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      George Santos Dodges Questions as Democrats Label Him ‘Unfit to Serve’

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      Democratic House leaders stopped short of calling for the resignation of Mr. Santos, a Republican, who may have misrepresented himself in his résumé.Representative-elect George Santos on Monday faced a barrage of questions, as well as an uncertain future, after an article in The New York Times revealed that he may have misrepresented key parts of his résumé on the campaign trail.The Times’s report found that Mr. Santos, a Republican whose victory in Long Island and northeast Queens last month helped his party clinch a narrow majority in the House of Representatives, may have misled voters about his college graduation and his purported career on Wall Street and omitted details about his business from financial disclosures forms.House Republicans and state party leaders were largely silent on Monday. But Joseph G. Cairo Jr., the Nassau County Republican chairman, said in a statement that The Times’s reporting raised “serious” issues that he believed Mr. Santos should address.“Every person deserves an opportunity to ‘clear’ his/her name in the face of accusations,” Mr. Cairo said. “I am committed to this principle, and I look forward to the congressman-elect’s responses to the news reports.”Mr. Santos, 34, has declined numerous requests to be interviewed. On Monday evening, he used Twitter to recirculate a short statement that his lawyer, Joseph Murray, had released on Friday, with one small addition. On Monday, Mr. Murray characterized the Times article as a “shotgun blast of attacks,” but did not provide specific criticisms of what he had called The Times’s “defamatory allegations.”The statement was Mr. Santos’s first public acknowledgment of the questions surrounding his background since Sunday night, when — hours after he had been notified of The Times’s plans to publish its findings — Mr. Santos said on Twitter that he enthusiastically backed Representative Kevin McCarthy of California to be the next House speaker.Mr. McCarthy has been working to quell an effort by hard-right lawmakers to threaten his bid to become speaker when Republicans take control of the House. He has not addressed Mr. Santos’s remarks or The Times’s reporting. A spokesman did not respond to emails and phone calls asking for an interview.A New U.S. Congress Takes ShapeFollowing the 2022 midterm elections, Democrats maintained control of the Senate while Republicans flipped the House.McCarthy’s Fraught Speaker Bid: Representative Kevin McCarthy has so far been unable to quash a mini-revolt on the right that threatens to imperil his effort to secure the top House job.The G.O.P.’s Fringe: Three incoming congressmen attended a gala that drew white nationalists and conspiracy theorists, raising questions about the influence of extremists on the new Republican-led House.Kyrsten Sinema: The Arizona senator said that she would leave the Democratic Party and register as an independent, just days after the Democrats secured an expanded majority in the Senate.A Looming Clash: Congressional leaders have all but abandoned the idea of acting to raise the debt ceiling before Democrats lose control of the House, punting the issue to a new Congress.Representative Eric Swalwell, a Democrat of California, questioned on Twitter whether Mr. McCarthy might “strike a corrupt bargain” with Mr. Santos, suggesting that Mr. McCarthy would refrain from taking action against Mr. Santos in exchange for his vote as House speaker.Representative Hakeem Jeffries of New York, who will be the House Democrats’ leader when the next Congress begins in January, said in a statement that Mr. Santos was “woefully unqualified” and “clearly unfit to serve.”But Mr. Jeffries, whose caucus is days away from falling out of power, stopped short of calling for action on the part of Republican leaders, even as some state Democrats pushed for further investigation.Susan Lerner, the executive director of the government reform group Common Cause, called on Mr. Santos to step down and urged the bipartisan Office of Congressional Ethics and federal prosecutors to investigate.With a razor-thin majority, Republicans have few reasons for challenging or investigating Mr. Santos, and many for defending him. If Mr. Santos were to resign, there is no guarantee that a Republican would win a special election to fill his seat.Mr. Santos, who ran unopposed in his primary this year, was already expected to face a challenging re-election in 2024 in a largely suburban district that, until this year, had recently favored Democrats.Over the course of his campaigns, Mr. Santos claimed to have graduated from Baruch College in 2010 before working at Citigroup and, eventually, Goldman Sachs. But officials at Baruch said they could find no record of his having graduated that year, and representatives from Citigroup and Goldman Sachs could not locate records of his employment.Experts in ethics noted that Mr. Santos’s campaign disclosures revealed little about the source of his fortune, in particular failing to name any client who paid more than $5,000 to his company, the Devolder Organization. Such an omission could be problematic if it were to become clear that he had intentionally avoided disclosing his clientele.Mr. Santos’s candidate disclosures show that he paid himself $750,000 annually, and earned dividends of more than $1 million while running for Congress.There are several avenues by which an ethics investigation could take place within the House of Representatives, but none would be likely to affect Mr. Santos’s ability to assume office in January.Any process would require bipartisan cooperation and would be likely to be lengthy. There is also the question of whether the House would claim jurisdiction over behavior that took place before the subject assumed office, though some recent actions suggest that they might be inclined to take a more expansive approach, if the behavior was campaign-related.Jay Jacobs, the state Democratic Party chair, said that Mr. McCarthy should delay seating Mr. Santos pending an investigation. The state party has been under siege since Democrats underperformed in November, particularly on Long Island, and faced new criticism on Monday over its failure to identify or effectively publicize the inconsistencies in Mr. Santos’s résumé before Election Day.Mr. Jacobs acknowledged that the revelations would have had more impact during the campaign. “The opposition research wasn’t as complete as the Times investigation,” he said, but said that attention would be more appropriately directed at Mr. Santos rather than the party.Several of Mr. Santos’s future constituents said they were shocked and disappointed at the disclosures of his apparent misrepresentations.Andres Thaodopoulos, 36, the owner of a Greek restaurant in the Whitestone neighborhood of Queens, said that he did not vote in November, but that he had welcomed Mr. Santos’s promises to fight crime and cut taxes.“I feel disappointed because the people trust our lives to these leaders,” he said.On Monday night, after Mr. Santos posted his lawyer’s statement, Mr. Swalwell criticized it for insufficiently addressing the questions raised by The Times’s story, including a criminal case for check fraud in Brazil that officials there said remained unresolved.Of the 132 words in the statement, Mr. Swalwell said, “not one addresses the mountain of evidence that you’re a wanted international criminal who lied about graduating college and where you worked.”Others pointed to another seeming inaccuracy. In the last sentence of his statement, Mr. Santos’s lawyer closed with a quote he attributed to Winston Churchill: “You have enemies? Good. It means that you’ve stood up for something, sometime in your life.”According to the fact-checking website PolitiFact, the words probably were not said by Churchill. PolitiFact instead attributed the original sentiment to the French writer Victor Hugo.Nate Schweber More

