were dirty money and scrambled to show their purity by pledging to donate those contributions to other worthy charitable causes.
Oregon’s Democratic Party also wouldn’t be so cavalier about all the campaign contributions it took from disgraced executives at FTX, the now bankrupt crypto company if they didn’t think they could get off scot free.
In their unbridled pursuit of power, Tina Kotek and the Democratic Party of Oregon chose to keep company with Nishad Singh, the 27-year-old wunderkind director of engineering at FTX. They welcomed his $500,000 contribution to the party’s campaign coffers in 2022.
But the wheels of justice have turned since Singh made the contribution. On Feb. 28, 2023, he pleaded guilty to six criminal counts, including conspiring to commit securities and commodities fraud, during a hearing in federal court in Manhattan.
He also pleaded guilty to defrauding the U.S. in a campaign-finance scheme in which he made illegal donations to political-action committees and candidates using funds from disgraced cyypto manager Sam Bankman-Fried’s crypto hedge fund Alameda Research.
John Ray III, the new boss of the bankrupt crypto exchange FTX, wants the $500,000 back, but the Democratic Party of Oregon has so far refused.
Fagan’s behavior is also reminiscent of the sudden downfall of Jennifer Williamson, a former House majority leader and a leading contender to be Oregon’s next secretary of state in 2020. Williamson suddenly dropped out of the race, attributing her action to a forthcoming story in Willamette Week about questionable expenditures of campaign funds when she served in the House.
Then there was Democrat Governor John Kitzhaber, who resigned in February 2015 amid a growing influence-peddling scandal involving him and his fiancee, Cylvia Hayes, becoming the state’s first governor to resign in disgrace.
Gov. Kitzhaber and Cilvia Hayes
Kitzhaber ‘s resignation came in the face of a state criminal investigation and a string of demands from top state officials to step down.
There have also been questionable actions by other Democratic leaders.
At one extreme, there was Neil Goldschmidt, a former governor, former Secretary of Transportation under President Jimmy Carter and ex-mayor of Portland. Goldschmidt, while Portland’s mayor during the mid-1970s, had sex on many occasions with a 14-year-old girl. Goldschmidt tried to define his actions as “an affair”.
He started having sex with the girl when he was 35 and married. She was a babysitter for his young children and the daughter of a neighbor who worked in his office.
A key element tying all these scandals together is the long Democratic rule in Oregon. It has led too many in the party to act with impunity, just as Richard J. Daily and the Democratic political machine ran Chicago with bare-knuckle politics for 21 years as dozens of politicians fed on the city’s political corruption.
Oregon hasn’t elected a Republican governor since 1982, when Gov. Vic Atiyeh won re-election. Republican s have also failed to achieve majorities in the Senate and House for ages.
Oregon has been ill-served by the concentration of political power in Democrat’s hands for so long that the party has an overpowering stench to it. As former U.S. Senator Pat Toomey (R-PA) put it, “Unchecked power pushes parties to excess regardless of which party is in power.”
In Oregon, it’s been the Democrats for far too long.
The cryptocurrency firm FTX has begun an effort to claw back payments made by its former management to politicians. FTX filed for Chapter 11 bankruptcy protection in the U.S. on Nov. 11, 2022. John J. Ray replaced Sam Bankman-Fried as FTX’s CEO.
The Oregonian has reported that a $500,000 contribution to the Democratic Party of Oregon PAC came from Nishad Singh, director of engineering at FTX.
FTX “intends to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced”, the company said on Dec. 19, 2022, sharing an email address – FTXrepay@ftx.us – that recipients could use to voluntarily return money.
“Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any subsequent transferee,” FTX added in a statement.
FTX.US made contributions totaling $21,882,932 in the 2022 election cycle, with 81.44% of that going to Democrats.
The Oregon Democratic Party hasn’t yet said what but will do so with Singh’s contribution. As of Jan. 5, 2023, the PAC had a cash balance of $333,139, according to the Oregon Secretary of State. That is down substantially from the $691,532 it had on hand as of Nov. 28, 2022, according to OpenSecrets.org.
My advice to the party. Take the high road. Don’t stall in hopes the public and the media will tire of the whole FTX affair. Repay the money. It’s the honorable thing to do.
Top executives at FTX, a major digital currency trading platform, are financing a high-priced communications war on behalf of Carrick Flynn, who hopes to outrun a primary field of Democrats seeking election to Oregon’s new Congressional District 6 seat. The primary will be held on May 17, 2022.
