Democratic Party of Oregon officials filed a false report about the source of a $500,000 donation from Nishad Singh, an executive at now-disgraced cryptocurrency firm FTX, but state elections officials with strong ties to the party settled the matter without pursuing criminal charges against anyone with the party.
Elections officials also agreed to slash a proposed fine for the false report from $35,000 to $15,000.
Before making the inaccurate report last October, party officials received multiple points of information indicating that Singh, FTX’s director of engineering, made the extremely large contribution, records show. But they acceded to a “not strong” request from the FTX executive that they instead attribute the donation to Las Vegas-based cryptocurrency funds processor Prime Trust LLC, which helped facilitate the transfer of Singh’s money to the Democratic Party of Oregon.
Singh has since acknowledged under oath he was spending FTX customers’ money on political campaigns.
The elections division and the Democratic Party of Oregon reached the settlement late on May 11, ahead of a scheduled May 12 administrative hearing on the matter.
On May 18, the Secretary of State’s office issued a press release saying, “The investigation did not find clear evidence that the Democratic Party of Oregon knew the true donor when they reported the contribution last year.”
“We need actual evidence of the requisite criminal intent, which is that the DPO ‘knowingly’ received a contribution in a false name, and that isn’t present the facts we know thus far,” Ben Morris, spokesperson for the Secretary of State’s Office, said in email to The Oregonian/OregonLive’s editorial board.
According to a stipulation and final order released by the Secretary of State’s Office on May 12, the Democratic Party of Oregon’s contracted fundraiser contacted Singh about a donation.
It then received $500,000 from Prime Trust with a notation that “NISHAD SINGH” was an originator of the payment along with Prime Trust LLC.
The party’s compliance director then asked Singh who should be listed as the “donor of record.” Singh’s office wrote back, “Nishad prefers Prime Trust.”
The party accepted that as definitive. It appears it did not contact Prime Trust, which describes itself online as a funds processing service, for confirmation.
The secretary of state’s order does not explain why its investigators thought it reasonable for party officials to rely on Singh’s request to list a funds processor as the donor.
Harry Wilson, an attorney representing the Democratic Party of Oregon, wrote in a legal filing that party officials “assumed that Singh controlled Prime Trust LLC,” an assumption that was incorrect. The fact that LLCs frequently donate to political committees and that Singh had hired a donation adviser, conveying “apparent sophistication,” led them to believe Singh had a controlling interest in Prime Trust, Wilson wrote.
Party officials did not ask Singh or Prime Trust if that was the case, nor did they perform a simple Nevada business registry search to see the list of Prime Trust’s controlling managers, none of whom is Singh.
The Democratic Party of Oregon only identified Singh as the donor after The Oregonian/OregonLive contacted Prime Trust in late October to inquire why the company had donated a substantial sum to Oregon Democrats. Party director Brad Martin told The Oregonian/OregonLive at the time that party leaders accepted the cash without knowing much about its origin, even though the contribution was the largest the party had ever received.
The elections director who oversaw the handling of the investigations, Molly Woon, worked for the Democratic Party of Oregon for three years, as its communications director and deputy director. Former Secretary of State Shemia Fagan, a Democrat, said it was unnecessary for Woon to recuse herself from the high-profile case. “I have every confidence and faith in Molly’s professionalism, integrity and commitment to fair application of election law and rules,” Fagan said in January.
Fagan forced out the previous elections director Deborah Scroggin, who had spent nearly a decade overseeing elections in the Portland City Auditor’s Office before taking the job with the state in 2021. Fagan resigned May 8 following news that she had accepted a $10,000-per-month side job consulting for a cannabis dispensary chain, at a time when auditors in the Secretary of State’s Office were auditing Oregon’s marijuana regulatory system.
Oregon is one of five states with no campaign contribution limits, and some political players who support that status quo point to transparency of campaign transaction reporting as mitigating the influence of huge donations. However, elections officials tend to impose mild penalties for breaking the rules. Under Oregon law, it is a Class C felony to make or accept a campaign contribution under a “false name.”
The Democratic Party of Oregon received the $500,000 wire transfer from Prime Trust, the largest contribution the Democrats’ political action committee had ever reported receiving in the 15-year time frame covered by Oregon’s campaign finance database, on October 4, some time after “a fundraiser working under contract with the (Democratic Party of Oregon) communicated with Nishad Singh or his agents about a potential contribution to the (Democratic Party of Oregon),” according to the Oregon Elections Division’s final order on the case.
