PORTLAND, Ore. (KGW)— An Oregon investigation into political contributions made by an executive at disgraced cryptocurrency firm FTX is being referred for potential criminal charges, the Secretary of State’s office announced on Thursday.
The investigation stems from a $500,000 contribution to the Democratic Party of Oregon made in October 2022, just before the midterm election. Though the money came from then-FTX engineering director Nishad Singh, he “incorrectly reported” the funds as coming from a Las Vegas-based crypto company called Prime Trust LLC.
The Oregonian reported earlier this week that Oregon Democrats knew the true source of the funds at the time, a characterization that the Secretary of State’s office pushed back against in its statement on Thursday.
“The investigation did not find clear evidence that the Democratic Party of Oregon knew the true donor when they reported the contribution last year,” the statement reads. “Instead, the investigation determined that the Party could have taken more care with its compliance.”
A final order issued May 11 by the Oregon Elections Division following its investigation suggests that party officials were unsure whether the donation was coming from Singh himself or Prime Trust. While they reached out to Singh to find out, it took several days to hear back. When they did get a response, Singh’s representative said that he “prefers Prime Trust (though not strongly) so go w[ith] that,” according to the final order.
Party officials obliged, disclosing the contribution under Prime Trust LLC.
State election officials agreed to knock down the fine for this violation from $35,000 to $15,000. Despite the lower fee, the Secretary of State’s office said Thursday that the party could pay up to $50,000 if it fails to comply with oversight measures, and the investigation could be reopened if more information comes to light.
Under the settlement between Oregon’s elections division and the Democratic Party of Oregon, the party will have to “publicly share steps to prevent future mistakes” and ensure compliance.
“These oversight requirements will serve the public interest through transparency and future compliance with campaign finance laws – an outcome that could not have been achieved in court,” the Secretary of State’s office said.
The decision to refer the investigation to the Oregon Department of Justice for review stems from admissions Singh made in court following the collapse of crypto exchange FTX and related firm Alameda Research.
“Nishad Singh admitted under oath in the U.S. District Court for the Southern District of New York that he agreed to make political donations in his own name that were funded with money from Sam Bankman-Fried’s companies FTX and Alameda,” said Alma Whalen, Oregon elections manager.
The U.S. Attorney’s office in New York also notified the Oregon Democratic Party that Singh’s $500,000 donation was funded with money “wrongfully taken by Sam Bankman-Fried” from FTX and Alameda.
“After a 7-month investigation, we believe this is sufficient information to justify a referral to the Oregon Department of Justice to consider prosecuting Mr. Singh under state law for making a contribution in a false name,” Whalen said.
A tangled web
The Oregon Secretary of State’s office is currently helmed by Deputy Secretary Cheryl Myers after the toppling of erstwhile Secretary of State Shemia Fagan in a scandal over her moonlighting work for an Oregon-based cannabis company that likewise made major contributions to Democratic politics in the state, including Fagan’s campaign.
In December, Oregon Elections Director Deborah Scroggin resigned after about six months in the position. In her resignation letter, Scroggin cited a challenging atmosphere for election officials due to misinformation. But Willamette Week later reported after speaking with Scroggin that she’d been forced out by Fagan — something Fagan’s office confirmed.
In January, Fagan appointed her senior adviser, Molly Woon, to be director of the elections division. Despite previously working for the Democratic Party of Oregon, Woon did not recuse herself from the investigation into Singh’s donation. She remains elections director in the immediate wake of Fagan’s resignation.
Gov. Tina Kotek said that she wanted to wait until after the May 16 special election to appoint a new secretary of state to replace Fagan. As of Thursday, she’d yet to share an update on the search.
Oregon has the dubious distinction of maintaining some of the loosest campaign finance rules in the country, with no limits on the size of contributions and a history of light penalties for wrongdoing. For many years, the state’s “limitless” status was backed by wording in the Oregon Constitution and subsequent court rulings, but a sea change began in 2020.
During the November 2020 election, voters approved Measure 107, which amended the Oregon Constitution to allow for limits on campaign contributions. That opened the door for lawmakers to pass campaign finance reform bills — something they’ve since repeatedly failed to do.
In the meantime, Oregon races have become more and more expensive each major election.
Hints of FTX-linked influence in Oregon elections first popped up during the 2022 primary, when a relatively unknown candidate, 35-year-old Carrick Flynn, suddenly became the best-funded Democratic candidate for Oregon’s new 6th Congressional District.
A PAC funded by FTX founder Sam Bankman-Fried poured almost $6 million into Flynn’s primary campaign. That helped him emerge as a perceived frontrunner in the race, earning him another $1 million from national Democrats’ House Majority PAC.
Flynn was defeated by then-state Rep. Andrea Salinas in the primary. Salinas went on to win the general election.
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