Crypto’s present-day version of Bernard "Bernie" Lawrence Madoff, Sam Bankman-Fried (SBF), was arrested in the Bahamas, just hours before he was to appear before Congress to answer questions of allegedly defrauding clients of more than $10 billion.
How convenient.
Although the FTX Ponzi scheme is dwarfed by the estimated $64 billion investors lost to Madoff, 30-year-old Sam and his girlfriend, Caroline Ellison’s criminal enterprise may be exponentially more serious — and dangerous.
SBF was once considered a darling of Wall Street.
CNBC’s Jim Cramer compared SBF to the "JP Morgan of this generation" before the scandal erupted. Jim and the rest have turned on SBF now, racing to get on the politically correct side of the story.
Where was the skepticism?
Where was the scrutiny?
Instead of Securities and Exchange Commission (SEC) scrutiny, SEC Chairman Gary Gensler had a call with Sam to consult on a new, government approved platform, giving FTX what appeared as an edge in the marketplace.
Let's remember — perception is reality.
SEC darling, Bankman-Fried wooed Congress with campaign cash and influence like a tawdry love affair.
The first hearing in the U.S. House Committee on Financial Services was chaired by Rep. Maxine Waters, D-Calif.. She is no stranger to fiscal issues.
The irony of the day came via Re-Tweet by @Rep. Juan Vargas, D-Calif, "Proud to join my @FSCDems colleagues to once again hold bad actors who abuse the financial system accountable . . . "
Perhaps the fiscal irresponsibility of Congress (in greater detail) merits another column.
It looks like the FTX business model and motto was simple.
"Buy Everyone."
SBF and his associates bought the media’s loyalty with generous grants and investments in multitudes of platforms. Left wing politicians and programs received more than $57 million, making him No. 2 in donors.
Climate change? Sam donated.
Pandemic information campaign? Sam donated.
Ukraine relief? Sam donated.
Who was left?
The Republicans.
OpenSecrets.org reports that $22 million went to GOP candidates and political action committees (PACs).
U.S. Senate leader Sen. Mitch McConnell, R-Ky., and House Minority Leader, Rep. Kevin McCarthy, R-Calif., received a combined $5.25 million for their endorsed super PACs from FTX Co-CEO Ryan Salame, who donated $15 million to his own conservative super PAC.
There are still no reports of the large donations being returned, but the news of the scandal must have caused great embarrassment on all sides.
Or . . . did it at all?
Until a couple of days ago, it appeared Sam and his FTX cohorts were getting either light scrutiny or in some cases sympathy.
Sam was still included in The New York Times Deal Book conference where attendees paid $2,500 each to hear Sam dramatize his story.
House Financial Services Committee Chair Rep. Waters lauded young Sam for defending himself as a "as a well-meaning entrepreneur who got in over his head, claiming FTX's collapse had nothing to do with fraud."
Really?
What about those who lost everything in this grand theft?
Perhaps Reps. Waters and Patrick McHenry, R-N.C., did not consider the big picture when they implored Sam to testify at their committee yesterday. Did they not understand Sam’s answers from his $100-plus million Bahamian safe house could hurt both sides of the aisle?
Much to the relief of Capitol Hill — Sam was collared right before C-SPAN cameras could start rolling.
And just in the nick of time — who knows what shadowy connections between FTX, foreign interests, and the DNC may have been highlighted.
Sam now awaits extradition proceedings instead of a House oversight committee appearance.
Rather than a triumphant return, he will be on defense, hiding from the long knives from all the groups he once lavished with millions of his customers’ alleged, hard-earned greenbacks.
Those of us in the bleachers could feel the nervous energy from Washington, D.C.'s swamp as Bahamian police closed in on their man.
Be nervous young Sam; be very nervous.
We all know what happens with multi-millionaires who tango with D.C.’s political cognoscenti.
Jeffrey Epstein and Ghislaine Maxwell trafficked women and influence among political elites — and we know how this turned out.
Epstein clients remain tied up in red tape.
Extortion victims remain under seal.
Epstein’s secrets went to the grave with him. Ghislaine is eerily silent.
Washington’s powerful are extremely proficient at spackling over indiscretions no matter how horrific. Epstein was sentenced to suicide; Maxwell sits in prison — for now.
Sam and friends may have long lists. They might possess evidence of wide-spread corruption from Washington, D.C.'s political elite and insiders.
Who is going to clean this mess up?
Will SBF be getting the full Epstein or the Maxwell treatment?
The FTX scandal speaks to a far larger problem.
Corruption from the highest levels of Washington to Wall Street has reached epidemic levels. Just because something is "legal" doesn’t make it ethical.
Special interests, pay-to-play schemes, secret slush funds, backroom deals, all sound like it’s time to see what the RICO statute has to say.
The current monopoly board in our nation's capital hurts every one of us.
It's time for transparency. Sunlight and accountability are the only remedies here.
And to you professional politicians?
Please return the money.
By close of business today would be good.
(Editor's note: Related stories on Newsmax.com may be found here, and here.)
Brig. Gen. Blaine Holt (retired) is a co-founder of Restore Liberty, a former deputy representative to NATO, a lifetime member on the Council on Foreign Relations, and a Newsmax contributor. The views presented are those of the author and do not represent the views of the U.S. Government, Department of Defense, or its components. Read Holt's reports — More Here.
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