“Thereafter, the (Democratic Party of Oregon’s) compliance director asked Nishad Singh or his agents whether he or Prime Trust LLC was the ‘donor of record’ for the $500,000 contribution,” according to the document. Singh and his agents did not respond.
On Oct. 7, staff at the Democratic Party of Oregon emailed the contracted fundraiser who had solicited the donation from Singh and informed the fundraiser that the party planned to list Prime Trust LLC as a “top contributor on (Democratic Party of Oregon’s) required advertising disclosure,” according to the elections order.
Later on Oct. 7, the fundraiser forwarded the Democratic Party of Oregon’s email to Singh’s representatives, “asking whether the contribution should be in Mr. Singh’s name or in the name of Prime Trust LLC. … Mr. Singh’s representative responded, ‘Nishad prefers Prime Trust (though not strongly) so go w[ith] that. The fundraiser then told the (Democratic Party of Oregon) to disclose the contribution as coming from Prime Trust LLC.”
Singh subsequently testified under oath as part of a New York criminal case against FTX executives about his political donations in fall 2022 that, “I knew at the time that the … money had to be coming, effectively, from FTX customer funds.”
The Democratic Party of Oregon ultimately sent mailers attacking Republican governor candidate Christine Drazan that listed Prime Trust as one of the top donors that supported the ads.
On Oct. 9, the party reported to the Secretary of State’s Office that it received $500,000 from Prime Trust.
Three weeks later on Oct. 27, The Oregonian/OregonLive sent an inquiry to Prime Trust about why the company was supporting Oregon Democrats. The news organization also sent questions to the Democratic Party of Oregon but did not hear back from either party by deadline. On Oct. 31, the Democratic Party of Oregon identified Singh as the donor for the $500,000, in responses to The Oregonian/OregonLive and in an amended state campaign finance filing.
Read the settlement.
In February, officials proposed a $35,000 fine on the Democratic Party of Oregon because the party’s belated disclosure of the true donor violated the deadline to file a correct transaction report. A lawyer for the party placed blame for the misreported donation on Singh’s “false representations” and informed the state that the party planned to fight the fine. The settlement that elections officials reached with the Democratic Party of Oregon on Thursday, the eve of a scheduled hearing on the penalty, will knock the fine down to $15,000.
Oregon’s penalty for a late campaign finance contribution or expenditure is 0.5% of the transaction amount, multiplied by the number of business days that it was filed late. The penalty is capped at 10% of the transaction amount.
In the agreement, the Democratic Party of Oregon did not strictly agree to disclose the true identities of all of its donors in the future, but the party did agree to try harder to do so. The agreement specifies that the state can take steps at its discretion to more aggressively monitor whether the party is doing so.
In a statement issued May 12, Acting Secretary of State Cheryl Myers said, “The most important part of the settlement are the numerous oversight requirements the DPO has agreed to, including spot checks by Elections Division investigators, to ensure compliance with all state campaign finance laws. In too many cases, people who violate campaign finance laws pay a fine and move on. These oversight requirements will serve the public interest and hold the DPO accountable by ensuring future compliance with campaign finance laws – an outcome that could not have been achieved in court.”
Gov. Tina Kotek declined to comment on Monday on the settlement.
Martin, with the Democratic Party of Oregon, said in an emailed statement that the party welcomed the “closure of a case that boiled down to an individual lying about a donation and the (Democratic Party of Oregon) making the correct information available as soon as it learned about the donor’s lie.”
The Democratic Party has not returned the $500,000 donation. But with FTX filing for bankruptcy, it is possible that the FTX bankruptcy trustee will seek to claw back any FTX-linked funds donated to political organizations.
Note: This article was modified on May 19 to include the Oregon Secretary of State Office’s assertion May 18 that it did not find “clear evidence” the Democratic Party of Oregon knew the “true donor.” The Oregonian/OregonLive originally reported the party “knowingly” filed a false report, which the party strongly disputes. In fact, the party had information that indicated Singh was the donor, and The Oregonian/OregonLive does not intend to imply anything more.
— Hillary Borrud; hborrud@oregonian.com; 503-294-4034; @hborrud