Political fortunes are always waxing and waning, but few roller-coaster rides have been as dizzying as the rapid ascent and precipitous fall of Sam Bankman-Fried, who went in a matter of weeks from being a billionaire savior clasped to the bosom of the Democratic Party establishment to a bankrupt pariah facing criminal charges. On August 4, 2022, Politico swooned over SBF (as he is commonly known) as the Democratic Party’s newest “megadonor.” Only 30 years old, he had already amassed vast personal wealth—estimated in the neighborhood of $26 billion—as a cofounder of the Bahamas-based cryptocurrency exchange FTX. Starting in 2020, with donations totaling more than $5 million to Joe Biden’s election run, SBF was quickly anointed a donor-class princeling. His stature rose even higher in the 2022 election cycle, when he gave more than $40 million to Democratic campaigns and offshoots. This lavish endowment made SBF second only to George Soros as a party benefactor. Politico breathlessly cited SBF’s promise that in the event of a Biden-Trump rematch in 2024, he would kick in upwards of $1 billion to ensure a Democratic victory.
Yet by November, the promised billion had turned out to be not just speculative but entirely fictive. Just days after the voting ended in the 2022 midterms, FTX filed for bankruptcy. On December 12, SBF was arrested in the Bahamas on charges of fraud and campaign finance violations. In late December, two very close business associates of his—Caroline Ellison, CEO of the FTX-affiliated firm Alameda Research, and Gary Wang, FTX’s cofounder—pleaded guilty to criminal charges.
The ongoing criminal investigation should cause restless nights not only for SBF but for the Democratic Party elites who so recently had welcomed his cash. As Theodore Schleifer of Puck reports, “Paranoia is pervasive among Democrats who crossed paths with S.B.F…. Everyone is now preparing for the worst: door-knocks from investigators, document-retention requests, and potential subpoenas as prosecutors move forward in what could be the white-collar trial of the century.”
Yet even as well-heeled Democrats nervously await further revelations, leftists should welcome this particular plutocrat’s fall into disgrace. Describing SBF as a Democratic Party donor elides the fact that his political donations were spent mainly on squashing the rising left wing of the party.
The SBF story makes sense only if we understand that he was a key player in the Democratic Party counterrevolution that materialized following the unexpectedly strong showing of Bernie Sanders in the 2016 and 2020 primaries, the emergence of an overtly leftist congressional wing spearheaded by the Squad, the concurrent rise of radical social movements like Black Lives Matter and #MeToo, and a new wave of union organizing. This new new left has been met with a cohort of donors and establishment strategists who, since 2018, have systematically targeted left-leaning primary candidates for defeat. This counterrevolution usually expresses itself though dark money spending—and only rarely and disingenuously articulates itself as an ideology. For the sake of clarity, we can label it “reactionary centrism” (to borrow a term popularized by the political analyst Aaron Huertas). Aside from being generically anti-left, reactionary centrists are often agitated by the rising sympathy for Palestinian human rights among young Democrats.
Sam Bankman-Fried can be understood as one of the chief financiers of reactionary centrism.
In early January, the progressive strategist Max Berger posted a deeply researched investigation into the year-end Federal Election Commission filings on his Substack, Party Time. Berger’s inquiry helps clarify the reactionary centrist network. Poring over the filings, Berger “found more evidence SBF was collaborating with AIPAC and Trump-supporting billionaires to stop the growth of the squad and the electoral left.” Further, “SBF wasn’t primarily funding groups that help Democrats defeat Republicans. According to FEC data, over 75% of the money SBF contributed to Democrats in 2022 went to groups that spent nearly all their money on competitive primaries in the Democratic Party.”
Berger contends that the Democratic Party operative Mark Mellman was the likely ringleader of a coordinated effort in Democratic primaries to drown left candidates in a flood of dark money. Funding for this reactionary centrist project came, as Berger documents, not just from SBF but also from right-wing billionaires like “Bernard Marcus (owner of Home Depot), Robert Kraft (owner of the Patriots), and Paul Singer (owner of Elliot Investment Management).” On an institutional level, reactionary centrism expresses itself through organizations like the United Democracy Project, Democratic Majority for Israel, Protect Our Future, Web3 Forward, and Mainstream Democrats. These groups spent a total of more than $70 million to shove the Democratic Party to the right.
Ideologically, the chief proponents of reactionary centrism have been pundits like Matthew Yglesias and even strategists like Sean McElwee (who, because of his close ties to SBF, was fired in December as executive director of the think tank Data for Progress). On his own Substack last May, Yglesias dismissed fears that SBF was trying to buy a Democratic Congress to make the world safe for cryptocurrency. Rather than being driven by the sordid calculus of self-interest, Yglesias argued, Bankman-Fried was a genuine philanthropist motivated by the neo-utilitarian philosophy known as “effective altruism.”
“SBF is for real,” Yglesias wrote. As his first piece of evidence, he hilariously provided this fact: “SBF was raised by a leading consequentialist moral theorist.” But words are not reality. Having a “moral theorist” as a parent doesn’t make you moral, calling yourself a philanthropist doesn’t make you a public benefactor—and aligning with the Democratic Party doesn’t make you liberal. The wonderful thing about the SBF scandal is that it can help the left fight the reactionary centrists, who still pose a major roadblock to progress.