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      New York Republican George Santos’s Résumé Called Into Question

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      Mr. Santos, a Republican from New York, says he’s the “embodiment of the American dream.” But he seems to have misrepresented a number of his career highlights.George Santos, whose election to Congress on Long Island last month helped Republicans clinch a narrow majority in the House of Representatives, built his candidacy on the notion that he was the “full embodiment of the American dream” and was running to safeguard it for others.His campaign biography amplified his storybook journey: He is the son of Brazilian immigrants, and the first openly gay Republican to win a House seat as a non-incumbent. By his account, he catapulted himself from a New York City public college to become a “seasoned Wall Street financier and investor” with a family-owned real estate portfolio of 13 properties and an animal rescue charity that saved more than 2,500 dogs and cats.But a New York Times review of public documents and court filings from the United States and Brazil, as well as various attempts to verify claims that Mr. Santos, 34, made on the campaign trail, calls into question key parts of the résumé that he sold to voters.Citigroup and Goldman Sachs, the marquee Wall Street firms on Mr. Santos’s campaign biography, told The Times they had no record of his ever working there. Officials at Baruch College, which Mr. Santos has said he graduated from in 2010, could find no record of anyone matching his name and date of birth graduating that year.There was also little evidence that his animal rescue group, Friends of Pets United, was, as Mr. Santos claimed, a tax-exempt organization: The Internal Revenue Service could locate no record of a registered charity with that name.His financial disclosure forms suggest a life of some wealth. He lent his campaign more than $700,000 during the midterm election, has donated thousands of dollars to other candidates in the last two years and reported a $750,000 salary and over $1 million in dividends from his company, the Devolder Organization.Yet the firm, which has no public website or LinkedIn page, is something of a mystery. On a campaign website, Mr. Santos once described Devolder as his “family’s firm” that managed $80 million in assets. On his congressional financial disclosure, he described it as a capital introduction consulting company, a type of boutique firm that serves as a liaison between investment funds and deep-pocketed investors. But Mr. Santos’s disclosures did not reveal any clients, an omission three election law experts said could be problematic if such clients exist.And while Mr. Santos has described a family fortune in real estate, he has not disclosed, nor could The Times find, records of his properties. Mr. Santos’s eight-point victory, in a district in northern Long Island and northeast Queens that previously favored Democrats, was considered a mild upset. He had lost decisively in the same district in 2020 to Tom Suozzi, then the Democratic incumbent, and had seemed to be too wedded to former President Donald J. Trump and his stances to flip his fortunes.His appearance earlier this month at a gala in Manhattan attended by white nationalists and right-wing conspiracy theorists underscored his ties to Mr. Trump’s right-wing base.At the same time, new revelations uncovered by The Times — including the omission of key information on Mr. Santos’s personal financial disclosures, and criminal charges for check fraud in Brazil — have the potential to create ethical and possibly legal challenges once he takes office.Mr. Santos did not respond to repeated requests from The Times that he furnish either documents or a résumé with dates that would help to substantiate the claims he made on the campaign trail. He also declined to be interviewed, and neither his lawyer nor Big Dog Strategies, a Republican-oriented political consulting group that handles crisis management, responded to a detailed list of questions.The lawyer, Joe Murray, said in a short statement that it was “no surprise that Congressman-elect Santos has enemies at The New York Times who are attempting to smear his good name with these defamatory allegations.”A New U.S. Congress Takes ShapeFollowing the 2022 midterm elections, Democrats maintained control of the Senate while Republicans flipped the House.McCarthy’s Fraught Speaker Bid: Representative Kevin McCarthy has so far been unable to quash a mini-revolt on the right that threatens to imperil his effort to secure the top House job.Kyrsten Sinema: The Arizona senator said that she would leave the Democratic Party and register as an independent, just days after the Democrats secured an expanded majority in the Senate.A Looming Clash: Congressional leaders have all but abandoned the idea of acting to raise the debt ceiling before Democrats lose control of the House, punting the issue to a new Congress.First Gen Z Congressman: In the weeks after his election, Representative-elect Maxwell Frost of Florida, a Democrat, has learned just how different his perspective is from that of his older colleagues.A criminal case in BrazilMr. Santos has said he was born in Queens to parents who emigrated from Brazil and was raised in the borough. His father, he has said, is Catholic and has roots in Angola. His mother, Fatima Devolder, was descended from migrants who fled Jewish persecution in Ukraine and World War II strife in Belgium. Mr. Santos has described himself as a nonobservant Jew but has also said he is Catholic.Records show that Mr. Santos’s mother, who died in 2016, lived for a time in the Brazilian city of Niterói, a Rio suburb where she was employed as a nurse. After Mr. Santos obtained a high school equivalency diploma, he apparently also spent some time there.In 2008, when Mr. Santos was 19, he stole the checkbook of a man his mother was caring for, according to Brazilian court records uncovered by The Times. Police and court records show that Mr. Santos used the checkbook to make fraudulent purchases, including a pair of shoes. Two years later, Mr. Santos confessed to the crime and was later charged.The court and local prosecutor in Brazil confirmed the case remains unresolved. Mr. Santos did not respond to an