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    Sam Bankman-Fried’s Parents Under Scrutiny in FTX Collapse

    The FTX founder Sam Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.At the height of its corporate power, the cryptocurrency exchange FTX convened a group of athletes and celebrities for a charity event in March at the Miami Heat’s N.B.A. arena. Local high school students competed for more than $1 million in prizes, pitching “Shark Tank”-style business ideas to a panel of judges that included David Ortiz, the former Boston Red Sox slugger, and Kevin O’Leary, an actual “Shark Tank” host.But the event’s organizer was a figure better known in academic circles — Joseph Bankman, a longtime tax professor at Stanford Law School and the father of Sam Bankman-Fried, the now-disgraced founder of FTX.Wearing a baseball cap with FTX’s logo, Mr. Bankman walked onstage to help announce the winners of two $500,000 checks. Behind the scenes, he played the role of FTX diplomat, introducing his son to the head of a Florida nonprofit organization that was helping adults in the area set up bank accounts linked to the crypto exchange’s platform. Two months later, Mr. Bankman-Fried promoted the partnership in testimony to Congress, where he was pushing crypto-friendly legislation.In the months before FTX filed for bankruptcy on Nov. 11, Mr. Bankman was a prominent cheerleader for the company, helping to shape the narrative that his son was using crypto to save the world by donating to charity and giving low-income people access to the financial system.He and his wife, the Stanford Law professor Barbara Fried, were more than just supportive parents backing their child’s business. Mr. Bankman was a paid FTX employee who traveled frequently to the Bahamas, where the exchange was based. Ms. Fried did not work for the company, but her son was among the donors in a political advocacy network that she orchestrated.Now Mr. Bankman and Ms. Fried are under scrutiny for their connections to a business that collapsed amid accusations of fraud and misuse of customer funds. No evidence has emerged linking them to the potentially criminal practices that caused the exchange to implode. But their son was arrested on Monday in the Bahamas after U.S. prosecutors filed criminal charges against him, and his fortune has dwindled to almost nothing. The charitable work that Mr. Bankman spearheaded has largely collapsed.The couple’s careers have been upended. Ms. Fried, 71, resigned last month as chairwoman of the board of a political donor network, Mind the Gap, which she had helped start to support Democratic campaigns and causes. Mr. Bankman, 67, has postponed a Stanford class he had been scheduled to teach in the winter, and he’s recruited a white-collar criminal defense lawyer to represent him. The family faces huge legal bills, and they have become the subject of gossip on Stanford’s campus.“I had a friend who said, ‘You don’t want to be seen with them,’” said Larry Kramer, a former dean of the law school and a close friend of the Bankman-Fried family. “I don’t see how this doesn’t bankrupt them.”In a statement, Risa Heller, a spokeswoman for the couple, said that Mr. Bankman worked for FTX for 11 months but that Ms. Fried had no role in the company. “Joe has spent a lot of his life trying to figure out ways to lift people up out of poverty,” Ms. Heller said. “Most of his time was spent identifying worthy health-related charities.”Mr. Bankman-Fried, 30, said in an interview that his parents “weren’t involved in any of the relevant parts” of the business. “None of them were involved in FTX balances or risk management or anything like that,” he said.Mr. Bankman-Fried said in an interview that his parents “weren’t involved in any of the relevant parts” of the business.Stefani Reynolds/BloombergLong before their son became a billionaire celebrity, Mr. Bankman and Ms. Fried were popular faculty members at Stanford, where they have taught since the late 1980s. At their home on campus, they regularly hosted Sunday dinners with friends and colleagues, which multiple attendees compared to a modern salon.A leading taxation expert, Mr. Bankman has been an outspoken advocate for simplifying the tax filing system and has testified in Congress on tax matters. He also has a degree in clinical psychology and practices as a therapist.The Aftermath of FTX’s DownfallThe sudden collapse of the crypto exchange has left the industry stunned.A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.Market Manipulation Inquiry: Federal prosecutors are said to be investigating whether Mr. Bankman-Fried manipulated the market for two cryptocurrencies, leading to their collapse.Congressional Testimony: The FTX founder said on Twitter that he would appear before a House committee, but he was quiet about a similar request from a Senate committee. Frantic Exchanges: Texts from a group chat that included crypto leaders from rival companies showed the chief executive of Binance, another crypto exchange, accusing Mr. Bankman-Fried of orchestrating trades to destabilize the industry.Ms. Fried, who retired this year, is an expert on the intersection of law and philosophy, and has written about effective altruism, the charitable movement embraced by Mr. Bankman-Fried that uses data to maximize the benefits of donations. In 2018, she helped start Mind the Gap, hoping to bring “Moneyball”-style analytics to political spending, people familiar with her role in the group said.The couple’s lives transformed after Mr. Bankman-Fried started FTX in 2019. He grew the company into a $32 billion business, cultivating a reputation as a hard-working do-gooder who barely slept and intended to donate his fortune to causes backed by the effective altruist movement.Mr. Bankman and Ms. Fried supported their son’s work, though Ms. Fried expressed concerns