Incoming GOP Congressman Fears Democrats Will Downplay FTX Scandal, Calls for ‘Thorough’ Investigation

Republican candidate for New York's 3rd Congressional District George Santos campaigns outside a Stop and Shop store, Saturday, in Glen Cove, N.Y., on Nov. 5, 2022. AP Photo/Mary Altaffer

A newly-elected GOP representative from New York said that he worries that Democrats will try to downplay potential campaign finance and securities law violations by former FTX CEO Sam Bankman-Fried using a lame-duck session of Congress before the new Congress is sworn in.

Republican George Santos, 34, who won New York’s 3^rd Congressional District flipping the seat red, joined his congressional colleagues by calling for a “thorough investigation” when the new GOP Congress takes over next year.

The spectacular collapse of FTX, a crypto-currency exchange that is headquartered in the Bahamas, which filed for bankruptcy on Nov. 11 has left around million customers and other investors facing total losses of billions of dollars. Since then, reports have emerged that Alameda Research, a crypto hedge fund established by Bankman-Fried, was trading billions of dollars from FTX accounts without clients’ knowledge.

Samuel Bankman-Fried, founder and former CEO of FTX, testifies on Capitol Hill in Washington, on Feb. 9, 2022. Saul Loeb/AFP via Getty Images

The House Financial Services Committee said last week it plans to hold a hearing in December to investigate the FTX collapse. It said it expects to hear from companies and individuals involved, including Bankman-Fried, FTX, and Alameda Research.

Committee Chairwoman Maxine Waters (D-Calif.) said in a statement that the United States needs “legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight.”

But Santos is not convinced the Democrat-led committee will take robust action.

“Waters has signaled that she’s not going to investigate Bankman-Fried and FTX as a class. So I’m a little concerned that the Democrats right now as lame-ducks in Congress, will deflect the issue between now and the start of the new Congress," Santos, who is attending leadership meetings for the GOP this week, told The Epoch Times.

“That’s something I’m very interested in investigating,” he added.

Santos, who worked as a financial advisor and has asked for a Financial Services Committee assignment, said that “accountability is mandatory and absolutely necessary.”

“Nobody should get away with this with impunity,” he added.

Santos made news last week when he called some planned investigations by the House GOP, such probes of the COVID-19 origins, Dr. Anthony Fauci’s handling of the pandemic, and Hunter Biden’s foreign business dealings, “hyperpartisan” issues.

When speaking with the Epoch Times, Santos clarified his remarks, saying he was fine with any investigations, but that as a freshman legislator from New York with a background in financial services, he thought he could leave those decisions in the hands of party leadership.

“I’m not opposed to investigating. I don’t think you'll find someone more interested in investigating Hunter Biden and Anthony Fauci, than I am” said Santos.

“But I’ll leave that to the senior members of Congress who know how to do those things better than I do,” he added.

Santos said that for him these weren’t his main issues, because he felt better versed in financial and economic matters. The incoming congressman confirmed that he has asked for assignments in both the financial services committee and foreign affairs committee.

“We don’t have the power to just pass legislation, but we also have the power to hold people accountable,” Santos said of the FTX scandal.

Donations to Democrats

The FTX matter has taken on added urgency given that Bankman-Fried was the second-largest Democratic donor for the 2021–22 election cycle, donating over $38 million to various Democrat-aligned PACs with another $990,000 going to individual members of Congress.

Many of the donations came from foreign addresses in Nassau, capital of the Bahamas, and Hong Kong, according to an analysis by the Epoch Times.

According to data by the Federal Election Commission (FEC), of the 182 donations made by Bankman-Fried this election cycle, two donations came with no address, 16 donations came from a Hong Kong address, 68 came from U.S. addresses and 96 came from two addresses in Nassau, Bahamas.

It’s legal for American citizens to donate to campaigns from foreign accounts, said attorney John Zakhem, whose practice areas includes federal election law.

“If he tells you that he’s a U.S. citizen living in the Bahamas, there’s no prohibition against him making a contribution,” Zakem told The Epoch Times, adding that once a campaign checks that box they only worry about the funds clearing the bank.

There is also no prohibition against Bankman-Fried having donated money to those in Congress who regulate the financial services arena.

The Washington Free Beacon reported this week, citing FEC records, that Bankman-Fried and his colleagues at FTX donated $300,351 to nine members of the House Financial Services Committee, with “[s]ome of the largest contributions [made] to Democrats on the committee’s Digital Assets Working Group, which worked on regulation of the crypto industry.”

An Ethics Issue 

It’s this nexus between Bankman-Fried and the committee members that makes Santos concerned that the Democrats might try to downplay the scandal in the upcoming investigation.

“Democrats tend to not care about ethics when it comes to their campaign,” he alleged.

“I’m surprised that one of the SEC [Securities and Exchange Commisssion] commissioners hasn’t resigned yet. That’s usually how it happens when they start calling around,” said Santos, referring to instances where regulators fall on their swords for politicians in case of failure or malfeasance with those they are supposed to regulate.

Santos said that a Republican Congress will be super-focused on investigations regarding COVID, Hunter Biden, and the management of the pandemic by Fauci at the National Institute of Allergy and Infectious Diseases.

So, he’s worried that the GOP could take their eyes off the FTX investigation.

“But this is something that I’m very interested in,” he said, promising an investigation will get his full attention if he’s assigned to the House Financial Services Committee.

The Epoch Times has reached out to committee chairwoman Waters, ranking member Patrick McHenry (R-N.C.), Bankman-Fields for comment.