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The cryptocurrency industry Super PAC Fairshake is now #1 out of all Super PACs by total funds raised.

They've raised more than $175 million to influence upcoming elections in the US, and have more than $100 million of it still waiting to deploy.

#CryptoLobby #Fairshake #USPolitics #cryptocurrency

Despite the relatively small size of the cryptocurrency industry, cryptocurrency-focused super PACs are among the most well-funded this election cycle. All super PACs Name Description Receipts Cash on hand 1 Fairshake supports cryptocurrency interests $177,877,738 $106,996,176 2 Never Back Down Inc. supports Ron DeSantis $145,482,418 $6,956,298 3 SMP supports Senate Democrats $122,904,784 $92,396,317 4 Make America Great Again Inc. supports Donald Trump $109,741,526 $34,459,354 5 Senate Leadership Fund supports Senate Republicans $63,887,538 $59,510,912 6 Democracy PAC George Soros' super PAC, supports Democrats $60,240,533 $38,980,191 7 United Democracy Project ('UDP') AIPAC-backed super PAC, supports Israel $53,274,582 $19,036,330 8 Club for Growth Action supports small-government conservatives $52,047,665 $10,024,220 9 LCV Victory Fund supports environmental issues $26,655,513 $19,078,389 10 Best of America PAC supports Doug Burgum $24,148,569 $183,181 11 Keystone Renewal PAC supports Pennsylvania Republicans $21,468,424 $17,965,490 12 Working for Working Americans - Federal United Brotherhood of Carpenters and Joiners' super PAC $20,083,557 $4,785,234 13 Restoration PAC Dick Uihlen-backed super PAC, supports Republicans $15,783,790 $3,578,225 14 Fight Right Inc supports Ron DeSantis $14,739,207 $335,572 15 Defend American Jobs supports cryptocurrency interests $14,675,000 $97,800

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Last week, Public Citizen’s Rick Claypool and I filed a complaint with the Federal Election Commission based on my research into apparent campaign finance violations by the Coinbase cryptocurrency exchange.

Read the full complaint and my updated article.

Complaint: https://www.citizen.org/article/coinbase-fec-complaint/

Updated article: https://www.citationneeded.news/coinbase-campaign-finance-violation/

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

COMPLAINT
Coinbase, Inc. (“Coinbase”) is a cryptocurrency platform offering exchange, custody, and trading services. On March 20, 2024, Coinbase made a $500,000 contribution to the Congressional Leadership Fund (ID: C00504530), a hybrid PAC. On May 30, 2024, Coinbase made a $24,999,995 contribution to Fairshake (ID: C00835959), a super PAC. At the time of both contributions, Coinbase was negotiating a contract with the United States Marshals Service, a federal agency. In making these contributions of approximately $25.5 million, Coinbase violated federal campaign finance laws that expressly prohibit federal contractors from making contributions to political committees while negotiating or performing federal contracts.
This complaint is filed pursuant to 52 U.S.C. § 30109(a)(1) and is based on information and belief that Coinbase violated the Federal Election Campaign Act of 1971 (“FECA”) prohibition on federal contractor contributions.
If the Federal Election Commission (“FEC” or “Commission”), “upon receiving a complaint . . . has reason to believe that a person has committed, or is about to commit, a violation of [the Federal Election Campaign Act] . . . . [t]he Commission shall make an investigation of such alleged violation . . . .” 52 U.S.C. § 30109(a)(2) (emphasis added).
BACKGROUND
FECA prohibits a federal contractor from making contributions, directly or indirectly, to “any political party, committee, or candidate for public office or to any

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building” if “payment for the performance of such contract or payment for such material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the Congress.” 52 U.S.C. § 30119(a)(1).
The FEC has interpreted the prohibition on contributions to political committees as including contributions to hybrid PACs and independent expenditure-only political committees (“IEOPCs” or “super PACs”), a position they have made clear including in a statement regarding published after the 2011 Carey v. FEC decision.
FECA additionally prohibits any person from knowingly soliciting any such contribution from a federal contractor. 52 U.S.C. § 30119(a)(2).
The prohibition on campaign contributions from federal contractors applies from when a request for proposals is sent out or when negotiations commence (whichever is earlier) until the completion of performance under the contract or the termination of negotiations (whichever is later). 52 U.S.C. § 30119(a)(1); 11 C.F.R.§ 115.1(b)
Coinbase is a federal contractor subject to the FECA prohibition
Coinbase is a federal contractor, holding a current government contract with the United States Marshals Service (USMS), a federal agency within the United States Department of Justice. This contract has a $7 million obligated amount, and a $32.5 million total contract value.
The USMS contract opportunity was first published on March 4, 2024, and offers were due on April 1, 2024.

