FTX Hex at the Met: Givebacks of Bankman-Fried’s Problematic Benefactions

I’ve written often over the years about museums’ givebacks of antiquities to countries of origin. But the Metropolitan Museum’s eyebrow-raising announcement (via this court document) that it is returning monetary contributions it received from the indicted Sam Bankman-Fried (aka: SBF), founder of the FTX cryptocurrency exchange, is a reversal that rarely (if ever) happens in the museum world. SBF had given the Met (in two installments) some $550,000 in charitable donations.

As stated in the press release announcing the indictment, a federal grand jury in Manhattan charged SBF with “conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.”

When I first read about the Met’s agreement to relinquish $550,000 to “the FTX Debtors” in Jo Lawson-Tancred‘s June 5 report for Artnet (which had relied upon a prior report in CoinDesk), I sent this naïve emailed query to three high-ranking Met officials:

Why would the Met return to FTX a donation that it had made to the museum, in order to help FTX recover from financial problems that it seems to have brought upon itself?

Here’s the terse reply I received from the museum’s usually very helpful spokesperson:

We’ll have no comment here.

As it happened, I ran into the museum’s director, Max Hollein, on June 7 at the Met’s spring press breakfast—the last one under the auspices of the outgoing (in both senses) president, Daniel Weiss, who had announced that he’d be leaving the Met this month:

After the press program had concluded, I had asked Hollein to explain why the Met had agreed to relinquish the donation. He indicated that the answer pertained to bankruptcy law, and suggested I seek further explanation from the Met’s veteran senior vice president, secretary & general counsel, Sharon Cott (whom I last met under other fraught circumstances). Sharon never replied to my repeated emailed query.

Some pressure must have been exerted by the US Attorney’s office: According to the NY Times’ account of his news conference in December, Damian Williams, the United States attorney for the Southern District of New York, “called on ‘any person, entity or political campaign that has received stolen customer money’ to ‘work with us to return that money to innocent victims.'”

I have left several messages seeking further information from the office of Damian Williams, whose deputy, Andrea Griswold, is handling the case. If I learn more, you’ll learn more.

Griswold”? To the best of William Griswold‘s knowledge, Andrea is no relation to the distinguished (but playful) director of the Cleveland Museum of Art, who quipped, when I reached him by phone, “She could be a distant cousin.” From their resemblance (including the reddish hair), I’d say it’s a possible match:

Since I haven’t been able to get direct access to the principals in the Met/FTX affair, let’s look at how others have analyzed this backfired benefaction:

—As noted by Ben Terris in a guest essay for the NY Times, FTX funds have been a hot potato for many recipients:

Politicians and organizations all around Washington have been returning their donations and trying to figure out how to make up for the lost cash.

—As reported by the Wall Street Journal‘s Eric Wallerstein (whose coverage has been particularly trenchant):

FTX’s new management is also trying to claw back donations that Mr. Bankman-Fried and other executives made to politicians and political groups [Wallerstein’s link, not mine]. 

The company said in a press release that its new management has been approached by “a number of recipients of contributions or other payments” from FTX that want to return the money. The company has urged others to do the same. For those that don’t, FTX said, it will “commence actions before the bankruptcy court” to require that the money be returned, with interest.

As for FTX’s gifts to nonprofits (such as the Met), Wallerstein reported that “in a recent interview with the Wall Street Journal, Mr. Bankman-Fried said the majority of his charitable giving was sincere. But he also said that some was to curry favor with the public [emphasis added].” Presumably, the Met donation was part of that public-relations campaign. What I haven’t yet been able to determine is whether SBF tried to “curry favor” by donating to other cultural institutions besides the Met. (Please feel free to let me know!)

The FTX affair “has quickly become one of the biggest campaign finance scandals in years,” wrote Kenneth Vogel and Ken Bensinger in the NY Times, “as both Democrats and Republicans grapple with questions about their eagerness to tap into a stream of cash from a murky and largely unregulated industry that emerged suddenly as a powerful political player.”

Such questions may also be vexing nonprofits, which have already been grappling with givebacks to countries-of-origin for antiquities in their collections, and may now have to deal with requests for previously donated funds that may or may not have already been spent.

As reported in the above-linked Times article: “Some politicians—including Hakeem Jeffries, the incoming Democratic leader in the House [their link, not mine], and Representative-elect Aaron Bean, a Republican from Florida—either returned donations linked to FTX or gave the money to charity after the company became embroiled in scandal. Other groups say they are setting the cash aside for possible restitution to victims of the alleged scheme.”

And in other art-related news (which broke yesterday), this just in from the US Attorney SDNY:

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the United States had filed and settled a civil forfeiture action against $12 million derived from the sale of stolen Southeast Asian antiquities by indicted antiquities dealer Douglas Latchford. [CultureGrrl readers may remember encountering that name in connection with objects that were eventually relinquished by the Metropolitan Museum to Cambodia.]

The Settlement with the daughter of the late Douglas Latchford, who died in 2020, resolves claims that Latchford transferred the proceeds from the sale of stolen antiquities to bank accounts in the Bailiwick of Jersey. As part of the Settlement, Latchford’s daughter has also agreed to the forfeiture of a 7th-Century bronze statue depicting the four-armed goddess Durga, which is alleged to have been stolen from Vietnam in 2008 and which Latchford allegedly purchased using tainted funds. The proposed settlement is subject to review by a district judge in the Southern District of New York.

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