Dem Consultants Cash in With Crypto Groups Threatening Senate Majority

Prominent Democratic consulting firms have been making bank on the crypto industry’s new super PACs. Now that those groups are setting their sights on the Senate races in Ohio and Montana, a scenario that could destroy Democrats’ majority, will those consultants stay aboard the crypto gravy train?

Political consulting is a mercenary business. It’s hardly surprising that major consulting firms would want a piece of the staggering sum — $85 million as of January — that crypto firms and investors have poured into three affiliated super PACs. Still, it’s hard to imagine party leaders tolerating their allied vendors working with the groups if they challenge Democrats’ Senate majority. 

In an awkward turn of events, one of the crypto super PAC vendors, Impact Research, has been working to help Democrats hold onto their Montana Senate seat. Now, the firm’s clients could try to turn the seat red.

Rolling Stone contacted the consultants to inquire about whether they intend to keep working for the crypto groups, and received no response. The Democratic Senatorial Campaign Committee (DSCC), the party organ that works to elect Democrats, did not respond to questions about the crypto consulting bonanza. 

To date, the crypto threat to Democrats’ Senate majority is only implicit: A spokesman for Fairshake, one of the crypto super PACs, recently told The New York Times that the super PAC plans to get involved in the general elections for Senate in Ohio and Montana. The Times reported that the super PAC “had not yet decided whether to oppose or support” the Democratic incumbents, Sens. Sherrod Brown of Ohio and Jon Tester of Montana, but added that “the signs of what direction Fairshake is headed are clear.” 

That’s because Brown and Tester are both critics of cryptocurrencies — which are decentralized, digital assets with no intrinsic value or clear use-case. In 2022, Tester called crypto “bullshit,” and said: “I see no reason why this stuff should exist.” He added that if Congress were to pass new crypto regulations, people might “think it’s real.” Last fall, Brown wrote a letter to the Biden administration warning that the lack of transparency and disclosure in crypto markets benefits scammers and harms consumers. He also praised the administration for “using its tools to crack down on abuse and enforce the law.”

In recent years, the crypto industry has faced increased scrutiny in Washington. Two of the largest donors to Fairshake — the crypto exchange Coinbase and crypto solutions company Ripple Labs — have been accused of violating federal securities laws by the Securities and Exchange Commission. (Another major Fairshake donor, venture capital firm Andreessen Horowitz, has invested in both Coinbase and Ripple, according to its website.)

Now, the industry is planning to spend a fortune to assemble a Congress where lawmakers are motivated to pass new, crypto-friendly regulations that protect crypto and firm up its place in the market. “We’ll have the resources to affect races and the makeup of institutions at every level,” Fairshake’s spokesperson told the Times. “And we’ll leverage those assets strategically to maximize their impact in order to build a sustainable, bipartisan crypto and blockchain coalition.”

According to the paper, lawmakers in targeted races will receive “industry-related questionnaires asking them to document their stances on crypto issues.”

Fairshake did not respond to a request for comment from Rolling Stone.

Coinbase has donated more than $23 million to Fairshake and an affiliated super PAC, Protect Progress. Kara Calvert, the head of U.S. policy at Coinbase, told the Times that Tester and Brown do not necessarily have “a target on their backs.” She explained, “What I would say is, there is, I think, an opportunity, and there is an important time period between now and the election where there are a lot of policymakers that have to make some decision: Do they want to be for clear rules and consumer protections? Or do they not?”

The threat is clear — and crypto interests aren’t hiding it: Tester and Brown can reverse their positions on crypto, or face a super PAC onslaught. Adding to the potency of the threat is the fact that Democrats cannot afford to lose either of their seats. If they lose one, Republicans will take control of the Senate.

Brown and Tester’s campaigns did not respond to requests for comment. 

It’s not clear yet whether Democratic consultants will keep working with the crypto super PACs — or if they will face any pressure from the party to drop the clients. 

“If Fairshake or Protect Progress are going to be targeting our most vulnerable Democratic senators and endangering the majority, it’s the responsibility of Democratic consultants not to work with them,” says Connor Farrell, who runs the progressive fundraising firm Left Rising. “They would literally be helping elect Republicans and the MAGA agenda.”

At least four major Democratic consulting firms have worked with Fairshake and Protect Progress. They include the polling firms Impact Research and Global Strategy Group, which have collected $274,000 and $128,000, respectively, from the super PACs. 

Impact Research led President Joe Biden’s polling team in 2020. The firm, previously known as ALG Polling, has been working with Tester’s campaign this election cycle, as well as the DSCC and the Montana Democratic Party. Impact Research has also recently worked with the Democratic Congressional Campaign Committee (DCCC), which elects House Democrats.  

Global Strategy Group has worked this cycle with the DSCC and the DCCC, as well as those party committees’ affiliated super PACs, House Majority PAC and Senate Majority PAC.

Fairshake and Protect Progress have paid nearly $13 million to the Democratic ad buying firm Targeted Platform Media. During the 2020 cycle, the firm and its affiliate, Buying Time, purchased ads for Senate Majority PAC and the DCCC. 

Since January, the Democratic direct mail firm Mission Control has been paid $438,000 by Protect Progress. The firm has done significant work this year for House Majority PAC.

Three of the firms — Impact Research, Mission Control, and Targeted Platform Media — have also been working for a super PAC affiliated with Washington’s pro-Israel lobby, American Israel Public Affairs Committee, or AIPAC, which is reportedly planning to spend $100 million in Democratic primaries this year to remove candidates who do not support Israel’s brutal war in Gaza. 

“Just pick up the NRA while you’re at it,” jokes Farrell, “and see if they’re still bipartisan.”