Among The Democratic Party Nobility
/Crypto exchange FTX has now imploded, and it’s turning out to be nothing more than your classic Ponzi scheme — cash in, cash out, and essentially no underlying business. The collapse came after the leader and face of the enterprise, Sam Bankman-Fried (SBF), had made himself the second largest donor to the Democratic Party in the just-ended election cycle. SBF’s donations totaled some $70 million or so, apparently consisting almost entirely of money stolen from unsuspecting clients.
Andrew Stiles, writing at the Washington Free Beacon on November 15, has some fun with the recent revelations in a piece titled “Sam Bankman-Fried Is Not Alone: Some of History’s Greatest Monsters Were Democratic Megadonors.” The sub-head is “Disgraced crypto guru continues a storied tradition.” Stiles compiles a short list of some of the greatest names among the biggest donor/crook/predators in the Democratic Party firmament: Harvey Weinstein, Jeffrey Epstein, Ed Buck, and Bernie Madoff.
I have only one quibble with Stiles: Why stop there? There is a much longer list to be compiled of Democratic mega donors who were also mega crooks. But most of the names on it have been memory-holed by a subservient press with no interest in embarrassing the Democrats.
Of course, Republicans have a record that is far from perfect in this area. Nevertheless, the phenomenon of being a significant white collar criminal and also a major political donor appears to be much more frequently associated with Democrats than Republicans. One likely reason is that large donations to the Democratic Party buy favorable treatment from regulators and the press, which means minimal scrutiny of your business practices and free rein to keep operating (and stealing) right up until you run out of other people’s money. SBF, as lead example, has been treated to fawning coverage from the New York Times, and has essentially been recognized as nobility even right up until today. The New York Post reports just yesterday (almost a full week after the collapse of FTX) that SBF remains scheduled to speak at a “DealBook” conference hosted by the New York Times on November 30. He is to appear on a panel with Treasury Secretary Janet Yellen and Ukrainian President Volodymyr Zelensky. Tickets to the conference, going for $2,499 each, are apparently still available. Try getting on one of those New York Times panels if you are a Republican.
Another likely reason for the predominance of Democrats among these megadonor-crooks is that the core beliefs of the Democratic Party align closely with the operation of Ponzi schemes — particularly the idea that wealth comes from an infinite supply of free money that can be passed out at will by an entitled elite.
Let’s add a few more prominent names of Democratic Party nobility to Stiles’s list:
Elizabeth Holmes. Just today the Theranos founder and CEO was sentenced to 11 years in federal prison following her conviction in a multi-billion dollar scandal for faking information about the company’s blood testing technology. But back in 2016 — when negative information about Theranos was just starting to come out in Wall Street Journal reporting — Holmes was busy raising money for the Hillary Clinton campaign. From Vox, March 14, 2016:
Next Monday, Holmes is hosting a fundraiser for Hillary Clinton’s presidential campaign in Palo Alto. The event includes a conversation with former First Family member Chelsea Clinton, and participants who pay $2,700 get to go to a “host reception” with Chelsea. According to an email sent out to potential attendees, the fundraiser will take place at the Theranos Palo Alto headquarters.
Norman Hsu. In 2007 Hsu pleaded guilty to fraud charges in connection with a Ponzi scheme said by Reuters to have stolen in the range of $60 million. He then was promptly indicted on charges of illegal campaign fundraising on behalf of Hillary Clinton and others, and convicted of that in 2009. From Reuters, May 19, 2009:
Jurors convicted Hsu of violating four counts of federal election law between 2004 and 2007. During the trial, prosecutors said Hsu pressured some of the investors involved in his Ponzi scheme to make thousands of dollars in contributions to political candidates on his behalf. . . . A voicemail recording was played to the jury in which Clinton, then a U.S. senator from New York and now the U.S. secretary of state, praised Hsu for his support.
And then there’s my personal favorite, Hassan Nemazee. Nemazee was the Finance Chair, no less, of Hillary Clinton’s 2008 run for President, up until she dropped out of the primaries in favor of Barack Obama. In 2010 Nemazee pleaded guilty to bilking banks out of some $292 million. From Politico, March 18, 2010:
A major donor to and fund-raiser for the campaigns of President Bill Clinton and Hillary Clinton, Hassan Nemazee, admitted in federal court today to a fraud scheme that bilked banks out of a staggering $292 million. . . . Nemazee was a well-known Hillary Clinton backer who was regularly consulted by journalists, including this one, especially as Clinton prepared to make the difficult decision to drop out of the presidential race in 2008 and endorse Barack Obama.
Nemazee is my personal favorite because I actually represented him in a matter during the 1990s. That matter was a partnership dispute, in which I thought that Nemazee had a pretty good position; but the judge took a strong dislike to him, and was not about to give him anything. At the time, Nemazee was living a lavish lifestyle, but never seemed to have any money when it was time to make a contribution to the partnership.
And there are plenty more where these came from. Here is a Justice Department press release from 2001 listing dozens of large campaign finance convictions from the 1990s, almost all involving Democrats (i.e., the Clintons). The business of having the government attempt to create a perfectly fair and just society by passing out money is inherently corrupt. But it seems that we are incrementally unlearning that lesson, rather than learning it.