about his lifestyle. “The sleep worries me,” she said in an interview with The New York Times in May. “I just hope that it’s not exacting a high price on him.”Mr. Bankman-Fried’s business and political empire was always a family affair. The FTX founder was a prolific political donor, and he was part of a network of contributors who gave money to groups recommended by Mind the Gap, people familiar with the organization said. He also helped bankroll a nonprofit organization called Guarding Against Pandemics that was run by his 27-year-old brother, Gabe Bankman-Fried.Mr. Bankman was deeply involved in FTX. In its early days, he helped the company recruit its first lawyers. Last year, he joined FTX staff in meetings on Capitol Hill and advised his son as Mr. Bankman-Fried prepared to testify to the House Financial Services Committee, a person familiar with the matter said. FTX employees occasionally consulted him on tax-related matters, the person said.“From the start whenever I was useful, I’d lend a hand,” Mr. Bankman said on an FTX podcast in August.Mr. Bankman visited the FTX offices in the Bahamas as often as once a month, a person who saw him there said. Among the much-younger staff, he cultivated an avuncular persona, regaling employees with stories from his son’s youth, the person said. He and Ms. Fried stayed in a $16.4 million house in Old Fort Bay, a gated community in Nassau, the capital of the Bahamas; the couple’s names appear on real estate documents, according to Reuters, though Mr. Bankman-Fried has said the house was “intended to be the company’s property.”Ms. Heller, the couple’s spokeswoman, said Mr. Bankman and Ms. Fried “never intended to and never believed they had any beneficial or economic ownership in the house.”As an employee, Mr. Bankman focused on FTX’s charitable operations. He put together the Miami event, selecting the teams of high school students who competed for $1 million in FTX grants. Mr. Bankman also leveraged family connections to expand FTX’s reach. His sister, Barbara Miller, works in Florida as a political consultant and introduced him to Newton Sanon, the chief executive of OIC of South Florida, a nonprofit organization that helps people with work force development training to promote economic mobility. (Ms. Miller did not respond to a request for comment.)Mr. Sanon worked with Mr. Bankman on a financial literacy initiative for low-to-moderate-income adults enrolled in education programs. As part of the collaboration, students who did not have bank accounts could open one linked to FTX’s platform, giving them the option to spend their money on cryptocurrency. Nobody was pushed to buy digital currencies through FTX, Mr. Sanon said, but one participant chose to do so.In Washington, Mr. Bankman-Fried invoked the Florida program as he pressed for legislation to make the United States more hospitable to the crypto industry, testifying to a House committee that the initiative would help low-income people “build savings.”After FTX collapsed, however, Mr. Sanon informed Mr. Bankman that some participants in the FTX initiative may have lost funds they had stored on the platform (including money students had received as a stipend for joining the program).“They wired money in for us to be able to take care of students,” Mr. Sanon said. He declined to specify the amount that the organization received, but he said it was “substantial and very kind.”Mr. Bankman used his personal funds to cover the losses, according to his spokeswoman. Mr. Sanon said that “none of us are happy with how this played out,” but that “those folks were very good to us.”Not all of Mr. Bankman’s partners were so lucky. On Nov. 11, the day that FTX filed for bankruptcy, Mr. Bankman wrote to a Chicago nonprofit that had been promised $600,000 by FTX’s charitable arm. The money wasn’t going to materialize, Mr. Bankman explained, and he couldn’t afford to make up for the shortfall himself.“I’ll be spending substantially all of my resources on Sam’s defense,” he wrote in an email, which was obtained by The Times.Mr. Bankman-Fried’s whole family has felt the effects of his actions. Gabe Bankman-Fried resigned from Guarding Against Pandemics in November. (He did not respond to requests for comment.) Ms. Fried stepped down from Mind the Gap, which held a meeting last month to elect an interim chair and discuss how to proceed without her, people familiar with the matter said. The stress of the situation is exacting a toll: Mr. Bankman looks as if he’s aged 10 years in one month, a friend said.Mr. Bankman and Ms. Fried are part of a small group offering Mr. Bankman-Fried legal advice, according to a person familiar with the matter. The couple has also turned to the Stanford faculty for support: David Mills, a criminal law professor at Stanford and a close family friend, is part of Mr. Bankman-Fried’s legal team. Mr. Bankman has his own lawyer, the former federal prosecutor Ronald G. White.Colleagues and family acquaintances are wrestling with what to say the next time they run into Mr. Bankman and Ms. Fried. Their son has widely been compared to Bernie Madoff, the notorious fraudster who ran the largest Ponzi scheme in history.Still, many people in the family’s social circle view the situation through a sympathetic lens, according to interviews with more than a dozen friends and colleagues. They insist that Mr. Bankman and Ms. Fried couldn’t have known about any wrongdoing at FTX, while acknowledging that Mr. Bankman may have been naïve in his embrace of crypto.“It’s like a Greek tragedy,” said John Donohue, a colleague who has attended Sunday dinners at the Bankman-Fried home. “The story of flying too close to the sun, and having your wings singed.”Emily Flitter More

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    In Appalachia, Margo Miller Leads from “a Place of Courageous Joy”

