The Senate Majority PAC, which exists to elect Democrats, announced Tuesday that it would return $3 million donated by former FTX executives Sam Bankman-Fried and Nishad Singh.
Both disgraced entrepreneurs had given $1 million and $2 million to the Senate Majority PAC, which spent $160 million in the most recent midterms, according to the Daily Wire.
As bankruptcy lawyers attempt to claw back funds on behalf of customers and investors, the Democratic National Committee, Democratic Senatorial Campaign Committee, and Democratic Congressional Campaign Committee have issued similar commitments.
A spokeswoman for the Senate Majority PAC said in a statement to CNBC, “Following the serious allegations against FTX, Senate Majority PAC previously set aside the contribution amounts from Sam Bankman-Fried and Nishad Singh with the intention of returning the funds once we receive proper direction from federal law enforcement officials based on their legal proceedings.”
According to data from Open Secrets, Bankman-Fried contributed about $39 million to Democratic candidates during the recent midterm elections, ranking him sixth among individual donors.
John Ray, the bankruptcy attorney who now heads FTX, said in a press release on Monday that the company has been approached by “a number of recipients of contributions or other payments” from Bankman-Fried. All funds not returned voluntarily will be appealed to the United States Bankruptcy Court.
Bankman-Fried and other amateur executives controlled FTX and sister company Alameda Research, both of which filed bankruptcy last month. In the island nation where his companies were headquartered, the entrepreneur was arrested last week by authorities and has agreed to be extradited to the United States.
During a recent hearing held by the U.S. House Committee on Financial Services on investigating FTX’s collapse, current-CEO John Ray testified that the scandal at FTX is “plain old embezzlement.”
The disgracefulness of Bankman-Fried and Singh has come to light as the Senate Majority PAC has been forced to give up millions in tainted donations. While these individuals believed they could purchase their way into politics, what they had actually done was bring harm to countless poor borrowers. It is now apparent that their investments were not philanthropic in nature, but rather acts of embezzlement as the funds taken never made it back to those they intended. This decision effectively nullifies a majority of whatever donation they had attempted to make, leaving little room for political maneuvering having given away immense sums of nonexistent cash.