George Santos met crypto millionaires in the Hamptons and made off with campaign money
(Bloomberg Opinion) — The Long Island town of Southampton has long served as a getaway for New York’s ultra-rich, but in the summer of 2022, it welcomed a crop of newly minted tycoons. George Santos, a condescending candidate for Congress from the other end of the island, was there to greet them.
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Santos, in his early 30s, found common cause with millionaire millennials.
Both had dubious sources of wealth: his from unexplained business dealings and theirs from marketing cryptocurrency to the masses. As they sought to change financial systems and draft crypto-friendly regulations in Washington, Santos hoped to use his new money to get elected to Congress.
Their plots coalesced over a few weeks last summer, when Santos attended at least two fundraisers with high-level crypto executives in the Hamptons, according to donors who attended. But autumn brought a sharp change in luck for both of them.
Although he won his election, Santos is now under scrutiny for fabricating significant parts of his life story. He allegedly fabricated stints at top Wall Street firms, a Jewish heritage, a volleyball championship and the death of his mother on 9/11. Meanwhile, cryptocurrency donors have seen much of their wealth disappear after FTX Trading Ltd., one of the largest exchanges many of them worked for, collapsed just days after Santos was elected.
One event that brought them together was a fundraiser for Michelle Bond, a Republican candidate in Long Island’s 1st Congressional District, at 75 Main, a restaurant so difficult to get into that billionaire businessman John Catsimatidis spent $75,000 last year. just for the privilege of having a permanent reserve.
The other, at a private Southampton residence, was for Adam Laxalt, a Republican candidate for the Nevada Senate, according to an aide who spoke on condition of anonymity because his financial services firm does not want him to speak publicly about political activities.
Both events were attended by Bond’s ubiquitous boyfriend, FTX executive Ryan Salame.
Bond, who returned to Long Island from Virginia to mount a campaign inspired by former President Donald Trump, was well connected to the world of cryptocurrency.
Flush with cash, the crypto industry donated more than $80 million to federal campaigns and committees during 2021 and 2022, outpacing prodigious donor groups like drugmakers and defense contractors.
Long Island was a particularly attractive location for the cryptocurrency pool, due to the proximity to New York City and the opportunity to flip some seats to Republicans, who benefited from a court-ordered redrawing of congressional districts to undo a democrat gerrymander.
Fledgling crypto donors were willing to back newcomers to politics, in contrast to most corporate industries that prefer to give to incumbents who already have a track record and bigger committee positions.
Santos, 34, was one such newcomer, presenting himself as a gay Latino Republican who could read a billion-dollar balance sheet. As did Bond, who touted his connections to the Trump family and his anti-abortion and pro-police stances. He lost his August primary.
FTX founder Sam Bankman-Fried gave mostly to Democrats, saying he wanted to make as much money as possible to address long-term issues like pandemics and the role of artificial intelligence in society. Before FTX collapsed, he said that he, too, would give up $1 billion in the 2024 presidential race.
Earlier this year, he pleaded not guilty to criminal charges, including conspiring to violate campaign finance laws. He faces trial in October.
But at least 11 donors with direct ties to the cryptocurrency industry, including Salame, his parents and former FTX head of regulation Daniel Friedberg, donated to both Bond and Santos.
Salame and her parents, who had not made a federal political contribution this century until 2022, donated the maximum of $5,800 to Santos’s campaign. Tiffany Santos, George’s sister, donated $5,800 to the Bond campaign, which, like Santos’s, was partially self-funded.
Crypto donors accounted for only a small part of Santos’ fundraising. It raised more money from taxpayers like brokers, investors, real estate developers and insurance executives. He did not return a request for comment for this story.
Unlike the crypto money that came from a now-deflated asset bubble, the source of Santos’ newfound wealth remains largely unexplained. In his 2020 campaign, Santos filed a financial disclosure form saying he had no assets. Two years later, he said he was worth as much as $10 million, receiving a salary of $750,000 from a company he founded called the Devolder Organization, after his mother’s maiden name.
Santos then lent more than $700,000 to his congressional campaign.
Santos, who has admitted lying about previous jobs at Goldman Sachs and Citigroup, said his company was a capital introduction service, negotiating business opportunities for investors.
The Department of Justice and the New York Attorney General are currently investigating Santos, and complaints have been filed with the House Office Committee.
Santos is also receiving increased scrutiny from the Federal Election Commission, which enforces campaign finance laws.
Santos’ campaign could have had as many as three campaign treasurers last week, after one abruptly resigned. On Tuesday, Santos’ year-end campaign finance report listed his treasurer, Andrew Olson, who never served as campaign treasurer, FEC records show.
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