official summons, and a court representative could not find him at his given address, records show.That period in Brazil overlapped with when Mr. Santos said he was attending Baruch College, where he has said he was awarded a bachelor’s degree in economics and finance. But Baruch College said it was unable to find records of Mr. Santos — using multiple variations of his first, middle and last names — having graduated in 2010, as he has claimed.A biography of Mr. Santos on the website of the National Republican Congressional Committee, which is the House Republicans’ campaign arm, also includes a stint at New York University. The claim is not repeated elsewhere, and an N.Y.U. spokesman found no attendance records matching his name and birth date.Mr. Santos, appearing with other Republican elected officials at a post-Election Day news conference, has declined to address questions about his biography.Alejandra Villa Loarca/Newsday, via Getty ImagesAfter he said he graduated from college, Mr. Santos began working at Citigroup, eventually becoming “an associate asset manager” in the company’s real estate division, according to a version of his biography that was on his campaign site as recently as April.A spokeswoman for Citigroup, Danielle Romero-Apsilos, said the company could not confirm Mr. Santos’s employment. She also said she was unfamiliar with Mr. Santos’s self-described job title and noted that Citi had sold off its asset management operations in 2005.A previous campaign biography of Mr. Santos indicates that he left Citi to work at a Turkey-based hospitality technology company, MetGlobal, and other profiles mention a brief role at Goldman Sachs. MetGlobal executives could not be reached for comment. Abbey Collins, a spokeswoman at Goldman Sachs, said she could not locate any record of Mr. Santos’s having worked at the company.Attempts to find co-workers who could confirm his employment were unsuccessful, in part because Mr. Santos has not provided specific dates for his time at these companies.He has also asserted that his professional life had intersected with tragedy: He said in an interview on WNYC that his company, which he did not identify, “lost four employees” at the Pulse nightclub shooting in Orlando in June 2016. But a Times review of news coverage and obituaries found that none of the 49 victims appear to have worked at the various firms named in his biography.After two evictions, a reversal of fortunesAs he was purportedly climbing the corporate ranks, Mr. Santos claimed to have founded Friends of Pets United, which he ran for five years beginning in 2013. As a candidate, he cited the group as proof of a history of philanthropic work.Though remnants of the group and its efforts could be found on Facebook, the I.R.S. was not able to find any record showing that the group held the tax-exempt status that Mr. Santos claimed. Neither the New York nor New Jersey attorney general’s offices could find records of Friends of Pets United having been registered as a charity.Friends of Pets United held at least one fund-raiser with a New Jersey animal rescue group in 2017; the invitation promised drinks, donated raffle items and a live band. Mr. Santos charged $50 for entry, according to an online fund-raising page that promoted the event. But the event’s beneficiary, who asked for anonymity for fear of retribution, said that she never received any of the funds, with Mr. Santos only offering repeated excuses for not forwarding the money.During that same period, Mr. Santos was also facing apparent financial difficulties. In November 2015, a landlord in the Whitestone neighborhood of Queens filed an eviction suit in housing court accusing Mr. Santos of owing $2,250 in unpaid rent.The landlord, Maria Tulumba, said in an interview that Mr. Santos had been a “nice guy” and a “respectful” tenant. But she said that he had financial problems that led to the eviction case, declining to elaborate further. The judge ruled in favor of Ms. Tulumba.In May 2017, Mr. Santos faced another eviction case, from a rent-stabilized apartment in Sunnyside, Queens. Mr. Santos’s landlord accused him of owing more than $10,000 in rent stretching over five months and said in court records that one of his tenant’s checks had bounced. A warrant of eviction was issued, and Mr. Santos was fined $12,208 in a civil judgment.By early 2021, Mr. Santos was becoming vocal on housing issues but not from a tenant perspective. During New York’s pandemic-era eviction moratorium, Mr. Santos said on Twitter that he was a landlord affected by the freeze.“Will we landlords ever be able to take back possession of our property?” he wrote.Mr. Santos said that he and his family had not been paid rent on their 13 properties in nearly a year, adding that he had offered rental assistance to some tenants, but found that some were “flat out taking advantage of the situation.”But Mr. Santos has not listed properties in New York on required financial disclosure forms for either of his campaigns; the only real estate that he mentioned was an apartment in Rio de Janeiro. Property records databases in New York City and Nassau County did not show any documents or deeds associated with him, immediate family members or the Devolder Organization.It is unclear what might have led to Mr. Santos’s apparent reversal in fortunes. By the time he launched his first run for the House, in November 2019, Mr. Santos was working in business development at a company called LinkBridge Investors that says it connects investors with fund managers.Mr. Santos eventually became a vice president there, according to a company document and a May 2020 campaign disclosure form where he declared earnings of $55,000 in salary, commission and bonuses.Mr. Santos, campaigning before Election Day, captured the race for the Third Congressional District, a contest he lost in 2020. Mary Altaffer/Associated PressOver the next two years, Mr. Santos bounced between several ill-fated ventures. As he ran for Congress, he moved from LinkBridge to take on a new role as regional director of Harbor City Capital, a Florida-based investment company.Harbor City, which attracted investors with YouTube videos and guarantees of double-digit returns, soon garnered attention from the S.E.C., which filed a lawsuit accusing the company and its founder of running a $17 million Ponzi scheme. Neither Mr. Santos nor other colleagues were named in the lawsuit, and Mr. Santos has publicly denied having any knowledge of the scheme.Two weeks later, a handful of former Harbor City executives formed a company called Red Strategies USA, as reported by The Daily Beast. Corporate filings listed the Devolder Organization as a partial owner — even though the papers to register Devolder would not be filed for another week.Red Strategies was short lived: Federal campaign records show it did political consulting work for at least one politician — Tina Forte, a Republican who unsuccessfully challenged Representative Alexandria Ocasio-Cortez in November — before it was dissolved in September for failing to file an annual report.The Devolder Organization seems to have flourished as Mr. Santos ran for office. According to Mr. Santos’s