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cryptocurrency
How Crypto Giants Are 'Exploiting' Citizens United to Buy 2024 Elections
A new analysis and call for a constitutional amendment comes as reporting sheds light on Sen. JD Vance's ties to a right-wing group backed by tech and digital currency investors.
Aug 21, 2024
A report out Wednesday takes aim at how giants of the cryptocurrency industry are using the 2010 Citizens United ruling by the U.S. Supreme Court, which opened the floodgates for dark money in political campaigns, to make a massive deregulatory push ahead of this year's pivotal election.
Based on Public Citizen research director Rick Claypool's analysis of federal election data from OpenSecrets, the consumer advocacy group accused the crypto industry of "exploiting" the Citizens United v. Federal Election Commission ruling "to an unprecedented degree, dwarfing direct corporate spending by Big Oil and other corporate sectors in the 2024 elections."
Claypool found that crypto companies have dumped over $119 million into the 2024 federal elections so far, mostly through super political action committees (PACs) focused on elevating candidates that back their industry and opposing any skeptics.
"Nearly half (48%) of all corporate money contributed during this year's elections ($248 million so far) came from crypto backers," the report notes. Koch Industries, the conglomerate of the infamous Koch brothers, "is a distant second place," having put $25 million toward Americans for Prosperity Action and $3.25 million toward electing Republicans to Congress.
"That cryptocurrency companies like Coinbase and Ripple are able to spend over a hundred million dollars to silence crypto's critics and elevate its backers embodies everything that is wrong with the Supreme Court's disastrous Citizens United decision."
Since Citizens United, there has been at least $884 million in known corporate contributions to elections. Already, crypto corporations' spending for the past three cycles amounts to 15% of that total—and 92% has been during this cycle. The industry now only trails fossil fuel companies in election-related spending in the wake of the 2010 ruling.
"That cryptocurrency companies like Coinbase and Ripple are able to spend over a hundred million dollars to silence crypto's critics and elevate its backers embodies everything that is wrong with the Supreme Court's disastrous Citizens United decision," Claypool said in a statement.
Claypool stressed that "corporations can't vote. But the sole reason crypto is a hot-button topic in this election cycle is that crypto businesses are spending eye-popping sums to make themselves impossible to ignore."
"All this spending is a concern not just because the crypto companies may be able to buy deregulation," he warned. "This direct spending by crypto corporations is shattering a long-standing norm—and is likely to set a precedent for vastly more direct spending by corporations in upcoming elections."
Much of the industry's money from this cycle—nearly $114 million—has gone to the sector's Fairshake PAC and its affiliates. The report details how the group intervened in two Democratic primaries:
When Fairshake and its affiliates spend money to influence races, either by attacking crypto skeptics or boosting crypto supporters, the ads don't mention crypto at all. The super PAC spent $10 million on ads against Rep. Katie Porter in California's Senate primary and $2 million against Rep. Jamaal Bowman in a primary contest in New York. Rather than criticizing candidates for not sufficiently supporting crypto, both attack campaigns smeared the candidates' using unflattering claims having nothing to do with crypto policy.
In Bowman's case, he was also targeted by the American Israel Public Affairs Committee (AIPAC) and its affiliates for his criticism of U.S. support for Israel's assault of the Gaza Strip. Another target of both pro-Israel and crypto groups was fellow progressive Rep. Cori Bush (D-Mo.), who lost her primary earlier this month.
Industry use of Fairshake is expected to continue through November. The report points out that "the super PAC recently pledged to spend $25 million backing 18 House candidates—nine Democrats and nine Republicans—in the general election."
The report also lays out how both major parties' presidential nominees—former Republican President Donald Trump and Democratic Vice President Kamala Harris—and their allies have been courting the industry this cycle:
- Donald Trump, who previously expressed skepticism toward the sector and whose Securities and Exchange Commission initiated tough enforcement against alleged crypto misconduct, has rebranded himself as the pro-crypto presidential candidate. Speaking at the Bitcoin Conference in July, Trump vowed to make the U.S. the "crypto capital of the planet and the bitcoin superpower of the world" and proposed the federal government hold a "strategic bitcoin reserve."
- Trump's running mate selection of Sen. JD Vance (R-Ohio), whose background in venture capital and crypto-friendly policies, is seen as another pro-crypto signal.
- Kamala Harris advisers, meanwhile, have reportedly reached out to crypto corporations to "reset."
- Senate Majority Leader Chuck Schumer (D-N.Y.) spoke at a "Crypto4Harris" virtual fundraiser in August, declaring: "Crypto is here to stay no matter what. So Congress must get it right... we all believe in the future of crypto." Sens. Kirsten Gillibrand (D-N.Y.) and Debbie Stabenow (D-Mich.) also participated.
