Filings reveal Allan Bankman’s involvement with Arabella and its subsidiaries in money laundering and concealing funds
Allan Joseph Bankman and Sam Bankman-Fried (Stanford University/Getty Images).
The father of disgraced cryptocurrency tycoon Sam Bankman-Fried was a member of the advisory board for Arabella Advisors, a prominent dark money organization. A recent federal lawsuit filed against Bankman-Fried’s parents alleges that they had access to Arabella’s funds.
The lawsuit filed by FTX, Bankman-Fried’s now-defunct cryptocurrency exchange, presents communications from Allan Bankman discussing his access to Arabella’s funds. The lawsuit also reveals a special arrangement between FTX and Arabella’s largest affiliate, the New Venture Fund, allowing the crypto trading firm and its donors to contribute to specific charitable causes. Bankman-Fried is accused of embezzling billions of dollars from FTX customer funds to sustain his hedge fund and make political donations.
While the extent of Allan Joseph Bankman’s involvement with Arabella’s advisory board and his control over the organization remains unclear, the lawsuit provides evidence of his discussions about Arabella and its nonprofit arm, the New Venture Fund, as means to move and obscure funds.
Arabella operates a network of five nonprofit funds that are not required to disclose their donors. These funds have spent billions of dollars supporting various left-wing advocacy groups, presenting themselves as grassroots initiatives.
Arabella spokesperson Steve Sampson denied Bankman’s involvement with Arabella Advisors, but the lawsuit cites communications from Allan Bankman discussing the routing of Arabella’s funds through his son.
“We considered having funds made available by Sam through Arabella, through our own 501(c)(3), through a foreign entity with a 501(c)(3)-like charter, and through Alameda as a public benefit corporation,” Bankman allegedly said in relation to gift taxes.
The FTX lawsuit alleges that Allan Joseph Bankman and his wife, Barbara Fried, who are both Stanford Law professors and significant Democratic donors, played a direct role in FTX’s downfall through breaches of fiduciary duties, fraudulent transfers, and unjust enrichment. The lawsuit points to Bankman’s discussions about his son’s partnership with Arabella as evidence of his “unfettered access” to FTX’s finances.
“It’s alarming to learn the extent to which Sam Bankman-Fried and his family are clearly tangled in the Left’s dark money web,” said Caitlin Sutherland, executive director of Americans for Public Trust. “It should raise serious questions and scrutiny about SBF’s Washington pay-to-play scheme and how he tried to use the Arabella apparatus to further his ill-gotten influence.”
FTX donated $8 million to the New Venture Fund on October 8, 2021, according to a July 31 court filing in the ongoing bankruptcy case. A spokesperson for the New Venture Fund confirmed that they briefly worked with the FTX Foundation to provide fiscal sponsorship services for certain grantmaking activities.
“In early 2022, NVF issued grants from a project affiliated with Mr. Bankman and the FTX Foundation, all of which went to carefully vetted charitable organizations addressing environmental challenges and hunger,” the New Venture Fund spokesperson stated. “This is a pending legal matter, and the remaining money will be returned based on resolution of that process.”
The New Venture Fund did not disclose the recipient organizations or the amount of funds yet to be returned.
“The fact that the father of one of the biggest alleged fraudsters in American history sat on the advisory board of a company directing the biggest ‘dark money’ operation in American history is deeply disturbing,” said Scott Walter, president of the Capital Research Center. “Given the Bankman-Fried family’s well-documented history of self-dealing, one can only imagine the sort of corruption Arabella might have been exposed to.”
Arabella claims to only provide administrative support to the New Venture Fund and other nonprofit funds in its network. However, documents obtained by the Free Beacon reveal that Arabella exercises centralized control over the funds, which amassed a combined $3.3 billion in 2020 and 2021, funding numerous Democratic projects nationwide. Each project is managed by a team of Arabella employees, including an account manager and a managing director.
Prior to his downfall in November, Sam Bankman-Fried held significant influence in Democratic circles. He ranked as the second-largest individual political donor in the 2022 election cycle, contributing over $40 million to Democratic candidates and political committees. Bankman-Fried donated $5 million to President Joe Biden’s primary Super PAC, Future Forward, in 2020. Additionally, the disgraced financier gave $300,000 to Democrats on the House Financial Services Committee, the committee overseeing his industry.
In return, Bankman-Fried enjoyed unrestricted access to influential Democrats. He met with Steve Ricchetti, one of President Biden’s top advisers, and other officials during four visits to the White House in 2022, as he aggressively lobbied for cryptocurrency regulation in Washington, D.C. Prior to FTX’s collapse, Bankman-Fried’s competitors accused him of leveraging his government connections to eliminate competition in the market.
What steps should be taken to ensure transparency, accountability, and regulation in the realm of political fundraising, especially in relation to dark money organizations like Arabella Advisors
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The revelation of Allan Bankman’s alleged involvement with Arabella Advisors and its subsidiaries in money laundering and concealing funds has sent shockwaves through the financial and political world. As the father of Sam Bankman-Fried, who is currently facing criminal charges for embezzling billions of dollars, Allan Bankman’s association with Arabella raises serious concerns about the extent of corruption within the organization and its potential impact on the American political landscape.
Arabella Advisors is a well-known dark money organization that operates a network of five nonprofit funds. These funds, which are not obligated to disclose their donors, have been accused of channeling billions of dollars towards various left-wing advocacy groups while presenting themselves as grassroots initiatives. The organization has faced scrutiny for its lack of transparency and potential violations of campaign finance laws.
The lawsuit filed by FTX, Bankman-Fried’s now-defunct cryptocurrency exchange, provides evidence of Allan Bankman’s discussions about Arabella and its nonprofit arm, the New Venture Fund, as a means to move and obscure funds. In these communications, Bankman allegedly discusses various methods, including using his son’s connection to Arabella, to route funds in a way that would potentially evade taxes and scrutiny.
Furthermore, the lawsuit alleges that Allan Bankman and his wife, Barbara Fried, who are both Stanford Law professors and significant Democratic donors, played a direct role in the downfall of FTX through breaches of fiduciary duties, fraudulent transfers, and unjust enrichment. Bankman’s discussions about his son’s partnership with Arabella are presented as evidence of his unrestricted access to FTX’s finances and potential misuse of customer funds.
The revelations about Allan Bankman’s involvement with Arabella raise serious questions about the organization’s integrity and its role in facilitating corruption and illegal activities. The fact that the father of a prominent figure in the alleged fraud sat on the advisory board of a company involved in the largest dark money operation in American history is deeply troubling. It calls into question the legitimacy of Arabella’s activities and poses a threat to the integrity of the American political system.
In response to these revelations, advocacy groups and organizations have called for a thorough investigation into Arabella Advisors and its subsidiaries. The American public deserves transparency and accountability from organizations involved in political fundraising and advocacy. Any illicit activities, including money laundering and concealing funds, must be addressed and appropriate legal action taken.
The lawsuit filed by FTX against Allan Bankman and other parties involved in the alleged fraud presents an opportunity to uncover the truth and hold those responsible accountable. It is crucial that law enforcement agencies and regulatory bodies thoroughly investigate these allegations to safeguard the integrity of the financial and political systems.
The revelations about Arabella Advisors and its alleged involvement in money laundering and concealing funds highlight the urgent need for greater transparency and regulation in the realm of political fundraising. It is imperative that measures be put in place to prevent the abuse of dark money and ensure that organizations like Arabella are held accountable for their actions.
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