disclosures, his work there earned him a salary of $750,000. By the time it too was dissolved — also for failing to file an annual report — Mr. Santos reported that it was worth more than a million dollars.A November win raises new questionsMr. Santos announced his intent to make a second run at Congress almost immediately after the end of his first. He figured to again be an underdog in the district, which largely favored President Biden in 2020.But things began to swing in his favor. Republicans in Nassau performed well in local elections in 2021. Mr. Suozzi opted to not run for re-election in 2022, instead launching an unsuccessful bid for governor. And with high turnout expected in a midterm election that also featured a governor’s race, Mr. Santos’s race became more competitive — and his campaign stance became more tempered.During his first campaign, Mr. Santos, an adherent of Mr. Trump, opposed mask mandates and abortion access, and defended law enforcement against what he called the “made-up concept” of police brutality.But during his second campaign, older posts on Twitter were suddenly deleted, including his claims of election fraud that he said cost Mr. Trump the election in 2020. In March 2021, he resurfaced the claim, writing on Twitter in a since-deleted post, “My new campaign team has 4 former loyal Trump staffers that pushed him over the finish line TWICE, yes I said TWICE!”Mr. Santos also briefly claimed without evidence in another since-deleted tweet that he had been a victim of fraud in his first congressional race, at one point using the hashtag #StopTheSteal, a reference to a slogan associated with Mr. Trump’s false election claims.And while he previously boasted that he attended the Jan. 6 rally (but, he has said, not the riot) in support of Mr. Trump in Washington, he has since ducked questions about his attendance and a prior claim that he had written “a nice check for a law firm” to assist some rioters with their legal bills.Mr. Santos’s improved circumstances are evident on the official financial disclosure form he filed in September with the House of Representatives, though the document still leaves questions about his finances.In the disclosure, Mr. Santos said that he was the Devolder Organization’s sole owner and managing member. He reported that the company, which is based in New York but was registered in Florida, paid him a $750,000 salary. He also earned dividends from Devolder totaling somewhere between $1 million and $5 million — even though Devolder’s estimated value was listed in the same range.The Devolder Organization has no public-facing assets or other property that The Times could locate. Mr. Santos’s disclosure form did not provide information about clients that would have contributed to such a haul — a seeming violation of the requirement to disclose any compensation in excess of $5,000 from a single source.Kedric Payne, the vice president of the watchdog Campaign Legal Center, and a former deputy chief counsel for the Office of Congressional Ethics, was one of three election law experts consulted by The Times who took issue with the lack of detail.“This report raises red flags because no clients are reported for a multimillion-dollar client services company,” Mr. Payne said, adding: “The congressman-elect should explain what’s going on.”The Times attempted to interview Mr. Santos at the address where he is registered to vote and that was associated with a campaign donation he made in October, but a person at that address said on Sunday that she was not familiar with him.Material omissions or misrepresentations on personal financial disclosures are considered a federal crime under the False Statements Act, which carries a maximum penalty of $250,000 and five years in prison. But the bar for these cases is high, given that the statute requires violations to be “knowing and willful.”The House of Representatives has several internal mechanisms for investigating ethics violations, issuing civil or administrative penalties when it does. Those bodies tend to act largely in egregious cases, particularly if the behavior took place before the member was inaugurated.Campaign disclosures show that Mr. Santos lived large as a candidate, buying shirts for his staff from Brooks Brothers and charging the campaign for meals at the restaurant inside Bergdorf Goodman.Mr. Santos also spent a considerable amount of money traveling — charging his campaign roughly $40,000 in flights to places that included California, Texas and Florida. All told, Mr. Santos spent more than $17,000 in Florida, mostly on restaurants and hotels, including at least one evening at the Breakers, a five-star hotel and resort in Palm Beach, three miles up the road from Mar-a-Lago, Mr. Trump’s private club and residence.Manuela Andreoni More

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      Sam Bankman-Fried and Allies’ Political Donations Under Scrutiny by US

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      Federal prosecutors appear to be focusing on possible wrongdoing by cryptocurrency executives, rather than by Democratic or Republican politicians. But the inquiries widen an explosive campaign finance scandal.WASHINGTON — Federal prosecutors in Manhattan are seeking information from Democrats and Republicans about donations from the disgraced cryptocurrency entrepreneur Sam Bankman-Fried and two former executives at the companies he co-founded.In the days after Mr. Bankman-Fried was arrested on Monday and charged with violations including a major campaign finance scheme, the prosecutors reached out to representatives for campaigns and committees that had received millions of dollars from Mr. Bankman-Fried, his colleagues and their companies.A law firm representing some of the most important Democratic political organizations — including the party’s official campaign arms, its biggest super PACs and the campaigns of high-profile politicians such as Representative Hakeem Jeffries — received an email from a prosecutor in the United States attorney’s office for the Southern District of New York. The email sought information about donations from Mr. Bankman-Fried, his colleagues and companies, according to people familiar with the request, who insisted on anonymity to discuss an ongoing law enforcement matter.The prosecutors have reached out to representatives of other Democratic campaigns that received money linked to the cryptocurrency exchange FTX, which Mr. Bankman-Fried co-founded, according to two other people familiar with the matter. Prosecutors are also investigating donations to Republican campaigns and committees by another FTX executive who was a top financier on the right, according to a person familiar with the situation.So far, Mr. Bankman-Fried is the only executive to face charges. Since emerging as a leading political megadonor in the months before the 2020 election, he has donated nearly $45 million, primarily to Democratic campaigns and committees that are now scrambling to distance themselves.There has not been any suggestion that political campaigns and groups engaged in wrongdoing related to the donations they received. The Justice Department’s inquiries appear to be an