Crypto Tries to Recreate the Koch Money Machine to Pack Congress with Shills
BanksterCrime:
Editor’s Note: For watchdog Better Markets’ detailed analysis of crypto’s “track record of lawlessness, deception, fraud, and investor losses,” see here.
By Pam Martens and Russ Martens,
As meticulously chronicled by Jane Mayer and numerous others, the billionaire owners of fossil fuels giant Koch Industries — Charles Koch and his late brother, David Koch – spent decades building the tentacles of what became known as the Kochtopus. It was, and remains, a sprawling network of Super Pacs, nonprofits, dark money groups, activist groups and think tanks deployed to push an anti-regulatory agenda in Congress – particularly when it comes to fossil fuels and climate change. Koch’s latest addition is an Orwellian voter-mining database and its dangerous appendages.
Crypto billionaires appear to have studied the Koch playbook carefully and are now rapidly rolling out a strikingly similar network. As we reported on Tuesday, a handful of crypto billionaires and their related crypto businesses had plowed $92.87 million (as of April 30) into a Super Pac, ironically called “Fairshake,” to defeat candidates for Congress who refuse to be toadies for the crypto agenda.
We obtained the $92.87 million receipt figure for Fairshake directly from records at the Federal Election Commission, where there is a lag in updating new donations to the public FEC website. According to Bloomberg News, subsequent to April 30, three prior big-money donors to Fairshake, crypto exchange Coinbase, venture capital firm Andreessen-Horowitz, and blockchain services company, Ripple, each donated $25 million to Fairshake. That additional $75 million would bring Fairshake’s current total to at least $167.87 million — making it one of the largest Super Pacs in the U.S.
The vast majority of Fairshake’s money comes either directly from the crypto exchange, Coinbase, or from its billionaire investors. One of those is Brian Armstrong, Chairman and CEO of Coinbase. Armstrong has been brazenly outspoken for the head of a publicly-traded company about threatening members of Congress to either get on board the crypto bandwagon or risk losing their seats in the November election.
On the Coinbase blog on June 3, Armstrong wrote this:
“Crypto voters won’t be taken seriously until we send a clear message to political candidates that it is bad politics to be anti-crypto. Therefore, the simple conclusion is that we need to support pro-crypto candidates on both sides of the aisle, and unceremoniously vote anti-crypto candidates out of office.”
Fairshake did just that in the spring primary in California. It spent over $10 million in attack ads against Congresswoman Katie Porter’s bid for a U.S. Senate seat, falsely claiming that she took campaign money from Big Oil, Big Pharma and Big Banks. Porter was soundly defeated. Because her House term is up in January, Porter’s strong public-interest voice will be eliminated completely from Congress.
Like Koch-funded Americans for Prosperity, crypto has also created a “grassroots movement” called StandwithCrypto.org. On its website, it’s sending a warning to the members of Congress that it plans to target. Senator Sherrod Brown, a Democrat from Ohio who is running for reelection this year, is given an “F” rating, with the words “Strongly against crypto” next to his photo on the website.
The crypto tentacles also include a dark money nonprofit called Cedar Innovation Foundation. Its website shows that it is already running ads ordering Senator Sherrod Brown (who chairs the Senate Banking Committee) to get Securities and Exchange Commission Chair, Gary Gensler, to back off. The SEC has sued Coinbase for the unregistered sale of securities. The SEC scored a major win in court in March with the judge ruling that the case can move on to trial.
Cedar Innovation Foundation is so new and so dark that it could spend tens of millions of dollars this year without providing a hint of its donors, its officers, or even its address. One thing we do know, thanks to OpenSecrets.org, is that it has hired a highly experienced lobbying firm in Washington, D.C. – Mindset Advocacy LLC – which is also a lobbyist for – wait for it – units of Koch Industries.
Coincidentally – or perhaps not – crypto has a connection to fossil fuels. According to a 2022 report from the White House Office of Science and Technology Policy, crypto is driving energy consumption in the wrong direction if we are to stop the dangerous heating of the planet. The report revealed this:
“From 2018 to 2022, annualized electricity usage from global crypto-assets grew rapidly, with estimates of electricity usage doubling to quadrupling. As of August 2022, published estimates of the total global electricity usage for crypto-assets are between 120 and 240 billion kilowatt-hours per year, a range that exceeds the total annual electricity usage of many individual countries, such as Argentina or Australia. This is equivalent to 0.4% to 0.9% of annual global electricity usage, and is comparable to the annual electricity usage of all conventional data centers in the world.”
In a June 2021 Senate hearing, Senator Elizabeth Warren revealed this about crypto:
“Cryptocurrencies have turned out to be a fourth-rate alternative to real currency. First, cryptocurrencies are a lousy way to buy and sell things. Unlike the dollar, their value fluctuates wildly depending on the whims of speculative day traders. You know, in just the last two months, the value of Dogecoin increased by more than ten-fold and then declined by nearly 60 percent. Now that may work for speculators and fly-by-night investors, but not for regular people who are looking for a stable source of value to get paid in and to use for day-to-day spending.
“Second, crypto is a lousy investment. Unlike, say, the stock market, the crypto world currently has no consumer protection — none. As a result, honest investors and people trying to put aside some savings are at the mercy of fraudsters. Pump and dump schemes are outlawed in the case of ordinary stock, but they have become routine in crypto trading. One study found that the level of price manipulation in cryptocurrency is — and I quote — ‘unprecedented in modern markets’…
“Finally, there are the environmental costs of crypto. Many cryptocurrencies are created through ‘proof-of-work’ mining. It involves using computers to solve useless mathematical puzzles in exchange for newly minted cryptocurrency tokens. Such mining has devastating consequences for the climate. Some crypto mining is set up near coal plants, spewing out filth in return for a chance to harvest a few crypto coins. Total energy consumption is staggering, driving up demand for energy. If, for example, Bitcoin — just one of the cryptocurrencies — were a country, it would already be the 33rd largest energy user in the world — using more energy yearly than all of the Netherlands.
“And all those promised benefits – the currency that would be available at no cost to millions of unbanked families and that would provide a haven from the tricks and traps of big banks – well, those benefits haven’t materialized.”
Warren’s assessment of crypto’s lack of productive purpose was backed up in a letter sent on June 1, 2022 by 1600 of the smartest minds in technology to key members of congress and congressional committees. The authors wrote:
“We strongly disagree with the narrative — peddled by those with a financial stake in the crypto-asset industry— that these technologies represent a positive financial innovation and are in any way suited to solving the financial problems facing ordinary Americans….”
Raising more alarm bells is the fact that the Koch-related Americans for Prosperity Action (AFP Action) is also targeting Senator Sherrod Brown by running a $1 million ad campaign supporting his opponent, Bernie Moreno.
If ever there was a screaming call for campaign finance reform, it is now.
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