Carrick Flynn
Source: Northwest Observer
If Flynn wins the primary he will owe his win lock, stock, and barrel to wealthy crypto supporters.
Is this how we want our political campaigns to be financed? Do Oregonians really want candidates to be captured by special interests, particularly so early in the political process? And in this case, are we OK with the capturers being major players in the controversial and risky business of cryptocurrencies?
If you’ve paid attention to the plethora of television campaign ads already running in the Democratic primary race, you’ve noticed that the ones by the other candidates note at the end “paid for by” the candidates campaign committee. In Carrick Flynn’s case, most have said “Paid for by Protect Our Future PAC”.
The major backer of the PAC is FTX founder and CEO Sam Bankman-Fried, a 30-year-old American “Master of the Universe” billionaire who lives in the Bahamas.
FTX is incorporated in Antigua and Barbuda and headquartered in the Bahamas. The company officially opened its doors for trading in May of 2019. It enables trades of a variety of digital assets, such as Bitcoin, Ethereum, Solana and Dogecoin.
Sam Bankman-Fried (Source: New York Magazine)
Super PACs cannot legally coordinate with candidates, but many candidates find creative ways to work in concert with them that stretch the legal boundaries.
According to data filed with the Federal Election Commission (FEC), as of April 11, 2022, Protect Our Future had made independent expenditures in support of Flynn totaling $4,932,464.73 in 2022. The expenditures have been devoted to a wide range of activities, including radio, television and digital ad production and time purchases, lawn signs, direct mail, and get-out-the-vote phone calls.
On April 12, 2022, OPB reported that a political action committee affiliated with national Democrats, the House Majority PAC, had also purchased roughly $1 million of ads to help Flynn. The PAC’s television ads are already appearing.
Six of the nine Democrats seeking to win the primary put out a statement denouncing the move. “We strongly condemn House Majority PAC’s unprecedented and inappropriate decision…” the joint statement said. “We call on House Majority PAC to actually stand by our party’s values and let the voters of Oregon decide who their Democratic nominee will be.”
Interestingly, some of the money Flynn received from the House Majority PAC could be considered as a pass-through from Bankman-Fried. According to OpenSecrets,a research and government transparency group tracking money in politics and its effect on elections and policy, Bankman-Fried has also made substantial donations to the House Majority PAC.
It’s not hard to decipher Flynn’s potential appeal. He’s a climber with a hard luck story about his youth and a touch-all-the-bases career of prestige academic success at Yale Law School and international social justice-oriented work.* But to really pop in Oregon’s political world, he needed money, and FTX has given him a jump start.
“…the company’s executives are quietly emerging as crypto kingmakers in the nation’s capital as they spend millions to launch super PACs, bankroll congressional campaigns and recruit former government officials with an inside track on looming crypto regulations,” Politico observed in February. In other words, the “Our” in Protect Our Future most likely means the crypto industry.
Down the road, FTX may also have other interests that could bring into play a need for political support. The Generalist, a tech-focused weekly online publication, has speculated that the company may try to grow its footprint in sports betting, banking and social media. In this regard, Bankman-Fried has openly talked about his desire to build out a fully-fledged financial giant, a kind of monetary super-app handling payments, custody, and of course, investing across asset classes.
If Flynn wins the primary** and the election, will he be indebted to FTX’s interests as much as to Oregon’s. It’s damn hard not to think otherwise.
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*Flynn’s efforts to position himself as a true Oregonian resemble Nicholas Kristoff’s efforts to do the same in his failed quest to become Oregon’s governor. Flynn, 35, was born in Oregon, grew up here and graduated from the University of Oregon in 2008, but he has spent a substantial part of his adult life elsewhere, much of that overseas:
· 2009: Legal Clerk, The Carter Center, Monrovia, Liberia
· 2010: Legal Consultant, The Asia Foundation, Dili, Timor-Leste
· 2011: Volunteer, Volunteer, Progressio UK, Dili, Timor-Leste
· 2011-2012: Program Associate / Legal Consultant, The Asia Foundation, Dili, Timor-Leste
· 2013-14: Bernstein Human Rights Fellow, New Delhi Area, India
· 2014: Bernstein Human Rights Fellow, Petaling Jaya, Malaysia
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