Crypto PAC Jumps Into Senate Race, Opposing Katie Porter in California
The biggest name and the biggest spender of crypto money in the 2022 election cycle is now awaiting his prison sentence for fraud and conspiracy. But new super PACs have sprouted up as the successors to the collapsed Sam Bankman-Fried empire, and they are making their first big bet of the 2024 election cycle: trying to crush Representative Katie Porter, a Democrat running in next month’s California Senate primary.
The biggest new crypto-focused super PAC, Fairshake, began reserving television and digital advertising across California in a multimillion-dollar buy late on Monday, and it could be a major player in the race’s final three weeks.
Fairshake revealed two weeks ago in federal filings that it and two affiliated super PACs had amassed a combined roughly $80 million in 2023, with most of the money coming from three major cryptocurrency players: Coinbase, Ripple Labs and Andreessen Horowitz.
The California Senate race pits Ms. Porter against Representative Adam Schiff, a Democrat, and Representative Barbara Lee, another Democrat, as well as Steve Garvey, a Republican and a former baseball player. The top two finishers in the March primary will advance to November, even if both are Democrats.
In a statement, Fairshake accused Ms. Porter of taking campaign cash from other industries and misleading the state about her record, saying, “Katie Porter says one thing and does another.”
The group is planning a blitz of anti-Porter advertising and had begun booking time in markets statewide on Monday. The ad released on Tuesday begins, “Katie Porter plays us for fools,” and accuses her of accepting some donations from industry executives.
It is not exactly clear what about Ms. Porter has drawn the crypto industry’s ire other than her record as a progressive who favored regulating the industry to better favor consumers and made the grilling of a financial chief executive a viral moment a few years ago.
“Californians aren’t fooled: Shadowy crypto billionaires don’t want a strong voice for consumers in the Senate,” Ms. Porter wrote on X after The New York Times reported on the advertising blitz. “They fear people who call out corporate greed, so they’re spending millions on dishonest dark-money ads against me.”
She also quickly sent out fund-raising emails about the “crypto-billionaires” attacking her.
The crypto financiers behind Fairshake and its two affiliated groups, Protect Progress and Defend American Jobs, are fairly open about their agenda: to ensure a favorable set of regulations as the federal government considers how to regulate the crypto industry and to use political spending to get it.
Brian Armstrong, the chief executive of Coinbase, who personally gave $1 million in September, told Axios that same month: “Money moves the needle. For better or worse, that’s how our system works.”
Mr. Armstrong said at the time, “If you look at like the oil and gas lobby or the banking lobby — I mean they’re spending, I don’t know, in the order of $100 million a year.” Interestingly, the statement from Fairshake cited some of those same industries as supporting Ms. Porter.
The new crypto mega group and its affiliates have attracted prominent Democratic and Republican consulting firms.
Fairshake has so far paid money to Impact Research, a polling firm that worked for President Biden in 2020, as well as Jamestown Associates, an ad-making firm that produced commercials for former President Donald J. Trump that same year. Records show the group is employing two other prominent polling firms: Schoen Survey Research, which was founded by Doug Schoen, and Global Strategy Group, which works for a wide range of congressional Democrats.
On Capitol Hill, Ms. Porter has been a close ally of Senator Elizabeth Warren, Democrat of Massachusetts, who was once her professor at Harvard Law School. Ms. Warren has been an outspoken critic of the lax regulations around cryptocurrency, and Ms. Porter once signed onto a letter with Ms. Warren to Texas regulators about crypto, according to the crypto news-tracking site Bitcoin.com.
Mr. Schiff, who has been campaigning to elevate Mr. Garvey over Ms. Porter into the general election, has a statement about the crypto industry on his policy page, writing about the need to nurture such innovative industries. “We need to develop comprehensive regulatory frameworks to ensure that these companies and jobs stay here and grow here,” the page reads.
Fairshake and its affiliated groups have already spent relatively small sums on other races, for candidates including Representative Patrick McHenry of North Carolina, the Republican chairman of the House Financial services Committee, last year before he announced he would retire.
The other biggest spending to date, from the affiliated crypto group Protect Progress, has been to aid Shomari Figures, a Democrat running for the House in Alabama. On the issues page of his website, Mr. Figures plays up the importance of supporting crypto, writing that he would work to “embrace the new landscape around digital assets, like cryptocurrency, to stimulate innovation and technological advancement.”
Mr. Figures has benefited from nearly $750,000 in crypto spending since late January — reminiscent of the huge sums that Mr. Bankman-Fried and others poured into congressional contests in 2022.
Mr. Bankman-Fried’s crypto trading firm, FTX, collapsed in late 2022, and he was arrested and charged with fraud following the multibillion-dollar implosion. He was found guilty in November.
