“Prime Trust was identified in the PAC filing solely because the transferred funds were held in an account under Prime Trust’s name for the benefit of a specific customer, and Prime Trust originated the wire transfer at the direction of that customer,” said Erin Holloway, president of global marketing for Prime Trust, in a statement. “This ministerial function is commonplace in both traditional and digital custodial relationships and should not be misconstrued as controlling or otherwise directing the flow of funds.”
So who is actually the source of the funds — and why the obfuscation in the first place? After questions from POLITICO, a spokesperson for Protect Our Future said that Sam Bankman-Fried, 30-year-old founder of the crypto exchange FTX and emergent political megadonor, was responsible for $13 million, while FTX’s engineering director, Nishad Singh, donated the other $1 million.
The Protect Our Future spokesperson said the super PAC would soon file amended disclosures with the FEC to reflect the true source of the donations.
FTX had a different depiction of the events leading to the contribution. After POLITICO sent questions to FTX about the source of the funds — and before Protect Our Future’s comment — a company spokesperson told POLITICO that “Prime Trust’s explanation is correct and that SBF was the customer.”
They declined to answer questions about why that contribution was directed through Prime Trust, which bills itself as a “one-stop shop” custodian for crypto assets and compliance specialist, or if the $14 million included contributions from other FTX executives.
Protect Our Future previously described Bankman-Fried and Singh as among its top donors when the super PAC launched earlier this year.
Federal election law generally requires that donations to political committees disclose who is the original source of funding. But pseudo-anonymous donations to super PACs have been rampant over the last few years, with donations routed through mysterious LLCs frequently popping up in reports, effectively masking the original source of the funds.
The case with Protect Our Future was different: Bankman-Fried had already been publicly identified as a major supporter of the burgeoning super PAC, and Prime Trust is an established company. But the episode shows how malleable campaign finance laws are — and how even significant political spenders can escape disclosure without scrutiny.
Late last week, the FEC signaled it would start cracking down on at least some of the untraceable donations to super PACs, with four commissioners writing in a statement that super PACs “have become a regular part of the campaign finance landscape” and the rules around so-called conduit disclosures are clear — that the original source of the money must be disclosed.
The confusion around Protect Our Future’s funding comes amid growing frustration on the part of Oregon Democrats over the committee’s aggressive independent expenditures on behalf of first-time candidate Carrick Flynn in the state’s new 6th Congressional District.
Flynn’s opponents in the upcoming May 17 primary held a joint press conference last week where they attacked Bankman-Fried for tipping the scales toward Flynn — noting that the FTX founder has aggressively sought to build influence around Washington over the last year.
It also comes as executives from FTX and other crypto firms uncork millions on new super PACs to support candidates across the U.S., a process that’s sometimes led to the creation of offshoots that further obfuscate who’s bankrolling ads, direct mail and canvassing efforts in competitive races.