A crypto mogul’s hidden hand in Vermont’s congressional race stunned observers. It’s a common trick.

Recent financial disclosures make clear that the lion’s share of the outside spending supporting state Sen. Becca Balint's run came from a single million-dollar donation. File photo by Glenn Russell/VTDigger

The revelation this week that a cryptocurrency mogul's million-dollar super PAC donation preceded state Sen. Becca Balint's victory in the Democratic primary for Vermont's open U.S. House seat stunned observers of the closely watched contest. But campaign finance experts say the move is an example of common techniques used to obscure who is influencing federal races.

Seven Days reported Tuesday that the LGBTQ Victory Fund, which spent just shy of $1 million on Balint's behalf in the race, had recently benefited from a $1.1 million donation from Nishad Singh, a top executive at the cryptocurrency exchange FTX. The political action committee's financial disclosures make clear that the lion’s share of the outside spending supporting Balint's run came from Singh's donation.

Bitter debates about outside spending dominated the race in the two months before election day. LGBTQ+ and progressive groups, including the Victory Fund, would ultimately spend $1.6 million backing Balint’s run, and her chief rival, Lt. Gov. Molly Gray, vigorously attempted to make this into a liability by decrying the influence of big money in politics.

And when Gray’s campaign went on the offensive about the outside spending, the Balint campaign shifted attention to who those groups were.

“Molly Gray is very close to saying, you know, ‘We don't want a gay agenda,’” Balint campaign manager Natalie Silver told VTDigger in a late July interview. “She's calling these ‘special interests.’ These aren’t special interests. These are gay people. This is the LGBTQ community. This isn't beet farmers. This isn’t big ag. This isn’t oil. These are people who are afraid for their lives right now.”

It was a talking point that reverberated on the ground — one local LGBTQ+ group almost asked Gray not to march in their parade — and was oft-repeated by the media and pundits alike.

“I made a lot of media appearances in which I acknowledged what I thought was an effective point that the Balint campaign was making — which is that in attacking outside spending, the Gray campaign ran the risk of appearing to attack the goals of the group doing that outside spending,” said Matthew Dickinson, a political science professor at Middlebury College.

Dickinson stressed that he had been careful not to suggest that he agreed with the implicit critique that Gray’s camp was trafficking in homophobia — and that there was no evidence that Balint's camp knew at the time who was behind the outside funds.

But he does think that had it been publicly disclosed before the election, Singh’s donation would have impacted the race’s narrative, if not the outcome. (Balint won in a blowout.)

“Had I known that in fact the money was coming from the cryptocurrency dealer, I probably would have been focused on something else,” Dickinson said. 

The Victory Fund only had $153,000 sitting in the bank going into July. Singh’s donation was the largest one-time sum ever received by the PAC, according to Seven Days. It amounted to 98% of the money the group took in during the month of July.

"We are proud to have earned the support of a diverse group of donors, and we make decisions about which candidates to support independently,” Elliot Imse, a spokesperson for the Victory Fund, wrote in a statement.

Singh has clear connections to another PAC that supported the Balint campaign. In June, the candidate received the endorsement of both Protect Our Future, a super PAC that works to elect candidates committed to pandemic prevention, and Guarding Against Pandemics, a separate PAC. The organizations are run, respectively, by Sam Bankman-Fried, the founder of FTX and an MIT classmate of Singh’s, and Gabe Bankman-Fried — Sam’s brother. Both Sam and Gabe Bankman-Fried individually donated $2,900, the maximum amount, to Balint’s campaign.

Singh and the Sam Bankman-Fried are acolytes of “effective altruism,” a controversial philosophy around charity that has become particularly popular among the titans of Silicon Valley. But while Bankman-Fried has maintained that his political giving is intended to push elected officials to prepare for the next pandemic, many suspect a light-touch approach to cryptocurrency regulation is also what he’s after.

Balint’s team had sought the endorsement of Guarding Against Pandemics. When Gray’s team criticized Balint for also receiving the endorsement of Protecting Our Future, the super PAC, Balint’s team said they had been unaware of the group’s support — and noted that Gray had also met with Guarding Against Pandemics.

