More outside spending from the crypto industry to boost House Democratic 1st Congressional District candidate Jonathan Jackson reported to the Federal Election Commission brings the total to $1,041,899 as of Tuesday.
There are 17 Democrats in the primary to replace Rep. Bobby Rush, D-Ill., and this torrent of money — for television ads mainly and some direct mail — is coming in the closing days of the June 28 primary.
The story so far:
SUNDAY: The Chicago Sun-Times broke the news that the “Protect Our Future” PAC, bankrolled by crypto billionaire Samuel Bankman-Fried, bought $500,026 in television ads.
MONDAY: The Sun-Times reported that Jackson’s top rivals — Ald. Pat Dowell (3rd), state Sen. Jacqueline Collins, D-Chicago, and business owner Jonathan Swain — deplored the crypto special interest industry spending aimed at electing Jackson. Jackson was blasted by his rivals for not filing his legally required personal financial disclosure statement detailing his income, assets and liabilities.
On Monday, Jackson promised in a statement to file his disclosure Tuesday.
TUESDAY: 1. An FEC filing reveals a new political action committee connected to the crypto currency industry, Web3 Forward, spent $491,250 in media buys to support Jackson.
2. Another new group, called DAO for America, told the FEC it was spending $50,623 in direct mail to support Jackson. The main donor to DAO for America is, according to an FEC filing, something called Shrike Holdings in Miami. Shrike donated $275,000 to DAO for America, the bulk of the $295,000 it raised. Shrike has no website or significant paper trail.
The DAO for America website states, “We mobilize voters in support of candidates who understand the role digital assets can play in leveling the playing field and creating a more equitable society.”
The website contains no information about the people behind this political organization.
3. The Sun-Times has learned that a group called the “Graham Institute for Web3” — a non-profit — asked the leading Democratic candidates running in the 1st to fill out a questionnaire.
The Sun-Times obtained a copy of that questionnaire, which asked a variety of questions about whether the candidate supports various legislation impacting the digital asset industry.
The spending — called “independent expenditures” by the FEC — is supposed to be done with no coordination with the campaign of the candidate they are trying to help.
According to its website, the purpose of Web3 Forward — which backs Democrats — is to provide “blockchain innovators the ability to develop their networks under a clearer regulatory and legal framework” in order for the blockchain economy “to grow to its full potential here in the United States.”
4. Also on Tuesday, Jackson failed to file his financial disclosure.
In an interview with the Sun-Times, Jackson said he was putting the finishing touches on the document and will file it on Wednesday — which will be less than a week until the election. He said he cannot control outside money benefiting his campaign.
In the heavily Democratic 1st District, a primary victory is tantamount to clinching the seat in November.
5. The latest spending for Jackson drew scorching criticism from his leading rivals, basically accusing him of being used as a tool of the crypto industry.
Web3 Forward, DAO for America and “Protect Our Future” political action committee are spending enough money to influence the outcome of the 1st District race at the same time the cryptocurrency industry — facing a crisis as prices have crashed — is increasing its political spending to shape how Congress regulates the digital asset business.
Collins said in a statement, “The news that the crypto industry has doubled down and added another half million dollars in support of Jonathan Jackson is exactly why I’ve campaigned against money in politics and refuse to take corporate donations. My message to Jackson and his crypto backers is that the First Congressional District can’t be bought. Jackson should condemn these special interests trying to manipulate the voters for their own gain in the strongest possible terms.”
Dowell said in a statement, “The 1st District deserves leadership that will prioritize their concerns about guns, economic development and voting rights, not the self interest of the crypto currency industry. The question is will he be an independent representative? There is a reason they went to Jackson — he is inexperienced and malleable and they know I will not be bought and bossed.”
Swain said in a statement, “Democratic primary voters, especially in low turnout elections, are very astute. … a large influx of single issue money a week before the election that’s not connected to issues facing the district won’t do much to move the needle.”
Television ad-buy tracking information shared with the Sun-Times shows a PAC called Forward Progress bought $161,211 worth of time for spotssupporting Karin Norington-Reaves, the former CEO of the Chicago Cook Workforce Partnership.
Norington-Reaves said in a statement, “IEs act independently of campaigns and can do with their funding as they choose. The funding we’re seeing pouring into this race is an unfortunate loophole in the system that allows outside money to significantly influence local politics.”
While Bankman-Fried’s PAC — he donated $23 million of the $24 million it collected — is pushing for more “pandemic preparedness,” the reality that can’t be ignored is Bankman-Fried, who has testified before House and Senate committees, wants to influence crypto policy.
FEC filings reveal that in April, Web3 Forward paid a Chicago firm, Gragert Research, $3,000 and paid AKPD, a Chicago-based political consulting firm, $14,090 for work on other races.
FEC filings also show that one of the major donors to the political action committee — $500,000 — is the GMI PAC, with GMI a major company in the crypto industry.
Bankman-Fried is the founder and CEO of FTX, an international cryptocurrency exchange based in Nassau, Bahamas. The company’s U.S. headquarters is in Chicago’s West Loop.