Joseph Bankman, the father of the infamous former crypto entrepreneur Sam Bankman-Fried, allegedly held a role on the advisory board of a top liberal dark money consulting firm, Arabella Advisors, according to a lawsuit filed Monday.
The Washington, D.C. Arabella Advisors serves as a passthrough organization for wealthy progressives to donate, often anonymously, to left-wing political activists and candidates.
The lawsuit, filed Monday in Delaware against Bankman-Fried’s parents by his former crypto exchange company FTX, accuses the couple of exploiting their “access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.”
According to the lawsuit Bankman-Fried’s father sent him an email in January of 2022, just months before the crypto empire would collapse spectacularly amid accusations of embezzlement and mismanagement, claiming that he should be paid $1 million per year, not $200,000 per year, for his role at the company.
Bankman even threatened his son with the involvement of his mother, Barbara, stating in the email, “Putting Barbara on this.”
The complaint also alleges that Bankman advised Arabella Advisors on charitable contributions made through one of its nonprofit organizations, the New Venture Fund.
Joseph Bankman, a professor of law and business and Stanford Law School, “sat on the advisory board of Arabella Advisors,” the lawsuit claims, using the dark money network’s left-wing philanthropic organization to help FTX navigate tax issues.
The complaint states that Arabella established and managed the New Venture Fund as a platform for FTX and its donors to contribute to select charitable causes.
The New Venture Fund is the largest nonprofit managed by Arabella Advisors, in 2021 paying $329.5 million in grants to primarily liberal causes.
The nonprofit is also being sued by a former employee for racial discrimination, civil rights violations, and wrongful discharge by a former employee, alleging that the overwhelmingly white leadership of the New Venture Fund denied “female employees of color” equal pay and access to benefits.
Arabella has deep ties to left-wing causes and organizations in Maine, raising questions about how much of the already shady funds being funneled into the state are also tainted with money from FTX’s fraudulent activities.
More than $8 billion in customer deposits went missing after FTX collapsed last year.
From 2018 to 2021, the Maine People’s Alliance and its Maine People’s Resource Center received about $6.4 million from Arabella funds.
The Arabella-funded “Maine Momentum received $9.6 million, which it spent mostly to oppose the re-election of Republican U.S. Sen. Susan Collins.
Hansjorg Wyss, the Swiss foreign national who has funded the creation of the left-wing blog Maine Morning Star, has directed over $208 million to the Arabella-controlled Sixteen Thirty Fund, which in 2020 alone dished out over $2 million to left-wing organizations in Maine.
Arabella’s complicated network of funds, nonprofits, and vendors allows deep-pocketed progressives the opportunity to donate substantial sums to political groups while often obscuring their identities, making it difficult to determine who is funding what.
Arabella Advisor’s has denied the lawsuit’s accusations, claiming that Joseph Bankman never had any role at the company.
“Mr. Bankman has never had any role at Arabella Advisors. Arabella Advisors is a vendor to the New Venture Fund, and New Venture Fund has publicly noted…that it briefly worked with the FTX Foundation to provide administrative services for some of its grantmaking,” an Arabella Advisors spokesperson told Fox News.
Lawyers for the parents of the disgraced crypto kingpin also deny the lawsuit’s allegations.
“These claims are completely false. Mr. Ray and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better,” Sean Hecker, counsel for Joseph Bankman and Michael Tremonte, counsel for Barbara Fried said in a joint statement.
“This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins,” the couple’s lawyers said, referencing Bankman-Fried’s upcoming Oct. 3 trial on federal fraud charges.
Former FTX Engineering Director Nishad Singh, one of the FTX “insiders” named in Monday’s lawsuit, gave the Maine Democratic party $100,000 in campaign funds in August of 2022 — $90,000 of which was was allocated to the Maine Democratic State Committee, according to state and federal campaign finance records.
In March of this year, the U.S. Attorney for the Southern District of New York demanded that politicians and political committees that received donations from FTX turn over the illicit funds to U.S. Marshals.
A Maine Democratic Party spokesperson told the Bangor Daily News in December that they have not yet made a decision what to do with the $100,000 from FTX.
Vice Chair Bev Uhlenhake told the Bangor newspaper that the party is in a “holding pattern” until the courts rule on Bankman-Fried’s criminal and bankruptcy cases.
Republican Maine Senator Susan Collins also received a contribution from Bankman-Fried for the 2022 election cycle, and Collins’ office told the WSJ last year that she intended to make a charitable contribution matching the amount of dirty FTX money she received.