RALEIGH, N.C. (WNCN) — A newly elected North Carolina Congresswoman says she gave the money her campaign received from a disgraced cryptocurrency exchange founder to a Triangle nonprofit.
U.S. Rep.-elect Valerie Foushee says a Chapel Hill affordable-housing organization now has the $2,900 given to her in the spring by Sam Bankman-Fried, and Delores Bailey, the nonprofit’s executive director, confirmed to CBS 17 News on Friday that she received the check Nov. 29.
Before the midterm elections, Bankman-Fried donated thousands of dollars to dozens of candidates from both parties across the country, and now they must figure out what to do with that money now that he faces a list of federal financial crimes related to the multibillion dollar collapse of FTX, the crypto exchange he founded.
“They’re not going to come up with their own novel solution here. I think they will follow the pack, if that’s the right word, on Republican and Democratic sides about what to do,” said Mac McCorkle, a professor of the practice at Duke University’s Sanford School of Public Policy and a former consultant to Democratic candidates.
“And since it’s so bipartisan, you’re not seeing either side attack each other very much. I mean, talk about living in a glass house,” he added. “Don’t throw stones here.”
Foushee, a Democratic state senator, is the latest to say she would give away her $2,900 contribution from him — an amount North Carolina State political science professor Steven Greene called “a complete drop in the bucket.
“So for them to just give that back or give that to a charity, it really costs them essentially nothing,” he said. “Just do it. Avoid the negative publicity and be done with it.”
That’s because the overwhelming majority of the spending connected to Bankman-Fried came through Protect Our Future, a hybrid of a PAC and a Super PAC. Those sums were spent to support candidates without actually giving the money to them.
“I think what it underlines to me is how unaccountable campaigning has become, so that big amounts of money are being spent for candidates and it’s not going through the campaign coffers,” McCorkle said.
With a spokesman saying Foushee would champion the prevention of the next pandemic, his PAC dumped more than $1 million into her 4th District primary race against, among others, American Idol finalist Clay Aiken and Durham County Commissioner Nida Allam, according to election tracking website OpenSecrets.
Aiken decried it then, calling the Democrats “the party that opposes dark money, and we’re the party that is swimming in it right now.”
In this case, it came in the form of advertisements either on television or in the mail.
“But they don’t give that money to a candidate — they are forbidden from giving that money to a candidate, from coordinating the spending of that money from a candidate,” Greene said. “It’s just like, ‘Hey, I love this candidate, and I’m going to spend all this money on TV ads saying why you should vote for them.’ So there’s nothing to give back, right?”
It’s why McCorkle calls the current landscape the “wild, wild west.”
“A lot of people are saying, ‘Oh, I’m donating the amount that Bankman-Fried or others contributed.’ That’s understandable. They’re contributing to charity,” McCorkle said.
“You literally can’t return the money” spent by PACs, he said. “I don’t know who you’d return it to. It never went through the campaign coffers.”
Bankman-Fried gave the Foushee campaign $2,900 — the most the Federal Election Commission allows ahead of a single election — on March 31, about seven weeks before the May 17 primary, FEC documents show.
In a statement issued through campaign spokeswoman Anna Nunn, Foushee called the situation “both distressing and unsettling” and said she was “unaware of his illegitimate business dealings” when she accepted the contribution.
Instead, it went to Empowerment Inc., a nonprofit provider of affordable housing.
According to its website, it manages 58 affordable rental properties along with six privately owned homes, and counsels tenants about housing, and offers training for financial literacy and utility fund assistance. Its tenants earn between 30 percent and 60 percent of the area’s median income.
Bailey says Foushee requested that her contribution go toward the P.E.A.C.H. Apartments, a complex that when completed will house 10 families in that income range. The groundbreaking is scheduled for 2023, Bailey said.
“In light of recent developments, I cannot, in good conscience, retain his donation to my campaign,” Foushee said, adding that “I sincerely hope that anyone who may have been wronged in this situation will be made right.”