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Newsletter | Revolving Door Project Newsletter | November 23, 2022

A Few Things We Aren't Thankful For

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A quick round-up of a surprisingly busy news week.

This edition of the Revolving Door Project newsletter was originally published on our Substack. View and subscribe here.

Hello everyone, and welcome to a special holiday edition of the RDP Newsletter. Since we’re off for Thanksgiving tomorrow and Friday, this week’s edition will be a bit more off the cuff and includes some material that would normally be in our Hack Watch newsletter. So sit back, relax, and enjoy.

In Wake Of FTX Debacle, New Push For The Regulation FTX Asked For
By: Dylan Gyauch-Lewis

FTX’s collapse has elicited quite a bit of hand wringing, as people finally seem to grasp the dangers of the crypto industry that we’ve warned about for a long time now. The Nation ran our autopsy of the scandal last week. And this morning, The New Republic ran our story about how longstanding crypto allies in Congress are using this newfound concern to push for regulation – the exact regulation FTX wanted. 

Basically, crypto allies want to shift power from the Securities and Exchange Commission to the Commodities Futures Trading Commission. Why might the crypto industry want this? Perhaps because the CFTC is weaker, less resourced, and more captured than the SEC. Perhaps because the SEC has mandates to protect investors while the CFTC has none. Certainly, not for the public good.

Oh also, here’s a clip of a CEO admitting on cable news that he bribed the CFTC. Nothing to worry about, I’m sure.

Conservatives Claim Gensler, Warren Too Friendly With Crypto For… Reasons??
By: Henry Burke

Republicans are moving to capitalize on FTX’s collapse, seeking to use Sam Bankman-Fried’s campaign donations and public statements to discredit Democrats. Are they criticizing crypto allies in Congress? Nope!  Republicans are doing everything they can to tarnish the names of the crypto industry’s strongest opponents in D.C.: SEC Chair Gary Gensler and Senator Elizabeth Warren.

On November 10th, Congressman Tom Emmer (R-MN) tweeted “Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We’re looking into this.” He has offered nothing to support his claim that Gensler has worked to help Bankman-Fried or any other crypto enthusiast. 

As we have written before Sam Bankman-Fried and the Crypto industry writ large have fought to be regulated by the underfunded and weaker Commodities Future Trading Commission, fearful of the aggressive moves the SEC has taken under Gensler’s leadership to crack down on the crypto industry’s sale of unregulated securities. Emmer also forgot to mention the $44,000 the National Republican Campaign Committee (which he is chair of) received from Sam Bankman-Fried, nor the donations his campaign received from Ryan Salame, the Republican Co-CEO of FTX. 

Fox News launched a similarly unsubstantiated attack on Warren, implying some sort of relationship between the Senator and Bankman-Fried based on a campaign donation made by his father, Joseph Bankman, six years ago. Warren has been vocal for years about the need for stricter regulation of crypto markets, viewing the entire industry with more skepticism than most Senators. The implication that she assisted Bankman-Fried’s company is thus all the more outrageous. Fox also attempts to tie Joseph Bankman to Warren because he signed a letter of support for a bill Warren introduced in 2016. Bankman was one among dozens of academics to voice their support for the measure. 

It’s clear that conservative voices are using the FTX collapse not only for political benefit, but to attack those who are most skeptical of the crypto market. With FTX’s collapse making the need for action seem all the more apparent, crypto skeptics ought to be wary of solutions that align with the goals of the industry. 

Federal Transit Administration Insists That The FOIA Response They Gave Us Is Wrong

By: KJ Boyle

In September, we submitted a FOIA request for communications between the White House Infrastructure Coordinator Mitch Landrieu and Nuria Fernandez, administrator of the Federal Transit Administration, to get insight into the implementation of the Bipartisan Infrastructure Law. The FTA FOIA department responded that there were no records whatsoever which matched our request, meaning that there’s no written record anywhere in the federal government of any communication between the infrastructure czar and the top official in charge of providing “financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys and ferries.” So last Friday we ran a blog post expressing concern about the lack of communication.

The Department of Transportation immediately reached out claiming we were misinformed. They maintain that Landrieu and Fernandez have met several times and are working closely together, but providing no documentation of said meetings. Nuria Fernandez also seems to have deleted her twitter account after we tagged her in our tweet of the blog. It’s unclear whether there’s a severe lack of record keeping in the planning and contents of these meetings, or the FTA’s FOIA department mismanaged our request, though both possibilities are highly concerning (not to mention that either scenario would be playing fast and loose with federal law). 

In any case, the Transportation Department now claims that two top federal officials have met several times to discuss multimillion-dollar policy projects, but nobody ever thought to write down any record whatsoever of their multiple conversations occurring (or to, you know, note the meeting in a calendar).

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