The Perfect Enemy | FTX collapse dooms founder’s effort to prevent another pandemic
December 2, 2022
Read Time:12 Minute

When the coronavirus pandemic hit and the world shut down in the spring of 2020, many mourned the loss of life, jobs and normalcy.

Sam Bankman-Fried, then a 28-year-old cryptocurrency entrepreneur, and his brother Gabe, a 25-year-old congressional staffer, said the pandemic provided them with something else: an opportunity to make a difference.

Harnessing the enormous wealth created by FTX, the cryptocurrency exchange that Sam Bankman-Fried had founded, they undertook a project to spend potentially billions of dollars on pandemic prevention, a long-neglected priority on Capitol Hill even amid the coronavirus crisis. The plan, drawn from the brothers’ adherence to a philosophy called effective altruism, sought to maximize philanthropic giving in ways that can have the most impact.

Virtually overnight, the Bankman-Frieds began making contributions on a staggering scale: A Washington Post review of lobbying disclosures, federal records and other sources found that the brothers and their network have spent at least $70 million since October 2021 on research projects, campaign donations and other initiatives intended to improve biosecurity and prevent the next pandemic.

But the sudden collapse of FTX, which filed for bankruptcy last Friday after reports that customer funds were being used to prop up a sister trading firm, has sparked a financial contagion expected to doom the brothers’ pandemic-prevention agenda, according to interviews with more than two dozen people who have worked with the Bankman-Frieds’ teams, received their donations or were being wooed to join them.

While Sam Bankman-Fried’s spending had evoked comparisons to public health champions like Bill Gates and political kingmakers like George Soros, some commentators and former allies now suggest other parallels — such as to disgraced Theranos founder Elizabeth Holmes, who vowed to revolutionize health care, but became enmeshed in scandal. Washington lawmakers who embraced Bankman-Fried’s donations scarcely a week ago are now distancing themselves, as regulators circle his financial operations.

The shock waves from FTX’s free fall have rippled across the public health world, where numerous leaders in pandemic-preparedness had received funds from FTX funders or were seeking donations.

Sam Bankman-Fried, who resigned as CEO last Friday and has seen a personal fortune valued at $16 billion evaporate within a week, did not respond to requests for comment sent to FTX and his former colleagues. In a Twitter thread on Tuesday night, he apologized for FTX’s insolvency and vowed to prioritize repaying his customers.

Reached by phone on Saturday, Gabe Bankman-Fried said he would try to return the call, but did not respond to subsequent messages. He stepped down on Monday as director of Guarding Against Pandemics, an advocacy organization that he founded in July 2020, which was fueled by his brother’s cash.

Keenan Lantz, the new interim executive director, said Guarding Against Pandemics was “proud” of its work and hoped the “momentum” on pandemic prevention would continue.

“Despite uncertainty about GAP’s future, the effort to prevent pandemics worse than COVID-19 is vitally important and we hope it will continue in some way,” Lantz said in a statement.

In the months leading up to FTX’s crash, the Bankman-Frieds and their network had rapidly increased their spending on pandemic-prevention initiatives, according to a review of funding announcements, political donations and lobbying disclosures — record-breaking sums and unconventional choices that sometimes astounded political and public health experts. FTX-backed projects ranged from $12 million to champion a California ballot initiative to strengthen public health programs and detect emerging virus threats (amid lackluster support, the measure was punted to 2024), to investing more than $11 million on the unsuccessful congressional primary campaign of an Oregon biosecurity expert, and even a $150,000 grant to help Moncef Slaoui, scientific adviser for the Trump administration’s “Operation Warp Speed” vaccine accelerator, write his memoir.

Leaders of the FTX Future Fund, a spinoff foundation that committed more than $25 million to preventing bio-risks, resigned in an open letter last Thursday, acknowledging that some donations from the organization are on hold.

“We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor,” the fund’s former leaders wrote. “We are so sorry that it has come to this.”

The Future Fund’s commitments included $10 million to HelixNano, a biotech start-up seeking to develop a next-generation coronavirus vaccine; $250,000 to a University of Ottawa scientist researching how to eradicate viruses from plastic surfaces; and $175,000 to support a recent law school graduate’s job at the Johns Hopkins Center for Health Security.

