NEW: FTX Witness Gave to Hobbs, Admits Straw Donor Scheme

There was blockbuster testimony in the trial of FTX founder Sam Brinkman-Fried today, and it came with profound political implications.

Former Director of Engineering at FTX, Nishad Singh, testified Monday afternoon that he gave signed blank checks to a team led by Sam Brinkman-Fried’s younger brother Gabriel Bankman-Fried, which were used for political contributions. Singh, a childhood friend of the younger Bankman-Fried, has already pleaded guilty, and is testifying for the government. He said he was aware of the fact that he was being used as a straw donor and also that he knew the money for those donations had been stolen from FTX customers. “It was useful for my name to be associated with some donations,” Singh told the jury, “Even if the end recipient understood they were really coming from something else.”

That is a bombshell.

Straw donations are contributions made with funds from someone other than the person whose name is on the check, made with the purpose of evading campaign, finance limits, or disguising the money’s origin, or both. The practice is not just an FEC violation— it can be a crime. Right now in New York City six associates of Mayor Eric Adams are facing prosecution for a straw donor scheme.

I have not seen it previously reported that one of the recipients of funds purportedly from Nishad Singh was Arizona Governor Katie Hobbs. On October 28, 2022, just about two weeks before the collapse of FTX—which has cost its account holders some $10 billion and is one of the largest frauds in American history—Nishad Singh donated $4500 to the Hobbs campaign. In a race that was decided a week later by less than a percentage point—and still has many people who believe it wasn’t fairly decided—a maximum donation from someone who has now admitted to a straw donor scheme, will certainly raise eyebrows.

Corinne Murdock writing in Arizona Free News has chronicled other beneficiaries of FTX funds. Donations from FTX co-CEO Ryan Salame, who is part of the straw donor scheme and has also accepted a plea from the government, donated $2900 each to Republicans Eli Crane, David Schweikart, and Debbie Lesko. Sam Brinkman-Fried donated $11,600 to Ruben Gallego and $10,000 to the Arizona Democratic Party. According to Murdock, Schweikert and Gallego both donated the FTX funds they received, either to charitable organizations or to other candidates whose races Bankman-Fried had tried to influence.

The Arizona Free News also reported last year that Bankman-Fried gave $27 million to a Phoenix based political action committee called Protect our Future. That PAC’s treasurer Dacey Montoya is “a key player in the Democratic dark money network. Montoya served as treasurer for Kelly and Gov. Katie Hobbs’ campaign committees, along with numerous other political committees and PACs across at least 16 other states. Montoya also described herself as a friend of Hobbs.”

Jordan Conradson writing in The Gateway Pundit detailed deeper connections between Montoya and FTX money, and notes that Singh also contributed to the Protect Our Future PAC that Bankman-Fried funded. “The PAC registered with the FEC in January of this year. Bankman-Fried’s millions account for 94 percent of the PAC’s revenue. Another $1 million came from another FTX executive, Nishad Singh, also on February 4.”

What’s new in the Globe’s reporting today is that Nishad Singh donated directly to Hobbs, and according to his testimony today, he was specifically doing so as part of a straw donor scheme that involved blank checks.

At this point, it seems almost impossible that Sam Bankman-Fried’s brother, Gabriel Bankman-Fried, won’t face sanctions. He has now been implicated under oath and in public in the straw donor scheme, so it’s difficult to see how he won’t face at least civil penalties from the FEC for the blank check scheme, and possibly criminal charges for knowingly recruiting straw donors.

This is an American tragedy that keeps getting keeps hitting sad new lows.