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The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

Crypto mogul Sam Bankman-Fried on why he got involved in politics

The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

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Good morning, Early Birds. The author former Democratic presidential candidate Marianne Williamson turns 70 today. Tips: earlytips@washpost.com. Thanks for waking up with us.

In today’s edition … Leigh Ann chats with the Democratic megadonor Sam Bankman-Fried … Democrats move a step closer to selecting the first 2024 primary states … Congress seeks IRS probe amid suspicions that audits targeted Trump foes Comey, McCabe  … but first …

🚨: “Former Japanese Prime Minister Shinzo Abe, a towering political figure at home and abroad, died after being shot at a campaign event Friday, doctors said, shocking a nation where firearms laws are among the world’s strictest and gun violence is rare,” our colleague Michelle Ye Hee Lee writes.

“Abe, 67, was stumping for a fellow politician from the ruling Liberal Democratic Party (LDP) in Nara, near Osaka, on Friday morning when a gunman opened fire with what police described as an improvised weapon.”

At the White House

Happening today: President Biden will sign an executive order this morning meant to protect access to abortion, three weeks after the Supreme Court struck down Roe v. Wade. It doesn't include measures some Democratic lawmakers have suggested, such as declaring a national public health emergency or opening abortion clinics on federal lands.

Instead, the order will direct the Department of Health and Human Services to take unspecified actions to protect access to abortion pills. It also sets up an interagency task force and directs Attorney General Merrick Garland and White House counsel Dana Remus to coordinate the efforts of volunteer lawyers seeking to represent patients who travel cross state lines for abortions, among others.

The campaign

Sam Bankman-Fried on what he learned from his recent experience in primary contests

Six questions for … Sam Bankman-Fried: We chatted with the billionaire founder and chief executive of FTX, one of the largest crypto exchanges, about the plummeting value of digital currencies, what he thinks of bills to regulate crypto and the millions of dollars he's shelled out so far this year backing Democrats.

This interview has been edited and condensed for length and clarity.

The Early: Let’s start big picture: Crypto’s aggregate value is now below $1 trillion, from a high of $3 trillion dollars last year. Some of these currencies are fake. How can you convince me and others that crypto is a real thing?

Bankman-Fried: Everything that labels itself with cryptocurrency is the be-all and end-all — that I certainly wouldn't say. But this is not a cryptocurrency specific selloff. Crypto is obviously down a lot, but so are a lot of other sectors. The tech sector overall is down about 50 percent from its peak over the last six months or so. And given that crypto is a moderately more volatile asset class, it is, if anything, a little bit surprising to me that that data hadn't been higher.

The Early: Do you think that ultimately there need to be fewer instruments, fewer digital currencies, fewer exchanges, fewer choices for consumers? Or are more better?

Bankman-Fried: I always think that what we should see is fewer followed by more. We should be looking to build a really dynamic, diverse ecosystem, and that really should be our long-term goal here. But at the same time, I also think there is a lot of hot air and a lot of fluff in the ecosystem. So what I think would be best for the industry would be to sort of weed out a lot of the flimsier things, and then reset and then start to grow in terms of the number of venues, the number of assets that are taken seriously. Because I do think that long term there's potential for huge growth and a huge number of dynamic participants.

The Early: Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) introduced legislation that would essentially give the Commodity Futures Trading Commission primary regulatory oversight over crypto. Why is the CFTC the preferred regulator?

Bankman-Fried: I get really excited about it. I think it sets a good precedent. [The bill and other legislative efforts on the Hill] do start to present sketches of a comprehensive regulatory framework for crypto, which I think is absolutely what's needed to protect consumers and get real federal oversight of the industry.

In terms of the interagency questions, I think there's going to be a role for the CFTC; I think there's going to be a role for the [Securities and Exchange Commission]. I would say [I’m] not super prescriptive in terms of how we think about that. I think that the CFTC makes a lot of sense, though, as the markets regulator. They're really experienced, competent and efficient and have a deep knowledge of markets and of crypto markets, and you could do a really good job of that. I also think that the SEC is likely to play a large role in, at the very least, thinking about what it would mean to register a digital security.

The Early: You’ve spent millions of dollars this year backing Democrats through your PAC, Protect Our Future PAC. Why did you decide to get involved in politics?

Bankman-Fried: I see it much more as policy than politics — which is to say, I think that there are some really important issues that face the country. Chief among those has been pandemic prevention. Handling covid, we made a lot of big mistakes, and it led to tens of trillions of dollars of economic damage and millions of lives lost. Much of that was preventable.

So that's sort of a high level. We're really excited to support candidates who are making a point of putting pandemic prevention as one of their core policy positions and promising to fight for getting enough air time, frankly, to help the United States get prepared.

The Early: I want to ask you specifically about Carrick Flynn, who lost the Democratic primary for an open House seat in Oregon in May. Your PAC spent $11 million backing him. Did it give you second thoughts about spending that much money after he lost?

Bankman-Fried: In the end, you win some, you lose some. But there are really decreasing marginal gains from funding. I think that was certainly one takeaway. And there are a lot of smaller things as well — learning points for me in terms of thinking about who to support and how much. I think the biggest thing is just, like, keep adapting and understanding the way you can have the most positive productive impact.

