When Sam Bankman-Fried was asked during a podcast earlier this year how much money he might give to political candidates over upcoming election cycles, he offered an eye-popping ballpark number. The 30-year-old crypto titan guessed that, at a minimum, he would put down “north of $100 million,” enough cash to make him one of the country’s most important donors. Pressed by the host on whether he might even spend up to $1 billion, he answered, “Yeah, I think that’s a decent thing to look at,” adding that the number was “a sort of soft ceiling” on his potential largesse.
Even if that $1 billion figure sounded outlandishly unrealistic, the comments still seemed to promise a huge tailwind for largely Democratic candidates. After all, Bankman-Fried, who founded the global crypto exchange FTX and is currently worth about $15 billion according to Bloomberg, was one of Joe Biden’s top financial backers in 2020.
And though he did not pledge to fund Democrats exclusively, he said his top causes included pandemic preparedness and “sane governance,” issues where Republicans notably tend to be weak. (Pandemic preparedness is a major area of focus for the philanthropic movement known as effective altruism, which counts Bankman-Fried as its most important financial backer). Bankman-Fried got off to a hot start giving during primary season, too; his Protect Our Future PAC laid out $40 million, largely in Democratic races, making it one of the party’s biggest individual campaign players.
But now, as the general election nears, Democrats are starting to look like the victims of a political rug pull.
With the party desperately low on cash in a number of House races, Politico reported last week that Bankman-Fried had “turned off the spigot” and was walking back his promises to spend big in the future. “That was a dumb quote on my part,” Bankman-Fried told the publication, regarding his suggestion that he might donate $1 billion. Elsewhere in the interview, he added that at “some point, when you’ve given your message to voters, there’s just not a whole lot more you can do.” For Democratic groups facing a number of tightly contested races that could go either way, it must have felt like a twist of the knife.
Bankman-Fried’s decision to sit on the sidelines as election day approaches is strange. For one thing, it’s antithetical to the things the man says he cares about: After spending largely in intra-Dem contests where both candidates were far more pro pandemic-preparedness than their eventual Republican opponents, he is walking away at the critical moment when politicians who don’t care much about the threat of deadly viruses could win out.
But it’s more than an annoyance for House Democrats, who could have really used Bankman-Fried’s super PAC spending to boost them in the general election, and even put up some of their own campaign money to elevate one of his candidates during primary season, almost certainly as a show of good faith in what appeared to be a promising partnership.
Protect Our Future PAC announced its campaign season in earnest by pouring money into a low-stakes primary in Oregon’s 6th district, backing a candidate with no political experience named Carrick Flynn who had a background in pandemic preparedness and, like Bankman-Fried, is connected to the effective altruism movement. The group spent over $11 million, immediately making the race one of the most expensive in the country.
Nancy’s Pelosi’s House Majority PAC then took the rare step of throwing in $1 million of its own to support Flynn. At the same time, Protect Our Future routed $6 million back to House Majority PAC, so Democrats effectively made $5 million in return for giving Flynn the seal of party approval.
Still, as its name suggests, the House Majority PAC is supposed to help protect the Democrats’ House majority, and it is very uncommon for them to get in on primaries in blue districts. Its involvement in this race was widely seen as a gesture of making-nice with Bankman-Fried and his crypto crew, a group that appeared poised to help bankroll much of the party. Aside from the money, Pelosi was likely heartened, too, by Protect Our Future’s penchant for often, but not always, supporting moderate candidates over more progressive ones.
Flynn, somehow, lost regardless. But not before wounding the eventual Democratic candidate Andrea Salinas, who now is struggling to beat out her Republican opponent Mike Erickson in what should be a safe blue seat but looks, each day, more and more like a GOP pickup. Part of the reason Salinas can’t break away is because Democrats are badly short of money in what has proven to be a challenging fundraising environment.
While many of the party’s individual candidates have been able fundraisers, independent expenditure groups affiliated with congressional Democrats have lagged behind their Republican counterparts.
For example, the Congressional Leadership Fund, the super PAC associated with top House Republican Kevin McCarthy, has raised $220 million this cycle, outpacing Democrats’ House Majority PAC by $86 million. Those super PACs can provide decisive support for candidates, especially if they are in tossup districts or short of funds, often by buying expensive air time in the final weeks before election day.