effort to gather evidence against Mr. Bankman-Fried and other former FTX executives, rather than against their political beneficiaries.But the prosecutors’ requests widen what has quickly become one of the biggest campaign finance scandals in years, as both Democrats and Republicans grapple with questions about their eagerness to tap into a stream of cash from a murky and largely unregulated industry that emerged suddenly as a powerful political player.The fallout has been swift and is only growing, as lawmakers, operatives for political action committees and their lawyers try to minimize the damage.Some politicians — including Mr. Jeffries, the incoming Democratic leader in the House, and Representative-elect Aaron Bean, a Republican from Florida — either returned donations linked to FTX or gave the money to charity after the company became embroiled in scandal. Other groups say they are setting the cash aside for possible restitution to victims of the alleged scheme.Prosecutors said FTX was a “house of cards” through which Mr. Bankman-Fried and others diverted customer money to buy expensive real estate in the Bahamas, invest in other cryptocurrency firms, provide themselves with personal loans and make political contributions of tens of millions of dollars intended to influence policy decisions on cryptocurrency and other issues.What to Know About the Collapse of FTXCard 1 of 5What is FTX? More

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      Restaurateur, Political Donor, Tipster: The Many Roles of FTX’s Ryan Salame

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      The co-chief executive of an FTX unit who told regulators about wrongdoing at the exchange was a big Republican donor. He also bought restaurants.In Western Massachusetts, Ryan Salame was known as a local boy turned hometown hero who struck gold as a top executive at FTX, the now-collapsed cryptocurrency exchange, and used some of that wealth to buy a few small restaurants in the area.In Washington, D.C., Mr. Salame was hailed as a “budding Republican megadonor,” bankrolling candidates and political action committees, and establishing FTX’s presence as a crypto heavyweight invested in shaping the regulation of the nascent industry.Now, Mr. Salame has emerged as a central player in the scandal surrounding FTX after he told regulators in the Bahamas, where the exchange was based, that FTX was misappropriating billions in customer funds to prop up an allied crypto trading firm called Alameda Research.On Monday, Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas, accused of lying to investors, lenders and customers about the close financial dealings between FTX and Alameda, and committing fraud by using both companies as a “piggy bank.” Prosecutors said Mr. Bankman-Fried used customer funds to trade, buy expensive real estate, invest in other crypto firms, make political contributions and extend personal loans to executives.So far, Mr. Bankman-Fried, who is being held without bail in a Bahamas prison, is the only FTX executive charged with wrongdoing. But Damian Williams, the U.S. attorney for the Southern District of New York in Manhattan, said the investigation is continuing and prosecutors are not done charging individuals.Mr. Salame’s activities may be scrutinized, given that he was pivotal to FTX’s political influence operation along with Mr. Bankman-Fried. Mr. Salame, a former co-chief executive of FTX Digital Markets, the company’s subsidiary in the Bahamas, also received a $55 million personal loan from Alameda.Mr. Salame (pronounced Salem) did not return multiple requests for comment. His lawyer, Jason Linder at Mayer Brown, also did not return requests for comment.Born in Sandisfield, Mass., a town of just 1,000 people in the Berkshires, Mr. Salame worked briefly at the accounting giant EY. In 2019, he graduated from Georgetown University with a master’s in finance before landing a job at Alameda in Hong Kong. He later moved to FTX in the Bahamas, where he was a primary point of contact between the exchange and the local government.Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, was arrested in the Bahamas on Monday.Mario Duncanson/Agence France-Presse — Getty ImagesMr. Salame was not in Mr. Bankman-Fried’s inner circle, but he was fiercely loyal to him, according to people familiar with the matter. Mr. Bankman-Fried and his closest advisers all shared a purported commitment to giving away most of the money they made under the banner of “effective altruism.”By contrast, Mr. Salame said at times that he was in crypto because it was a way to get rich, according to a person who knows him. He enjoyed expensive cars, flew on private jets and had a reputation for hard partying.What to Know About the Collapse of FTXCard 1 of 5What is FTX? More

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      Two Groups Quietly Spent $32 Million Rallying Voters Behind Voting Rights

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      The money largely went to state and local organizations that often focused on turning out young voters and people of color, including with messages about threats to freedom and democracy.Two organizations quietly spent $32 million in last month’s midterm elections on organizing meant to combat election denialism and promote voting access, according to a progressive strategist behind the effort.The Pro-Democracy Center and the Pro-Democracy Campaign put that money into 126 organizations across 16 states, with a particular focus on Arizona, Wisconsin and Michigan, as well as toward a range of national organizations, some of them left-leaning. The effort also connected donors with key organizations, resulting in an additional $16 million investment, said David Donnelly, the initiative’s lead strategist. The Pro-Democracy Center and the Pro-Democracy Campaign did not directly spend on specific candidates or buy advertising, he said. The initiative did, however, engage around retention of Supreme Court justices in Arizona, he said.Mr. Donnelly said the groups invested in organizations that focused in particular on turning out young voters and people of color, two key parts of the Democratic coalition, and often recommended messages about threats to freedom and democracy.“If you roll back the clock to the beginning of this year, there was a lot of ink and pixels spilled about the possibility of democratic collapse, and all that didn’t happen,” Mr. Donnelly said. A number of Republicans who made names for themselves as election deniers lost high-profile races. “It’s not the full story, but you can’t understand why without lifting up some of the groups that were doing organizing and mobilizing in communities of color and among young people.”Mr. Donnelly would not name the donors behind the groups, which as nonprofits are not required to disclose their contributors. Politico first reported on the efforts from Pro-Democracy Center and Pro-Democracy Campaign on Monday.The Aftermath of the 2022 Midterm ElectionsCard 1 of 6A moment of reflection. More

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      A Times Square Hotel Was Set To Become Affordable Housing. Then the Union Stepped In.

