Elections

Two Metro Phoenix Lawmakers Unload Dubious Crypto Campaign Cash

Two incumbents in the U.S. House, Phoenix Democrat Ruben Gallego (left) and Fountain Hills Republican David Schweikert (right), said they plan to donate the money they received from the now-bankrupt crypto exchange FTX.
Two incumbents in the U.S. House, Phoenix Democrat Ruben Gallego (left) and Fountain Hills Republican David Schweikert (right), said they plan to donate the money they received from the now-bankrupt crypto exchange FTX. Elias Weiss / Gage Skidmore-Creative Commons
Even in this most divisive of times, Democratic and Republican U.S. House members from Arizona can agree on one thing: jettisoning any campaign cash linked to FTX. The Bahamas-based cryptocurrency exchange was once valued at $32 billion before sensationally imploding into bankruptcy.

House Republicans led the push against President Joe Biden’s executive order on crypto, which was a call for federal agencies to develop policies around digital currency, earlier this year. But by November, the two parties united over a common desire to regulate crypto in the U.S. now that FTX founder and former CEO Sam Bankman-Fried faces decades in federal prison on fraud and embezzlement charges.

Campaign finance reports show that U.S. Representatives Ruben Gallego, a Phoenix Democrat, and David Schweikert, a Fountain Hills Republican, received campaign donations from FTX executives.

Bankman-Fried personally donated $5,800 to Gallego, who won his fifth term in District 3 in November. Gallego’s spokesperson, Jacques Petit, confirmed to Phoenix New Times that Gallego turned the money over to Oregon State Representative Andrea Salinas, a fellow child of Mexican immigrants who won a seat in Congress in November. Bankman-Fried funneled millions of dollars into a failed attempt to sink Salinas’ campaign in her district’s Democratic primary.

“I think I’ve paid it back,” Gallego said through a spokesperson.

FTX spent $70 million bankrolling both Democrats and Republicans in the recent midterm election, favoring Democrats about 2-1. Bankman-Fried and his co-CEO, Ryan Salame, sought to woo likely political friends in the crypto sphere.

The Congressional Blockchain Caucus, established in 2016, is chaired by two members of each party, including Schweikert, who won his sixth House term in Arizona’s District 1 in November.

Salame tendered a $2,800 donation to Schweikert, records show. Schweikert told New Times he’s ditching those dollars. Like Gallego, he’s donating the funds.

“My campaign committee will be giving any donation received from FTX or its employees to charitable organizations in my district,” Schweikert said. His district covers much of the northeast metro, including Arcadia, Paradise Valley, north Scottsdale, and Fountain Hills.

Bankman-Fried said on Tuesday that he only has $100,000 to his name. But between February and June this year, he doled out $27 million to fund the fledgling Protect Our Future PAC that supports Democratic candidates, according to campaign finance records.

The PAC is based in Phoenix but didn’t inject any cash into Arizona races this year. The PAC’s treasurer, Phoenix-based Dacey Montoya, is a friend of Democratic Governor-elect Katie Hobbs and has championed her bid publicly since the day she declared to run.

A recent report from the Arizona Secretary of State’s Office shows Hobbs paid more than $114,500 to Montoya’s consulting firm, Money Wheel LLC, which shares an address with the PAC.

This connection led numerous right-wing outlets and prominent conservative Twitter voices, including actor Kevin Sorbo and Republican National Committee member Tyler Bowyer, to pontificate about ties between Hobbs and FTX. The critics hawked the roundly unsubstantiated theory that Hobbs, too, received donations from the failed crypto firm. But Hobbs never received a dime from any FTX executive or the Protect Our Future PAC, according to campaign finance documents.

Hobbs' spokesperson, Joe Wolf, declined to address questions from New Times for this story.
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Elias Weiss is a staff writer at the Phoenix New Times. A native of Charlotte, North Carolina, he reported first for the Northwest Arkansas Democrat-Gazette and was editor of the Chatham Star-Tribune in Southern Virginia, where he covered politics and law. In 2020, the Virginia Press Association awarded him first place in the categories of Government Writing and Breaking News Writing for non-daily newspapers statewide.
Contact: Elias Weiss

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