(Bloomberg) -- The Long Island village of Southampton has long served as a getaway for New York’s ultra-wealthy, but in the summer of 2022, it welcomed a crop of newly minted magnates. George Santos, an underdog congressional candidate from the other end of the island, was there to greet them.
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Santos, in his early 30s, found common cause with the millennial millionaires.
Both had dubious sources of wealth — his from unexplained business deals and theirs from marketing cryptocurrencies to the masses. While they were looking to upend financial systems and write crypto-friendly regulations in Washington, Santos was hoping to use their new money to get elected to Congress.
Their plotlines merged for a few weeks last summer, when Santos attended at least two fundraisers with high-flying crypto execs in the Hamptons, according to donors who attended. But fall brought a sharp reversal of fortune for both.
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Although he won his election, Santos is now under scrutiny for fabricating significant parts of his life story. He allegedly invented stints at top Wall Street firms, a Jewish heritage, a volleyball championship and his mother’s death on 9/11. Meanwhile, the crypto donors have seen much of their riches wiped out after FTX Trading Ltd. — one of the largest exchanges that many of them worked for — collapsed just days after Santos got elected.
One event that drew them together was a fundraiser for Michelle Bond, a Republican candidate in Long Island’s 1st Congressional District, at 75 Main, a restaurant so difficult to get into that billionaire businessman John Catsimatidis spent $75,000 last year just for the privilege of having a standing reservation.
The other, at a private Southampton residence, was for Adam Laxalt, a Republican Senate candidate from Nevada, according to one attendee who spoke on condition of anonymity because his financial services firm doesn’t want him to discuss political activity publicly.
Attending both events was Bond’s ubiquitous boyfriend, FTX executive Ryan Salame.
Bond, who moved back to Long Island from Virginia to mount a campaign inspired by former President Donald Trump, was well connected to the crypto world.
Flush with cash, the crypto industry gave more than $80 million to federal campaigns and committees during 2021 and 2022, outpacing prodigious donor groups such as drugmakers and defense contractors.
Long Island was a particularly attractive spot for the crypto set, because of the proximity to New York City and the chance to flip some seats for Republicans, who benefited from a court-ordered redrawing of congressional districts to undo a Democratic gerrymander.
Novice crypto donors were willing to back political newcomers, in contrast to most corporate industries that prefer to give to incumbents who already have a track record and more senior positions on committees.
Santos, 34, was one such newcomer, presenting himself as a gay, Jewish Latino Republican who could read a billion-dollar balance sheet. As was Bond, who touted her connections to the Trump family, and her anti-abortion and pro-police stances. She lost her August primary.
FTX founder Sam Bankman-Fried gave mostly to Democrats, saying that he wanted to earn as much money as possible in order to address long-term problems such as pandemics and the role of artificial intelligence in society. Before FTX collapsed, he said he would also give as much as $1 billion in the 2024 presidential race.
Earlier this year, he pleaded not guilty to criminal charges, including conspiracy to violate campaign finance laws. He faces trial in October.
But at least 11 donors with direct ties to the crypto industry, including Salame, his parents and former FTX chief regulatory officer Daniel Friedberg, gave to both Bond and Santos.
Salame and his parents, who hadn’t made a federal political contribution in this century until 2022, donated the maximum $5,800 to Santos’s campaign. Tiffany Santos, George’s sister, gave $5,800 to Bond’s campaign which, like Santos’s, was partially self-financed.
Crypto donors made up only a small part of Santos’s fundraising. He collected more money from contributors such as brokers, investors, real estate developers and insurance executives. He didn’t return a request for comment for this story.
Unlike the crypto money that came from a now-deflated asset bubble, the source of Santos’s newfound wealth remains largely unexplained. In his 2020 campaign, Santos filed a financial disclosure form saying he had no assets. Two years later, he said he was worth as much as $10 million — drawing a $750,000 salary from a company he founded called the Devolder Organization, after his mother’s maiden name.
Santos then loaned more than $700,000 to his congressional campaign.
Santos — who has admitted to lying about previous jobs at Goldman Sachs and Citigroup — said his firm was a capital introduction service, brokering business opportunities to investors.
The Department of Justice and the New York Attorney General are currently investigating Santos, and complaints have been filed with the House Office Committee.
Santos is also getting increased scrutiny from the Federal Elections Commission, which enforces campaign finance laws.
The Santos campaign may have had as many as three campaign treasurers in the past week, after one abruptly resigned. On Tuesday, Santos’s year-end campaign finance report listed as its treasurer, Andrew Olson, who has never served as a campaign treasurer, FEC records show.
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