CHICAGO — Chicago mayoral candidate Jesús “Chuy” García’s congressional campaign says it will cut a check for $2,900 to repay clients of a collapsed cryptocurrency exchange the same amount of money the disgraced former head of the business contributed to García’s reelection war chest.
The news came as lawyers representing former clients of the FTX exchange said earlier this week they would try to get back the tens of millions of dollars indicted FTX founder Sam Bankman-Fried lavished on political candidates across the U.S.
The cash García received was just a drop in the ocean of money Bankman-Fried splashed out to support campaigns and help fund political action committees on both sides of the aisle.
But the small payment has become a sizable headache for García, who’s getting hammered by mayoral campaign opponents for his connection to the now-indicted onetime crypto star.
FTX and the debtors who federal prosecutors allege Bankman-Fried swindled announced on Sunday they would be “sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors.”
García mayoral campaign spokesperson Antoine Givens said García’s congressional campaign received one of the confidential messages and said the campaign will return the money.
“The congressional campaign committee, like others, has been contacted to return the donation to the FTX Debtors’ representatives and the committee will comply to ensure any and all debtors receive the funds,” Givens said in an email.
García received the $2,900 contribution from Bankman-Fried in June and as the scandal was engulfing Bankman-Fried and FTX last fall García donated the same amount of money to local charities. Givens said García was “the first Democrat in the Illinois Congressional delegation” to make such donations.
But that hasn’t stopped political opponents from pouncing on the connection. Mayor Lori Lightfoot has been running a TV ad blasting García’s ties to the “crypto crook who stole his customers’ life savings.”
Another mayoral candidate, state Rep. Kam Buckner, questioned how a “self-proclaimed reformer” like García could “accept special interest support from a crypto billionaire whose industry’s future rests on members of Congress?”
A political action committee associated with Bankman-Fried also reported to the Federal Election Commission spending $199,854 on mailers promoting García’s candidacy in the 4th Congressional District, even though he was unopposed in the Democratic primary.
García has pointed out that “by law and by definition, I had nothing to do with” the spending by the Protect Our Future PAC. And Givens said FTX has not called on the García congressional campaign to return that money.
García won a third term in Congress in the November general election with about 68% of the vote over two challengers. Shortly thereafter, he announced he was running for mayor.
Other Illinois politicians also received contributions from Bankman-Fried, among them Democratic U.S. Sen. Richard Durbin, downstate Democratic U.S. Rep. Nikki Budzinski and Ald. Gilbert Villegas, 36th, who ran unsuccessfully in the 3rd Congressional District Democratic primary election. All three previously said they donated the money they got from Bankman-Fried to charities.
Villegas said Tuesday he had not been contacted by FTX to return the $2,900. He said last year that he gave that amount to Planned Parenthood of Illinois as the Bankman-Fried scandal was unfolding.
Budzinski spokesperson Philip Shelly said the Budzinski campaign got a letter from FTX about the donation, “and is currently reviewing the request with legal counsel.”
The Durbin campaign did not immediately respond to questions about whether FTX called on them to return the money.
In its statement about seeking repayment from politicians and PACs, FTX said making donations to charities “does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee.”
Protect Our Future also backed Chicago Democrat Jonathan Jackson’s successful run for a U.S. House seat in 2022, spending $500,065 on TV ads for his campaign in a payment reported to the FEC in June. FTX had not contacted the Jackson campaign about returning any of that money, a Jackson spokesperson said Tuesday.
Representatives of the Protect Our Future PAC could not be reached for comment about whether they will return to FTX investors the money the committee received from Bankman-Fried.
Bankman-Fried faces charges he defrauded investors of billions of dollars. He’s free on $250 million bond awaiting trial.
While the Securities and Exchange Commission alleges Bankman-Fried concealed from FTX investors that he was transferring their money to his privately held hedge fund for undisclosed investments and lavish real estate purchases, the money also went for large political donations, authorities allege.
A federal indictment against Bankman-Fried alleges he broke campaign finance laws “involving the making, receiving and reporting of a contribution, donation, or expenditure … ” and that he violated prohibitions on corporate contributions.
Federal investigators have not said political candidates violated campaign laws as part of the alleged Bankman-Fried scheme.
———