“Overall, the Future Fund was a force for good,” said Tom Inglesby, who leads the Johns Hopkins center, lamenting the fund’s collapse. “The work they were doing was really trying to get people to think long-term … to build pandemic preparedness, to diminish the risks of biological threats.”

Inglesby said his team had anticipated other collaborations with the fund. “We were hopeful that we would be able to work with them in the future,” he said.

Sam Bankman-Fried charmed Washington. Then his crypto empire imploded.

Beyond public health, the flurry of spending on lobbyists, campaign contributions and political communications experts allowed the brothers to gain access to corridors of power, securing meetings with House Speaker Nancy Pelosi (D-Calif.), Senate Minority Leader Mitch McConnell (R-Ky.) and multiple Biden administration officials to advocate for their pandemic prevention agenda, according to people who spoke on the condition of anonymity to describe private meetings.

Guarding Against Pandemics spent more than $1 million on lobbying Capitol Hill and the White House over the past year, hired at least 26 lobbyists to advocate for a still-pending bipartisan pandemic plan in Congress and other issues, and ran advertisements backing legislation that included pandemic-preparedness funding. Protect Our Future, a political action committee backed by the Bankman-Fried brothers, spent about $28 million this congressional cycle on Democratic candidates “who will be champions for pandemic prevention,” according to the group’s webpage.

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“The brothers tried hard to keep congressional attention on biodefense,” said Luciana Borio, senior fellow for global health at the Council on Foreign Relations and an infectious-disease expert, who spoke on a pandemic-preparedness panel with the Bankman-Frieds that was hosted by Democratic congressmen in April.

The initiatives and Sam Bankman Fried’s campaign donations, which went well beyond candidates who focused on pandemic preparedness and made him among the top donors in the Democratic Party, quickly elevated the brothers’ profile in Washington. Gabe — who as recently as February 2021 had worked for Rep. Sean Casten (D-Ill.), handling the junior congressman’s constituent mail — soon found himself in meetings with senior Democrats like Pelosi, urging them to redouble their efforts on pandemic legislation and boost funding to agencies like the Biomedical Advanced Research and Development Authority, or BARDA, devoted to procuring medical countermeasures for crises.

Some officials and experts courted by the brothers said they appreciated their interest, but found them politically naive.

“I didn’t get the sense they were that sophisticated or had a clear vision of what they wanted to do,” said one well-known pandemic expert, who spoke on the condition of anonymity to describe private meetings with the Bankman-Frieds. “They seemed earnest and well-intentioned but didn’t have a defined set of goals.”

Even before FTX’s crash, Sam Bankman-Fried also faced persistent questions about whether his pandemic-prevention agenda was a vehicle to win favor on Capitol Hill — which he could then exploit for other goals, such as influencing cryptocurrency regulations.

“It’s completely reasonable skepticism,” said one of the Bankman-Frieds’ pandemic advisers. “I’m 100 percent sure Gabe cared about pandemics … I don’t know what to think about [Sam].”

Most of the brothers’ public health efforts have now come to a screeching halt. A sprawling array of political groups, health researchers and even media organizations that received money from them or their network are reviewing next steps or cutting ties. Many staff declined to speak on the record, concerned that customers whose finances were destroyed by FTX might seek to claw back the brothers’ donations.

For instance, Guarding Against Pandemics had retained PLUS Communications, an arm of conservative messaging organization FP1 Strategies, to help build its brand in Washington — work that abruptly halted in the past week, said people familiar with the arrangement.

The FTX Future Fund awarded $1.5 million to Stanford University’s Center for Innovation in Global Health in July for seed grants intended “to catalyze research and innovations that prepare for and help prevent the next pandemic.”

But Stanford has taken down the announcement in the wake of FTX’s troubles. Michele Barry, a global health expert who directs the Stanford center, said Sam Bankman-Fried had reached out to her for advice on how to have an impact on pandemic prevention.

“He was smart, thoughtful and publicly spirited,” Barry wrote in a text message. “He was personally engaged and passionate about using his money to make a difference.”

