Greetings from San Francisco.

Today, we finally get a look at the campaign-finance violations alleged by the Southern District of New York against Sam Bankman-Fried. It is in many ways what I expected to see—a case centered on Sam’s two fellow mega-donors—with Sam allegedly reimbursing them for all of their political activities.

And if you missed it, on Tuesday we broke the news on more investigations into S.B.F. from the Department of Justice, this one centered in part in Puerto Rico. Catch up on that story here.

Teddy

Ever since S.B.F. was first indicted, after all, political operatives have been anxiously awaiting further details about what prosecutors described as a straw-donor scheme involving money from FTX. Now we have answers. The allegation in the indictment doesn’t concern the fact that S.B.F. and his allies coordinated their political contributions—activity that I have previously reported on, and which is not illegal. Instead, the Southern District of New York describes something far more brazen. According to the new indictment, S.B.F. and his team directed two unidentified FTX executives to make contributions in their own names for political purposes, then repaid them with loans from Alameda Research, the hedge fund that was connected to FTX, using money drawn from customer deposits.

It doesn’t take a genius to deduce that the two unidentified co-conspirators are almost certainly former FTX engineering chief Nishad Singh (called “CC-1”) and former FTX Digital Markets co-C.E.O. Ryan Salame (“CC-2”). Attorneys for Singh and Salame didn’t immediately return requests for comment, and neither have been charged with a crime. But the indictment leaves little to the imagination. CC-1, for instance, is alleged to have cut two checks that line up perfectly with two checks that Singh has publicly disclosed. CC-2 is a reference to an FTX executive who made millions of dollars in contributions to conservatives—which could only be Salame.

CC-1, or Singh, allegedly “expressed discomfort” with making a $1 million contribution to the LGBT Victory Fund in his name, but agreed there was not anyone “trusted at FTX [who was] bi/gay” who was in a better position to donate the money instead. The super PAC ended up spending about $1 million for a Democratic House candidate in Vermont named Becca Balint. There are a bunch of other donations that aren’t mentioned, but would qualify as “giving to a lot of woke shit”—Singh donated $4 million to a ballot-initiative for protecting abortion access in Michigan, for instance. Singh is reportedly likely to strike a plea deal.

There are fewer details about CC-2, presumably Salame, who is alleged in the indictment to have “publicly aligned himself with conservatives [and] made contributions to Republican candidates that were directed by Bankman-Fried and funded by Alameda.” Salame, with his linen shirts and loafers, stood apart from the nerdy, effective-altruist, center-left inner circle of S.B.F. and Singh. But he participated in the political gambits nevertheless, setting up his own super PAC to back Republicans.

As I reported earlier this week, the Department of Justice is also scrutinizing a dark-money group that played a role in Republican primaries called Defending America Together, which gave millions to back Republicans running in Senate primaries. That entity is mentioned as part of a previously unreported probe into Sam Bankman-Fried’s political work before a grand jury impaneled in, of all places, Puerto Rico. Expect more to come on this front.

In fact, according to prosecutors, these were not really loans at all, as there were no “term sheets, and there were no set interest rates, no interest payments, no collateral, and no evidence of repayment.” More remarkably, it appears that Alameda kept notes on the alleged criminal conspiracy: “An internal Alameda spreadsheet noted over $100 million in political contributions, even though FEC records reflect no political contributions by Alameda for the 2022 midterm elections to candidates or PACs.” Even if this was a rhetorical mistake, wherein the spreadsheet misattributed individual donations to the firm itself, it is nevertheless an unforced legal error of epic proportions.

While some people in S.B.F.’s orbit feared that prosecutors were focused on their coordination of political contributions—S.B.F. and his advisers did shepherd some of Singh and Salame’s donations, as I’ve reported before—that isn’t narrowly what appears to be under the microscope. Nor should it be: The advice of the unnamed S.B.F. consultant that Singh donate to “woke shit for transactional purposes,” for example, won’t shock anyone familiar with modern political fundraising. “That’s not the issue,” said one head of a major advocacy group. “The term ‘transactional’ will cost them a lot in legal fees, but also not inherently illegal.” After all, Washingtonians often make donations at the behest of some party leader that they otherwise would not have made—just wait until the Southern District hears about K Street’s lobbying strategy. Coordinated fundraising is not a straw-donor scheme.

As always, of course, the devil is in the details. If Sam really did reimburse executives directly with loans that they never paid back, siphoned from pools of customer deposits, then that’s something else entirely. “The politics for them are not the crime scene,” one S.B.F. political ally texted me after reading the indictment, succinctly, and maybe hopefully, capturing the legal state of play. “It’s the bank fraud.”