The new Public Citizen report—which concludes with a call for a constitutional amendment to overturn Citizens United—was released a day after Reutersreported that before Vance joined the Republican ticket, "he co-founded a Silicon Valley-backed donor organization to finance right-wing news stories, voter turnout operations, and election polls."
"The existence of Rockbridge and Vance's link to it have been previously reported," the outlet detailed. "But three internal Rockbridge documents reviewed by Reuters and half a dozen sources familiar with the group reveal the scale of its ambitions, its roughly $75 million budget for 2024, and its role in seeking to influence November's presidential election."
"Rockbridge showcases how Trump's selection of Vance as his running mate could empower a new set of Republican businessmen: heavyweight tech investors who favor far-reaching deregulation," Reuters continued. "Many want to weaken the U.S. Securities and Exchange Commission, which regulates Wall Street, and reduce oversight of cryptocurrency and artificial intelligence."
Meanwhile, in remarks cheered by Bush, Sen. Bernie Sanders (I-Vt.) declared at the Democratic National Convention on Tuesday night that there is an urgent "need to get big money out of our political process."
"Billionaires in both parties should not be able to buy elections, including primary elections," he said. "For the sake of our democracy, we must overturn the disastrous Citizens United Supreme Court decision and move toward public funding of elections."
OpenSecrets revealed last week that outside spending during the current election cycle has hit a record $1 billion.
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New Probe Reveals 'Real-World Harm' of Crypto Mining Operations
"This report vividly shows how proof-of-work crypto-mining operations are contributing to increased air, water, and noise pollution in many communities across the U.S."
Apr 05, 2023
A report published Wednesday by the Environmental Working Group examines how the "mining" process behind popular cryptocurrencies including bitcoin, Dogecoin, and Monero creates a wide range of pollution that is harming communities and fueling the climate emergency.
The EWG report—entitled Proof of Problems: Bitcoin Mining's Pollution Toll on U.S. Communities—profiles six case studies of adverse effects of the cryptocurrency mining process known as "proof-of-work."
"This report vividly shows how proof-of-work crypto-mining operations are contributing to increased air, water, and noise pollution in many communities across the U.S.," EWG policy director and report co-author Jessica Hernandez said in a statement.
"It amplifies the voices of those who are fighting to save their homes and livelihoods from the bitcoin mines invading their communities," Hernandez added. "The industry cannot continue to turn a blind eye to the real-world harm it is causing or greenwash the problem away."
\u201cOur new analysis showcases the devastating environmental impact of #Bitcoin mining on communities across the nation. #ChangeTheCode\n\nhttps://t.co/lIG32P0hP8\u201d— EWG (@EWG) 1680709503
As an executive summary of the report details:
Not all bitcoin mines are alike. Some rely on the resurrection of dormant fossil fuel power plants, some find low-cost high-pollution fuel sources like burning coal waste in Pennsylvania, and others flare gas from oil wells to generate the necessary electricity, like the mines blighting Montana's scenery.
They all use the same technology, individual computer hardware no bigger than a shoe box or two, all competing to solve the same puzzle and earn a few bitcoin. But it takes thousands of these mining computers, called rigs, to become competitive in the mining industry. That's why some companies are placing multiple shipping crates full of bitcoin mining rigs in communities across the U.S...
What these mines have in common is their use of proof-of-work, which is wasteful by design. This system, a type of software to record and manage bitcoin transactions, has proven highly inefficient, requiring massive amounts of fossil fuel-generated electricity to operate. Proof-of-work is a source of constant noise, a blight in communities across the country, and a hotbed of fraud and corruption that bilks consumers and ratepayers out of billions of dollars.
"Despite staunch opposition nearly everywhere bitcoin is mined, Wall Street bankers and other large financial backers manage to continue this assault on climate and communities across the country," the report states. "Change is needed, and it's needed urgently."
\u201c"Living near a crypto mine was so stressful, we sold our house and moved," Cyndie Roberson told EWG.\n\nSuch is life living near a #Bitcoin mining operation. @CleanUpBitcoin \n\nhttps://t.co/I51L7dBhR3\u201d— Alex Formuzis (@Alex Formuzis) 1680714542
One of the report's case studies shows how a Blockstream mining center in Adel, Georgia created so much noise that the residents of one nearby house spent thousands of dollars to install 11 layers of insulation as the constant din damaged their hearing and kept them captive in their own home.
"It sounds like 1,000 jet engines taking off at one time. You can hear it five miles away from here," said Annette Tiveron, who lives in the house. "It ripples our pond from the vibration with the machines. It's literally shaking your brain."
The EWG report renews the group's calls to "change the code, not the climate" and highlights alternatives to proof-of-work, such as "proof-of-stake," to which the cryptocurrency Ethereum switched last year.