The Bankman-Frieds’ family foundation in February also committed $5 million to ProPublica, a nonprofit news organization, to support reporting focused on pandemic preparedness and biosecurity, including one-third of the grant delivered upfront. The funding has subsidized several staff and articles — including a high-profile story with Vanity Fair about the possibility that covid leaked from a Chinese laboratory, which frustrated some of the Bankman-Frieds’ pandemic advisers who pointed to criticism of its translations of Mandarin Chinese. ProPublica was told last week that the remaining two-thirds of the grant is being paused, a spokesperson confirmed.

“ProPublica is committed to continuing this investigative work,” spokesperson Alexis Stephens wrote in an email, adding the publication has continued to review questions raised about its article with Vanity Fair and plans “to report back to our readers in the near future.”

Taking on Washington

Raised in an elite academic family, as the sons of Stanford Law professors, and the nephews of Linda Fried, dean of Columbia University’s public health school, the Bankman-Fried brothers witnessed debates about how to shape policy such as watching how their father went to war with tax lobbyists in a bid to simplify tax filings — and became committed to philanthropy at a young age.

Both brothers did stints at Jane Street Capital, a quantitative trading firm, but while Sam continued in the financial world, Gabe pivoted to work in Washington, D.C., as a data expert for a progressive organization before taking a job in 2019 as legislative correspondent for Casten, an Illinois scientist who had just been elected to Congress. Two former colleagues in Casten’s office recalled Gabe Bankman-Fried’s quixotic efforts to automate office tasks, such as trying to set up a program that would help automate the congressman’s replies to constituents’ letters — a difficult goal, given the idiosyncratic nature of such letters. A spokesperson for Casten declined to comment on Gabe Bankman-Fried’s tenure, citing staff turnover.

While the brothers have largely retreated from public view this week, they have expounded on their philosophy in interviews over the past two years. Sam Bankman-Fried said that while he worried about threats from advanced artificial intelligence and nuclear war, he was particularly concerned about what he regarded as the inevitable arrival of a virus that would be deadlier than covid.

He lamented that Congress had insufficient incentives to focus on long-term problems like preventing pandemics. “The default is nothing happens … the momentum to push for something to change has to be big enough to overcome inertia,” he said on the 80,000 Hours podcast in April, explaining why he had spent millions of dollars backing a candidate in a Democratic primary in Oregon. “The amount spent in primaries are small. If you have an opinion there, you can have impact.”

But after his handpicked candidate in Oregon — Carrick Flynn, a political newcomer who had conducted biosecurity research — received less than 19 percent of the vote in his primary race in May, Sam Bankman-Fried suggested he would reconsider future political strategies. “There’s really diminishing marginal returns here,” he told NBC’s Chuck Todd in September.

Despite such failures, the Bankman-Frieds’ pandemic-prevention lobby efforts in Washington continued expanding, as they commissioned polls, sought to hire nationally known pandemic experts as advisers, and retained an array of lobbyists across at least six organizations, according to federal disclosures and internal documents reviewed by The Post.

Guarding Against Pandemics hired a lobbyist last year, for instance, who had been a top aide to Sen. Joe Manchin III (D-W. Va.) — even as the West Virginia Democrat emerged as a key vote holding up President Biden’s Build Back Better legislation, which included billions of dollars for pandemic preparedness. This year, the group also hired Ridge Policy Group, the lobby firm run by former Bush administration Homeland Security Secretary Tom Ridge, and recently brought on Monument Advocacy, also led by a former Bush administration homeland security official.

But even as the Bankman-Frieds’ profile rose in public health circles, there were signs the brothers were out of their depth.

Gabe Bankman-Fried appeared on a June global health panel hosted by Foreign Policy magazine, alongside Matthew Hepburn, an infectious-disease physician who helped lead Operation Warp Speed. Hillary Carter, a biosecurity expert on the White House National Security Council, beamed in by video. As the two experts delved into pandemic preparedness and traded jargon, the moderator offered up a “really simple” question for the third panelist: What kept Gabe Bankman-Fried up at night?

“The thing that worries me most, quite frankly, is a much more deadly pandemic than covid. Possibly an engineered one,” Bankman-Fried responded, before repeatedly deferring to the other panelists. “There’s far more esteemed national security experts on this panel than myself.”