The Early: Your colleague Ryan Salame, the co-chief executive of FTX Digital Markets, has spent millions of dollars supporting Republican candidates this year through his own PAC. Do you coordinate? Is he the Republican donor and you’re the Democratic donor?

Bankman-Fried: That's not how I look at it. I've given to other PACs and supported candidates in other races, including Republican primaries, and I've said publicly I would support candidates of either party. Ryan and I care about some of the same issues — particularly preventing the next pandemic — and we each make giving decisions that we think will advance those goals.

The Campaign

Next steps in the scramble for 'early state' status

The Democratic National Committee’s rules and bylaws committee will meet today as the party inches closer to deciding which states will to have the privilege of voting first in the 2024 presidential primary.

The committee’s decision to reconsider which states should vote first after the Iowa caucuses melted down in 2020 has touched off a scramble between state Democratic parties, with 16 states and Puerto Rico competing for the first four — or maybe five — slots.

Each state made its case — some of them bolstered by campaign-style videos — in June at the committee’s last meeting. The committee gave a signal of what it's looking for in a follow-up questionnaire sent out to state parties after the meeting, which asks about states’ voting and election rules: Does your state have automatic voter registration? What the voter ID rules?

The states that traditionally vote or caucus first — Iowa, New Hampshire, Nevada and South Carolina — are vying to hang onto their slots — except for one. Nevada is mounting an all-out campaign to leapfrog its rivals and secure “First in the Nation” status. 

“At this point, it’s not just about holding onto our spot,” Judith Whitmer, the Nevada Democratic Party’s chairwoman, said in an interview on Thursday. “We want to push Nevada to first place because we feel that Nevada is more representative of the country.”

The effort is a continuation of the successful campaign waged 16 years ago by Harry Reid, the late Senate majority leader, to convince Democrats to add his home state to the lineup of early states, long led by Iowa’s caucuses and New Hampshire’s primary. 

Nevada Democrats, including former Reid aides, have argued that the state is more diverse than its rivals, with significant Black, Hispanic and Asian populations. They’ve also emphasized its relatively affordable media markets and liberal voting laws.

New Hampshire — viewed as Nevada’s chief rival for the No. 1 slot — is emphasizing its compact size allows, which Democrats there argues for easier retail campaigning and its long tradition of holding its primary without Iowa-style debacles. State law also mandates that its primary be held one week before any other, which could make it trickier to dethrone.

“Clearly the date of the primary will be first,” Ray Buckley, the New Hampshire Democratic Party’s longtime chairman, told the Early in May. “Whether it’s sanctioned [by the DNC] or not — we would hope that we were able to work that out.”

Meanwhile, in Nevada: The Republican nonprofit One Nation, which is aligned with Senate Minority Leader Mitch McConnell, is going up with its first Spanish-language TV ad of the cycle criticizing Sen. Catherine Cortez Masto (D-Nev.), a top Republican target.

One Nation is spending $300,000 to air the ad through July 25. Democrats have been running Spanish-language ads for months attacking the Republican Senate nominee, former Nevada attorney general Adam Laxalt.

In the agencies

IRS asks Treasury watchdog to probe James Comey, Andrew McCabe

The latest on IRS-gate: “Congressional Democrats and Republicans on Thursday seethed over new reports that the IRS may have targeted President Donald Trump’s political enemies with audits, issuing shared calls — backed by the tax agency itself — for a full federal probe into the matter,” our colleagues Tony Romm, Lisa Rein, Josh Dawsey and Devlin Barrett report. “The demands arrived in response to reports that the IRS initiated detailed reviews into the tax records of James B. Comey, the former FBI director, and Andrew McCabe, a deputy who later took over the agency.”

  • “An investigation into the matter would be carried out by the Treasury Inspector General for Tax Administration, or TIGTA, which typically opens probes at lawmakers’ request.”

What we're watching

Senate Majority Leader Chuck Schumer (D-N.Y.) has scheduled a classified briefing for senators on Chinese microchip manufacturing on Wednesday afternoon as he presses lawmakers to reach a deal to pass bill to counter China and bolster American chipmakers.

The briefing comes after McConnell warned last week that he would block an agreement if Democrats kept up their long-thwarted effort to pass a reconciliation bill to rein in prescription drug costs and combat climate change with only Democratic votes.

Coffee Break(s)

7 less expensive summer hot spots: It’s mid-summer and your wallet has already taken a beating. Trips to Europe, Mexico and Central America are more expensive than they were in 2019, per our colleague Natalie B. Compton. Still need that vacation? Here are seven cheaper alternatives: 

  • Instead of Costa Rica, try Peru
  • Instead of Paris, try Montreal
  • Instead of the Maldives, try Belize
  • Instead of Tuscany, try Portugal
  • Instead of Turks and Caicos, try Greece
  • Instead of Bangkok, try Guadalajara
  • Instead of Hawaii, try Florida

The Media

Weekend reeeads 🌴

Thanks for reading. You can also follow us on Twitter: @theodoricmeyer and @LACaldwellDC.

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