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Last week, Public Citizen’s Rick Claypool and I filed a complaint with the Federal Election Commission based on my research into apparent campaign finance violations by the Coinbase cryptocurrency exchange.

Read the full complaint and my updated article.

Complaint: https://www.citizen.org/article/coinbase-fec-complaint/

Updated article: https://www.citationneeded.news/coinbase-campaign-finance-violation/

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

COMPLAINT Coinbase, Inc. (“Coinbase”) is a cryptocurrency platform offering exchange, custody, and trading services. On March 20, 2024, Coinbase made a $500,000 contribution to the Congressional Leadership Fund (ID: C00504530), a hybrid PAC. On May 30, 2024, Coinbase made a $24,999,995 contribution to Fairshake (ID: C00835959), a super PAC. At the time of both contributions, Coinbase was negotiating a contract with the United States Marshals Service, a federal agency. In making these contributions of approximately $25.5 million, Coinbase violated federal campaign finance laws that expressly prohibit federal contractors from making contributions to political committees while negotiating or performing federal contracts. This complaint is filed pursuant to 52 U.S.C. § 30109(a)(1) and is based on information and belief that Coinbase violated the Federal Election Campaign Act of 1971 (“FECA”) prohibition on federal contractor contributions. If the Federal Election Commission (“FEC” or “Commission”), “upon receiving a complaint . . . has reason to believe that a person has committed, or is about to commit, a violation of [the Federal Election Campaign Act] . . . . [t]he Commission shall make an investigation of such alleged violation . . . .” 52 U.S.C. § 30109(a)(2) (emphasis added). BACKGROUND FECA prohibits a federal contractor from making contributions, directly or indirectly, to “any political party, committee, or candidate for public office or to any
building” if “payment for the performance of such contract or payment for such material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the Congress.” 52 U.S.C. § 30119(a)(1). The FEC has interpreted the prohibition on contributions to political committees as including contributions to hybrid PACs and independent expenditure-only political committees (“IEOPCs” or “super PACs”), a position they have made clear including in a statement regarding published after the 2011 Carey v. FEC decision. FECA additionally prohibits any person from knowingly soliciting any such contribution from a federal contractor. 52 U.S.C. § 30119(a)(2). The prohibition on campaign contributions from federal contractors applies from when a request for proposals is sent out or when negotiations commence (whichever is earlier) until the completion of performance under the contract or the termination of negotiations (whichever is later). 52 U.S.C. § 30119(a)(1); 11 C.F.R.§ 115.1(b) Coinbase is a federal contractor subject to the FECA prohibition Coinbase is a federal contractor, holding a current government contract with the United States Marshals Service (USMS), a federal agency within the United States Department of Justice. This contract has a $7 million obligated amount, and a $32.5 million total contract value. The USMS contract opportunity was first published on March 4, 2024, and offers were due on April 1, 2024.
CONCLUSION FECA and FEC regulations prohibit a federal contractor from making a contribution to any political committee during the period in which a federal contract is being negotiated or performed. According to the definitions of the prohibited time period outlined in FEC regulations, Coinbase was prohibited from making campaign contributions beginning on March 4, 2024. The prohibition will continue until the completion of performance under the contract or the termination of negotiations (whichever is later). As the contract is still ongoing, Coinbase has been prohibited from making any contributions from March 4, 2024 through to the date of this complaint. Consequently, there is reason to believe Coinbase violated the federal contractor contribution prohibition by making a $500,000 contribution to a hybrid PAC, the Congressional Leadership Fund, and a $24,999,995 contribution to a super PAC, Fairshake, during the period it was negotiating and/or performing its federal contracts. Furthermore, both the Congressional Leadership Fund and Fairshake are aware of the prohibition on accepting contributions from federal government contractors, and may have violated FECA and FEC regulations if they had reason to believe Coinbase was negotiating a federal contract at the time they solicited and/or accepted the contributions.

Coinbase appears to have violated campaign finance laws with a $25 million super PAC donation

Actively involved in contract negotiations with a federal government agency, Coinbase was likely prohibited from making its $25 million contribution to the Fairshake cryptocurrency-focused super PAC in May 2024.
Molly White (Citation Needed)
#crypto #cryptocurrency #uspol #uspolitics #coinbase #fairshake

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