\u201cWe\u2019ve heard so many stories about the harms Bitcoin mining has had on communities across the country. \n\nIt\u2019s not a smart \u201cbusiness development\u201d or \u201cfinancial choice\u201d if it comes at the expense of ordinary people\u2019s clean air, water, and climate.\u201d— Change The Code (@Change The Code) 1680628980
"Speaking with people around the country has been eye-opening in revealing the extent of the problems that bitcoin mines are causing in communities," EWG editor in chief and report co-author Anthony Lacey said in a statement. "It's hard to learn of these stories and not ask why bitcoin miners can't change their code to be better neighbors."
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How Concentrated Wealth and Corporate Power Nurtures the Greed of Thieves
Larceny from our corporate world’s most “respected” chief execs supplies the con artists among us with rationalizations for their own scamming behaviors.
Jan 28, 2023
What makes for a thieving culture? An overabundance of pickpockets? Tsunamis of burglary and shoplifting?
Most definitely not. To truly gauge a society’s larcenous leanings, many of us would posit, we need to look beyond the nimble-fingered and focus more on the smooth-talkers, the power-suited flimflammers who thrive in any society where significant numbers of people feel a driving need to get rich quick.
The most recent example? Federal prosecutors last month charged the crypto currency CEO phenom Sam Bankman-Fried with committing “one of the biggest financial frauds in American history.” The 30-year-old billionaire, the Securities and Exchange Commission charges in a separate filing, built an immense financial empire on a “house of cards.”
The executive now trying to pick up those cards — the new CEO of Bankman-Fried’s FTX cryptocurrency exchange — says his predecessor simply engaged in “old-fashioned embezzlement,” not even stopping to bother with the “highly sophisticated” thieving of Enron’s fabled executive crooks a generation ago.
Right before Bankman-Fried’s brief appearance on America’s economic stage, the nation’s face of fraud belonged to Elizabeth Holmes, the founding CEO of the health-tech company Theranos.
Holmes raised some $900 million from a “star-studded” list of investors who ranged from media mogul Rupert Murdock to Henry Kissinger. Early in 2021, a federal jury convicted her of various frauds in what the Washington Postcalled “the most high-profile test of whether Silicon Valley’s “fake it until you make it” ethos could withstand legal scrutiny.”
The hustles of our Bankman-Frieds and Elizabeth Holmeses can certainly make for entertaining reading. But Freya Berry, a veteran corporate fraud investigator, sees their scams “as not as unusual as you might think” — and not as entertaining either. With “rewards high” and “penalties higher,” she notes, corporate miscreants “go to great pains to conceal” their nefarious ways, even “making death threats to whistleblowers.”
We need these whistleblowers. We also need to understand that our thieving culture rests on more than the outright larceny of our indicted corporate crooks. Our most accomplished corporate thieves, in fact, never fear indictment. They steal in broad daylight. They regularly steal livelihoods — from the thousands upon thousands of men and women who’ve worked ever so diligently, sometimes for many years, to make them fabulously rich.
We’re now living through an intense stretch of this theft. Tech’s top execs are now laying off workers at a fearsome rate. Earlier this month, Microsoft announced plans to pink-slip some 10,000 workers. Amazon is cutting 18,000, Google parent Alphabet 12,000, IBM nearly 4,000. Overall, estimatesForbes, tech firms have so far this month alone given the heave-ho to 56,000 employees.
What makes these layoffs “thefts”? Simple avarice. Investors on Wall Street “expected more growth,” explainsGrid economics analyst Matthew Zeitlin, than Big Tech companies “are currently showing.” That has Big Tech share prices sinking, “and any time share prices fall, investors and executives get antsy — and workers often pay the price.”
Meanwhile, the antsy CEOs slashing all these jobs are continuing to stuff dollars into their own personal pockets, at overall pay rates that rarely dare drop below a quarter-million dollars a week.
This past October, Microsoft disclosed that chief exec Satya Nadella’s annual compensation had jumped 10.2 percent to just under $55 million. Nadella now makes more in one year than the typical Microsoft employee can make in 289 years. Back in 2018, the typical Microsoft worker only had to labor 154 years to earn what the company’s CEO made in just one.
This past December brought news that Alphabet’s Sundar Pichai has a new three-year “performance” package that stands to award him $210 million.
Execs like these set a thieving tone for our entire society. Their grand fortunes don’t just make the rest of us feel ever poorer. They leave us ever more vulnerable to the con artists who promise shortcuts to jackpots.
And this larceny from our corporate world’s most “respected” chief execs supplies the con artists among us with rationalizations for their own scamming behaviors. The corporate big boys play their games, they tell themselves, we play ours.
Societies that let enormous wealth concentrate in the pockets of a few make all this inevitable. They nurture greed and grasping. They always have. They always will.
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