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      At the height of the Covid-19 pandemic, the Paramount Hotel, sitting empty in Times Square, was on the verge of turning into a residential building, offering a rare opportunity to create affordable housing in Midtown Manhattan.A nonprofit was planning to convert the hotel into apartments for people facing homelessness. But after 18 months of negotiations, the plan collapsed this year when a powerful political player intervened: the Hotel and Gaming Trades Council, the union representing about 35,000 hotel and casino workers in New York and New Jersey.The union blocked the conversion, which threatened the jobs of the workers waiting to return to the 597-room hotel. Under the union’s contract, the deal could not proceed without its consent.The Paramount reopened as a hotel this fall, an illustration of how the union has wielded its outsized political power to steer economic development projects at a critical juncture in New York City’s recovery.The pandemic presented a devastating crisis for the city’s hotel workers, more than 90 percent of whom were laid off. But as the union has fought harder to protect them, its political muscle has also drawn the ire of hotel operators and housing advocates, who say the group’s interests can be at odds with broader economic goals.After the conversion failed, the Paramount reopened this fall, saving about 160 hotel jobs.Ahmed Gaber for The New York TimesThe union’s impact ripples throughout New York. It can block or facilitate the conversion of large hotels into housing and homeless shelters, a consequential role in a year when homelessness in the city reached a record high of about 64,000 people. The union pushed for the accelerated expansion of casinos, which could transform the neighborhoods of the winning bids. And it was a driving force behind a new hotel regulation that some officials warned could cost the city billions in tax revenue.The union’s influence stems from its loyal membership and its deep pockets, both of which it puts to strategic use in local elections. Its political strength has resulted in more leverage over hotel owners, leading to stronger contracts and higher wages for workers.In this year’s New York governor’s race, the union was the first major labor group to endorse Gov. Kathy Hochul, whose winning campaign received about $440,000 from groups tied to the union. The group was also an early backer of Eric Adams, whose mayoral campaign was managed by the union’s former political director.“H.T.C. is playing chess while everyone else is playing checkers,” said Chris Coffey, a Democratic political strategist, referring to the union’s more common name, the Hotel Trades Council. “They’re just operating on a higher playing field.”Origins of the union’s powerHistorically, the Hotel Trades Council avoided politics until its former president, Peter Ward, started a political operation around 2008.Mr. Ward and the union’s first political director, Neal Kwatra, built a database with information about where members lived and worshiped and the languages they spoke. This allowed the union to quickly deploy Spanish speakers, for instance, to canvass in Latino neighborhoods during campaigns.Candidates noticed when the Hotel Trades Council, a relatively small union, would send 100 members to a campaign event while larger unions would send only a handful, Mr. Kwatra said.The Aftermath of New York’s Midterms ElectionsWho’s at Fault?: As New York Democrats sought to spread blame for their dismal performance in the elections, a fair share was directed toward Mayor Eric Adams of New York City.Hochul’s New Challenges: Gov. Kathy Hochul managed to repel late momentum by Representative Lee Zeldin. Now she must govern over a fractured New York electorate.How Maloney Lost: Democrats won tough races across the country. But Sean Patrick Maloney, a party leader and a five-term congressman, lost his Hudson Valley seat. What happened?A Weak Link: If Democrats lose the House, they may have New York to blame. Republicans flipped four seats in the state, the most of any state in the country.To recruit members into political activism, the union hosted seminars explaining why success in local elections would lead to better job protections. Afterward, members voted to increase their dues to support the union’s political fights, building a robust fund for campaign contributions. Rich Maroko, the president of the Hotel Trades Council, said the union’s “first, second and third priority is our members.”Ahmed Gaber for The New York TimesThe Hotel Trades Council ranked among the top independent spenders in the election cycle of 2017, when all 26 City Council candidates endorsed by the union won. Some of these officials ended up on powerful land use and zoning committees, giving the union influence over important building decisions in New York.In a huge victory before the pandemic, the union fought the expansion of Airbnb in New York, successfully pressuring local officials to curb short-term rentals, which the union saw as a threat to hotel jobs.Mr. Ward stepped down in August 2020, making way for the union’s current president and longtime general counsel, Rich Maroko, who earned about $394,000 last year in total salary, according to federal filings.The union’s sway has continued to grow. Some hotel owners, speaking on the condition of anonymity, say they are fearful of crossing the union, which has a $22 million fund that can compensate workers during strikes. In an interview, Mr. Maroko pointed out that the hotel industry is particularly vulnerable to boycotts.“The customer has to walk through that picket line,” he said, “and then they have to try to get a good night’s rest while there are people chanting in front of the building.”The Hotel Trades Council’s contract is the strongest for hotel workers nationwide, labor experts say. In New York City, where the minimum wage is $15 an hour, housekeepers in the union earn about $37 an hour. Union members pay almost nothing for health care and can get up to 45 paid days off.During the pandemic, the union negotiated health care benefits for laid-off workers, suspended their union dues and offered $1,000 payments to the landlords of workers facing eviction.Along the way, the union has become known for its take-no-prisoners approach to politics, willing to ally with progressives or conservatives, with developers or nonprofits — as long as they support the union’s goals.