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CONCLUSION
FECA and FEC regulations prohibit a federal contractor from making a contribution to any political committee during the period in which a federal contract is being negotiated or performed.
According to the definitions of the prohibited time period outlined in FEC regulations, Coinbase was prohibited from making campaign contributions beginning on March 4, 2024. The prohibition will continue until the completion of performance under the contract or the termination of negotiations (whichever is later). As the contract is still ongoing, Coinbase has been prohibited from making any contributions from March 4, 2024 through to the date of this complaint.
Consequently, there is reason to believe Coinbase violated the federal contractor contribution prohibition by making a $500,000 contribution to a hybrid PAC, the Congressional Leadership Fund, and a $24,999,995 contribution to a super PAC, Fairshake, during the period it was negotiating and/or performing its federal contracts.
Furthermore, both the Congressional Leadership Fund and Fairshake are aware of the prohibition on accepting contributions from federal government contractors, and may have violated FECA and FEC regulations if they had reason to believe Coinbase was negotiating a federal contract at the time they solicited and/or accepted the contributions.

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Coinbase Chief Legal Officer Paul Grewal weighed in on my reporting about the company’s apparent campaign finance violations, arguing that Coinbase is not a federal contractor.

I have updated the article to include his comments, and I’ve also noted that this argument does not seem to square with the law.

The article, with these updates, is here: https://citationneeded.news/coinbase-campaign-finance-violation/

More to come soon.

#CitationNeeded #Fairshake #Coinbase #USpolitics #USpol #crypto #cryptocurrency

Tweet thread by Paul Grewal (paulgrewal.eth, @iampaulgrewal):
1/3 Whether intentional or not, this is misinformation. Coinbase is not a federal contractor under the plain language of 11 CFR 115.1. USMS isn’t paying us with appropriated funds—something it made clear in the public RFP.

(Quoted tweet by Molly White sharing the article)

2/3
Screenshot of 11 CFR 115.1:
§ 115.1 Definitions.

(a) A Federal contractor means a person, as defined in 11 CFR 100.10 who—

(1) Enters into any contract with the United States or any department or agency thereof either for—

(i) The rendition of personal services; or

(ii) Furnishing any material, supplies, or equipment; or

(iii) Selling any land or buildings;

(2) If the payment for the performance of the contract or payment for the material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the Congress.

3/3 Screenshotted image: All funds associated with this RFP will be paid out of the Assets Forfeiture Fund.

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Coinbase’s response
A Coinbase spokesperson, reached on July 30, declined to answer questions about which entities were associated with the government contract or the political contribution, or to respond to broader inquiries about the apparent campaign finance violation. They stated only that “Coinbase complies with all applicable laws, including campaign finance law.”

Two days after this article was published, Coinbase’s Chief Legal Officer, Paul Grewal, took to Twitter to argue that the company’s political contributions were not in violation of campaign finance laws. He further condemned this article as “misinformation”, which he insinuated may have been “intentional”.

Grewal asserted that Coinbase is not a federal contractor, and thus is not subject to the prohibition, pointing to a definition of the term within the Code of Federal Regulations as those who are paid “in whole or in part from funds appropriated by the Congress”.14 He also pointed to a Q&A document that was published as an update to the request for proposals (RFP) on April 18, and which contains questions between (unidentified) prospective contractors and answers from the US Marshals Service. One such Q&A entry identifies the Department of Justice’s Assets Forfeiture Fund as the source of the funding for the contract ultimately awarded to Coinbase. “Coinbase is not a federal contractor under the plain language of 11 CFR 115.1. USMS isn’t paying us with appropriated funds—something it made clear in the publ

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(Screenshotted image:) What is the source of the funds used to pay for the Cryptocurrency Management and Disposal Services requested under this RFP? All funds associated with this RFP will be paid out of the Assets Forfeiture Fund. The Fund receives proceeds from the sale of property forfeited to the U.S. Government under the Department of Justice Asset Foreiture Program.

While this Q&A document seems to be what Grewal is drawing upon for his claim that the Marshals Service “made clear in the public RFP” that they would not be “paying [Coinbase] with appropriated funds,” there does not appear to be any statement within the RFP that explicitly addresses whether the funds for the contract are appropriated from Congress or not.

Lawyers at Public Citizen weighed in: “Grewal’s argument that funds in the Assets Forfeiture Fund are not ‘appropriations’ is incorrect. Just this year, the U.S. Supreme Court rejected a similar contention, making clear that an appropriation is simply ‘a law that authorizes expenditures from a specified source of public money for designated purposes’. Consistent with the Court’s holding, a report16 published by the Congressional Research Service explicitly describes the Department of Justice’s Asset Forfeiture Fund as appropriated by Congress.”

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SCOOP: Coinbase appears to have violated campaign finance laws with a $25 million donation to the Fairshake cryptocurrency super PAC, made while they were in active negotiations for a federal government contract.

https://www.citationneeded.news/coinbase-campaign-finance-violation/

#CitationNeeded #Fairshake #Coinbase #USpolitics #USpol #crypto #cryptocurrency

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