In the weeks after those endorsements, Balint would also update her campaign website to include verbatim talking points about pandemic preparedness offered by the group, Seven Days noted. That updated language was included on Balint’s website sometime between June 5 and July 10, according to the Wayback Machine, an internet archive.

‘The people at the table’

In a post-Citizens United world, political action committees can now spend unlimited sums of money on advertising for and against candidates. The only catch is that they can’t coordinate with the campaigns they seek to help.

But such groups are allowed to coordinate among themselves — and they often do. PACs that are lining behind a particular candidate will usually get together at what’s informally called “a table,” said Mike Mikus, a veteran Pennsylvania-based Democratic strategist who has worked on gubernatorial and U.S. Senate campaigns. (He has not worked in Vermont, and was not involved in either Balint or Gray’s campaigns.)

One of the first things that “table” will do is poll the electorate to find out who the most effective messenger would be, he said. Once the results are in, the PACs involved will come up with a division of labor.

“Basically, the people at the table make a decision: ‘OK, we're going to do the TV from this group. We'll do the mail from this group. Radio from this group. Digital from this group. And it's all done to maximize the impact,” he said. 

Indeed, polling was circulating in Vermont as early as June querying voters about whether they would be more or less inclined to vote for a candidate backed by such groups as Equality PAC (another LGBTQ+ group) and the House Progressive Caucus.

For all the talk of “dark money” in this race, the cash behind the outside spending in this contest has all been publicly disclosed with the Federal Election Commission. But the way in which Singh’s $1.1 million was funneled into the race guaranteed that his role would not become known until after the primary.

Under federal rules, political action committees that make large independent expenditures must disclose that spending almost immediately. That’s why it was public throughout the month of July — and heavily covered by the media — that the Victory Fund and other LGBTQ+ and progressive groups had weighed into the race. 

But while such expenditures by political action committees must be reported basically right away, how that money is raised is reported on a different schedule.

Had Bankman-Fried’s PAC, Protect our Future, spent big directly on Balint’s behalf, that fact would have been known virtually right away. But by giving the Victory Fund $1.1 million after June 30, Singh’s cash could be kept under wraps — perfectly legally — until Aug. 20, the monthly filing deadline to report donations received in July.

“A lot of times a donor may have their own super PAC but they don't want to draw attention to themselves before the election,” Mikus said. “So what they do is they find a group that is willing to take their money — whether it's money from the group or from the individual — and they're able to accomplish their goal without getting the blowback.”

Through Silver, her campaign manager, Balint declined to be interviewed but responded to questions submitted in writing. She also criticized VTDigger’s questions.

“The tone and insinuation implies that I have done something wrong, and I have not,” she said.

Balint wrote that she did not know “this person” who had donated to the Victory Fund. And she noted that federal law prohibits her from coordinating with the independent expenditure arm of the Victory Fund, and she wrote multiple times that she had “no control” over their raising and spending. She also vigorously defended the organization.

“The Victory Fund represents the broad LGBTQ community in this country, and it is giving a voice to so many, while it pushes back against a very hostile and homophobic political environment. I support their work,” she wrote.

Asked what policy commitments, in light of the revelation of Singh’s donation, she would like to make to assure Vermonters of her independence, Balint notably made no mention of cryptocurrency. But she did forcefully call for campaign finance reform — something she has done many times before.

“I didn’t want this money to be spent on my behalf. I don’t think it’s healthy for democracy to have this kind of money involved in elections. That’s why I will push hard for campaign finance reform when I, hopefully, win in November and am able to serve in Congress,” she said.

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Lola Duffort

About Lola

Lola Duffort is a political reporter for VTDigger, covering Vermont state government, the congressional delegation and elections. She previously covered education for Digger, the Concord Monitor in New Hampshire and the Rutland Herald. She has also freelanced for the Miami Herald in Florida, where she grew up. She is a graduate of McGill University in Canada.

Email: [email protected]

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