“There may be no union which has more discrete asks of city government on behalf of its members,” said Mark Levine, the Manhattan borough president, who was endorsed by the union. “You can’t placate them with nice rhetoric. To be a partner with them, you really need to produce.”Political wins during the pandemicLast year, the union scored a victory it had sought for more than a decade, successfully lobbying city officials to require a special permit for any new hotel in New York City.The new regulation allows community members, including the union, to have a bigger say over which hotels get built. The move is expected to restrict the construction of new hotels, which are often nonunion and long viewed by the Hotel Trades Council as the biggest threat to its bargaining power.Budget officials warned that the regulation could cost the city billions in future tax revenue, and some developers and city planners criticized the rule as a political payback from Mayor Bill de Blasio in the waning months of his administration after the union endorsed his short-lived presidential campaign in 2019. Mr. de Blasio, who did not return a request for comment, has previously denied that the union influenced his position.In the next mayoral race, the union made a big early bet on Mr. Adams, spending more than $1 million from its super PAC to boost his campaign. Jason Ortiz, a consultant for the union, helped to manage a separate super PAC to support Mr. Adams that spent $6.9 million.Mr. Ortiz is now a lobbyist for the super PAC’s biggest contributor, Steven Cohen, the New York Mets owner who is expected to bid for a casino in Queens.The union, which shares many of the same lobbyists and consultants with gambling companies, will play an important role in the upcoming application process for casino licenses in the New York City area. State law requires that casinos enter “labor peace” agreements, effectively ensuring that new casino workers will be part of the union.A new threatDuring the pandemic, as tourism stalled, there was growing pressure to repurpose vacant hotels. With New York rents soaring, advocates pointed to hotel conversions as a relatively fast and inexpensive way to house low-income residents.But the union’s contract, which covers about 70 percent of hotels citywide, presented an obstacle. A hotel that is sold or repurposed must maintain the contract and keep its workers — or offer a severance package that often exceeds tens of millions of dollars, a steep cost that only for-profit developers can typically afford.A plan to convert a Best Western hotel in Chinatown into a homeless drop-in center was scuttled by city officials after the effort failed to win the union’s endorsement.Ahmed Gaber for The New York TimesEarlier this year, Housing Works, a social services nonprofit, planned to convert a vacant Best Western hotel in Chinatown into a homeless drop-in center. There was opposition from Chinatown residents, but city officials signed off on the deal. It was set to open in May.Right before then, however, the Hotel Trades Council learned of the plan and argued that it violated the union’s contract.Soon, the same city officials withdrew their support, said Charles King, the chief executive of Housing Works. He said they told him that Mr. Adams would not approve it without the union’s endorsement. Mr. King was stunned.“Clearly they have the mayor’s ear,” Mr. King said, “and he gave them the power to veto.”A spokesman for the mayor said the city “decided to re-evaluate this shelter capacity to an area with fewer services,” declining to comment on whether the union influenced the decision.The Chinatown hotel remains empty.An obstacle to affordable housingIn the spring of 2021, state legislators rallied behind a bill that would incentivize nonprofit groups to buy distressed hotels and convert them into affordable housing. They sought the Hotel Trades Council’s input early, recognizing that the group had the clout to push then-Gov. Andrew M. Cuomo to oppose the bill, according to people involved in the discussions.The union supported the conversions, but only if they targeted nonunion hotels outside Manhattan. Housing groups have said that, unlike large Midtown hotels, nonunion hotels are not ideal candidates for housing because they tend to be much smaller and inaccessible to public transit.As a compromise to gain the union’s support, the bill allowed the Hotel Trades Council to veto any conversions of union hotels.“While we certainly support the vision of finding shelters and supportive housing for the people that need it,” Mr. Maroko said, “our first, second and third priority is our members.”One housing advocate involved in the legislation, who spoke on the condition of anonymity, said she warned elected officials that the veto provision would diminish the law’s effectiveness.The law, which passed last year, came with $200 million for conversions. Housing experts criticized the legislation for not sufficiently loosening zoning restrictions, prompting another law this spring that made conversions easier.Still, no hotels have been converted under the new law.Now, with tourism rebounding, housing nonprofits say the window of opportunity has largely passed.