Leaving aside the money it wasted on primary losers, Protect Our Future’s disappearing act has left Bankman-Fried’s winners in a pinch as well. Some of the candidates he pushed through their primaries, such as Francis Conole in New York and Michelle Vallejo in Texas, are now cash-starved in their contests with Republicans, and have become the responsibility of other Democratic and progressive groups to drag across the finish line.
Meanwhile, Democratic groups are bailing on a number of winnable races because of money shortages. They aren’t airing TV ads in six of the 14 Republican-held districts that went for Biden in 2020, which represent the biggest pickup opportunities for the party’s five-seat House majority. They’ve also cut bait on close contests involving Democratic incumbents in Arizona, Wisconsin, Texas, and Michigan. “The No. 1 factor here is money,” Tim Persico, executive director of the Democratic Congressional Campaign Committee, told Politico.
According to grassroots strategists I’ve spoken with, there was a broad assumption among Democrats that Bankman-Fried would be a savior for House Majority PAC—and repay Pelosi’s favor when it came time to maintain that House majority. Some hoped that the tycoon would be Democrats’ answer, at least on the House side, to Peter Thiel’s Republican kingmaking in the Senate. That hasn’t happened. (Though there has been some drama about it, Thiel is continuing to support one of his struggling candidates in the general election).
Suffice to say there are a number of Republican candidates in close races opposed to pandemic preparedness who could potentially be defeated with some cash infusion. But when asked about their decision to lay low during the general election, Protect Our Future spokesman Mike Levine told me that the group had always “planned to focus on primaries.”
Bankman-Fried’s operation isn’t the only big money entity to have left Democrats in the lurch. Almost every major moderate super PAC that spent lavishly in Democratic primaries in the spring and summer has stopped spending to help Democrats with just weeks to go.
United Democracy Project, the American Israel Public Affairs Committee’s super PAC, spent tens of millions in Democratic primaries, often opposing progressives. Their only foray into general election spending has been two ad buys totaling $200k in a Democrat-on-Democrat race in California, boosting Kevin Mullin and opposing David Canepa.
Democratic Majority for Israel, another multimillion spender closely allied with those Israel lobby groups, has also gone quiet in the general, despite having “Democratic majority” in the name. In response to an email query asking both how much the super PAC has spent and how much it intends to spend on behalf of the 85 general election candidates it endorsed, Communications & Development Manager Jake McClory said, “Yes, DMFI PAC is spending in the general election. We don’t discuss our independent expenditures until after they happen.” But recent FEC filings, covering the period through the end of September, show the group has not spent any money since New York state’s Democratic primary in August. (Update, Oct. 20: After our email exchange, and while this story was in production, Democratic Majority for Israel announced it would purchase digital advertising to aid one House Democrat. On Thursday, McClory told me they anticipated spending “six figures.”)
A third multimillion dollar spender, Mainstream Democrats PAC, also shows no ad buys since primary season ended.
The burden has fallen to progressive groups to pick up the slack. The grassroots organizer Indivisible just launched a new program explicitly aimed towards maintaining the House majority. They’ve pledged resources towards electing a number of candidates that are far from “progressive” by reputation, including New Jersey moderate Tom Malinowski, a Democratic member of the Problem Solvers caucus who routinely opposes progressive priorities. Other progressive groups have similarly thrown in for non-progressive candidates, hoping to keep the narrow House majority intact.
“All these groups who spent huge money in the primaries are declining to show up,” Leah Greenberg, executive director of Indivisible, told me. “Progressives are scraping together all the money and volunteers we can for everyone, to keep the majority.”
Moderate Democrats, especially those in House leadership, have long criticized progressive groups for spending their resources on primaries and not helping the party maintain its majority. In an ironic twist, it is now generously-funded moderate groups that have abandoned the party in its fight to hold a majority, and defend its own, more moderate front-line candidates. It’s worth adding that the party is led by moderates, and those leadership positions have been awarded in part because of those moderates’ perceived ability to bring in money.
Meanwhile, the Democratic National Committee just last month blocked a vote on a proposed dark money ban on primaries, after those aforementioned super PACs helped shatter spending records in this year’s primary season. “This is the problem with allowing billionaires and outside groups to spend infinite money when they’re not invested in the health of the Democratic majority,” added Greenberg when we spoke on the phone. “It’s been an infuriating coda to an infuriating primary season.”