“It’s not like hotel owners are clamoring to sell the way they were two years ago,” said Paul Woody, vice president of real estate at Project Renewal, a homeless services nonprofit.How the Paramount deal endedIn the fall of 2020, the owners of the Paramount Hotel began discussing a plan to sell the property at a discount to Breaking Ground, a nonprofit developer that wanted to turn it into rent-stabilized apartments for people facing homelessness.But as the deal neared the finish line, Breaking Ground failed to anticipate pushback from the Hotel Trades Council. In a series of meetings last year, the union said its obligation was to fight for every hotel job and it proposed a range of solutions, including keeping union employees as housekeepers for residents. Breaking Ground, however, said the cost was too high.The nonprofit even asked Mr. Ward, the union’s former president, to help facilitate the conversion. Mr. Ward said he agreed to call Mr. Maroko to gauge his interest in Breaking Ground’s severance offer.This spring, lobbying records show, union representatives met with Jessica Katz, Mr. Adams’s chief housing officer, and other officials about the Paramount. Soon after, Ms. Katz called Breaking Ground and said city officials would not be able to make the conversion happen, according to a person familiar with the conversation. A spokesman for the mayor said the city “cannot choose between creating the housing the city needs and bringing back our tourism economy,” declining to comment on whether the union swayed the decision on the Paramount.The failed conversion saved about 160 hotel jobs, and the Paramount reopened to guests in September.It was a relief for workers like Sheena Jobe-Davis, who lost her job there in March 2020 as a front-desk attendant. She temporarily worked at a nonunion Manhattan hotel, making $20 less per hour than at the Paramount. She was ecstatic to get her old job back.“It is something I prayed and prayed for daily,” she said. More

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      Georgia Senate Race Tops Political Spending in 2022

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      In the heady world of campaign finance, there’s everywhere else, and then there’s Georgia.While political spending in America seems to scale astonishing new heights every two years, these days no place in the nation can rival the Peach State, where an astonishing $1.4 billion has been spent on just four races since the beginning of 2020, according to a New York Times analysis.Two years ago, more than $406 million was spent by both sides during Raphael Warnock’s successful first run for Senate. Not to be outdone, Jon Ossoff and his Republican opponent were aided by $514 million in spending to support their candidacies, a sum that shattered the record for a Senate contest.This year, Gov. Brian Kemp and his Democratic challenger, Stacey Abrams, along with outside groups backing them, raised upward of $250 million. And so far, data from the nonprofit group OpenSecrets shows that nearly $401 million has been spent on the race between Mr. Warnock and his Republican opponent, Herschel Walker, which will be decided in a runoff election on Tuesday.“There’s never been anything like it,” said Bob Houghton, the president of the Georgia Association of Broadcasters, a trade group that represents the TV and radio stations that are, arguably, the real winners in these races. “It just keeps coming.”The torrent of cash is a product of two main factors.Georgia is one of just two states that hold general-election runoffs, which unfold when neither candidate attains at least 50 percent of the vote. These runoff contests essentially amount to second campaigns, with fresh rounds of advertising to buy, get-out-the-vote efforts to pay for, and direct-mail fliers to send.Over the four weeks leading up to Tuesday’s runoff, nearly $81 million had been spent on advertising to support Mr. Warnock or Mr. Walker, according to data from AdImpact, a media-tracking firm. That promotional blitz exceeded — by more than $25 million — the total amount spent in this year’s Senate race in Washington, which itself set a record for the state.The other factor is how Georgia, long considered a Republican stronghold, has slid into purple territory over the past few election cycles. The newfound parity between the parties in the state has drawn significant attention from donors around the country who see Georgia as being in play.“Because Georgia is now a battleground state, Democrats think they have a shot at it,” said Joseph Watson Jr., a professor of public affairs communications at the University of Georgia. “As a result, these local races have become nationalized.”Campaign finance data supports that notion. More than 80 percent of the $53.7 million raised by One Georgia, an independent leadership committee backing Ms. Abrams’s unsuccessful run for governor, came from outside the state, as did almost exactly half of the $38.4 million hauled in by Mr. Kemp’s leadership committee, Georgia First. Mr. Kemp won the race by more than seven percentage points.Those factors are particularly amplified when control of the Senate is at stake, which was the case for both Senate elections in Georgia in early 2021, a time when the runoff period was twice as long as it is this year. That helps explain the eye-popping $507 million in advertising spent during the eight-week runoff contests in Georgia that year, according to AdImpact data.This year, the second-most-expensive race was Pennsylvania’s Senate contest, where Lt. Gov. John Fetterman, Mehmet Oz and their allies spent a combined $313 million. Overall spending in competitive, statewide races in Pennsylvania — including the race for governor — totaled more than $381 million. In Georgia, the amount spent on the races for Senate and governor added up to at least $508 million.All of that money is a boon to advertising firms and TV stations. Hilton Howell, the chairman of Gray Television, which owns stations in all but one market in Georgia, called it a “tremendous amount of spending” and “a nice Christmas present under the tree for our shareholders.” A single ABC affiliate in Atlanta, owned by a different company, has booked $86 million in political advertisements so far this year, more than any local station in America.But some experts question the utility of so much advertising when it comes to actually winning the hearts — and votes — of the citizenry.Erika Franklin Fowler, a professor of government at Wesleyan University and a director of the Wesleyan Media Project, a group that studies political advertising, said the impact of spending on races diminishes as more money and advertising flood into a state or media market.“Because control of the chamber is at stake, or the added cushion, at least, I think that certainly is what is driving these numbers,” she said. “Campaigns and parties care about winning and less about efficiency, shall we say.” More