    “Transforming Spaces” is a new series about women driving change in sometimes unexpected places.Margo Miller, the executive director of the Appalachian Community Fund, describes herself as a “proud Black mountain woman” in a region not widely known for being home to generations of Black people.In her day-to-day work, Ms. Miller, 53, is in charge of financially supporting regional organizations, individuals and groups working to advance social, economic, racial and environmental justice across Appalachia. The largely economically depressed region is a vast swath of land that encompasses some or all of 13 states, including parts of Kentucky, Tennessee, Pennsylvania, the Carolinas, Maryland and all of West Virginia.Support from the fund is sometimes a couple hundred dollars and other times $5,000 or more, depending on the year and the causes.In 2021, the organization gave out more than $600,000 to organizations, individuals and groups in Appalachia, where the often stunning landscape consists of family farms, twisting back roads, steep mountain passes and fairly secluded communities, some with newly revitalized downtowns. Since its inception in 1987, the fund has given away more than $6 million. Ms. Miller said that lately it had been getting a lot more support from a diverse array of donors.“Our range is 50 cents to $50,000,” she said. “We have a donor who would tape quarters inside of an envelope and send it to us.” One year, she added, another regular donor sent a gift of $50,000, “saying, ‘I know the region can really use this gift this year.’”Ms. Miller, who lives in East Knoxville, has become one of the most powerful people in philanthropy in a rapidly evolving region that has long been marred by stereotypes, misunderstanding and, for Black people, erasure, according to academics and leaders of nonprofit groups. Many Black people, including Ms. Miller’s family, have lived in Southern Appalachia and Central Appalachia for at least three generations (she had relatives who worked in Kentucky’s coal mines), but their stories are not often told.Margo Miller, at the Knoxville Botanical Gardens in East Knoxville, a historically Black neighborhood where she has lived since 2008.Jessica Tezak for The New York TimesMs. Miller said she relished having access to the natural beauty that she strives to celebrate as an artist and activist.Jessica Tezak for The New York TimesInstead, the Appalachia portrayed in popular culture tends to be largely associated with stories of white coal miners and their families, a narrative that several scholars, sociologists, artists and residents, Ms. Miller among them, have been working hard to shift.Dr. Enkeshi El-Amin, an assistant professor of sociology at West Virginia University, doesn’t remember exactly when or how she met Ms. Miller, but she does recall hearing about her since her earliest days of living in Knoxville in 2013. “Margo’s name was one of those names that you just knew,” said Dr. El-Amin, whose academic work focuses on how “racial practices shape Black places and how Black people are, in turn, involved in practices that define, contest and reimagine places.” Ms. Miller, she said, “is sort of like an O.G.” She added, “Her name was always there, which tells you a lot.”Ms. Miller, in fact, has always been a natural leader, whether she realized it or not.As a child growing up among the mountains and hollows, or hollers as the valleys are colloquially called, of Roane County, Tenn., and later in North Knoxville, she said, she was “the bossy one who wanted to play the teacher.” In her mostly white elementary school, she was student of the year (the first Black student to receive the title), and in high school she was class president (the first Black student to hold the position). She is a self-professed nerd.“Being a nerd is kind of trendy now, but back then it wasn’t the case,” she said in a recent interview from her office, surrounded by crafting supplies. She’s a big crafter too. “I definitely was a kid who had my nose buried in a book.Standing nearly 5 feet 10 inches, Ms. Miller today knows how to command a room, whether she is speaking or not. But she recalled that the earliest days of her career as an administrator were more challenging, in part, because she is a Black woman. She talks of going on job interviews in the 1990s and white men being surprised when she entered the room. Some would start to say, “I wasn’t expecting you. … ” and she would have a ready comeback.Ms. Miller in 2014, with Rev. Keith Caldwell, left, then the vice president of the N.A.A.C.P. in Tennessee, presented a social justice plan at the Highlander Research and Education Center, which nurtures movements for social, economic and restorative environmental change in disenfranchised communities in Appalachia. Ebony Blevins“Back then, I would laugh and say: ‘I know. You weren’t expecting me to be so tall,” she said. “I would really try to make them feel more comfortable and they’d look at me like, ‘Who are you? I’m waiting for a white Margo Miller.’” Those experiences were demoralizing, but she found joy, support and opportunities to grow in Knoxville’s theater community, where she was surrounded by other Black people. She had immersed herself in theater while in college there and became a performer and stage manager.Ms. Miller said her experiences with racism were not the same today. “I’m currently surrounded by a community of social justice folks who are all about equity and inclusion and anti-racist practice,” she said. “I’m fortunate and do not have the same experience of other sisters who work for mostly white boards and trustees. Many of them have uphill battles.”African Americans make up about 10 percent of Appalachia’s population while those identifying as Hispanic or Latino account for 5.6 percent of the population, a number that is growing, according to the Appalachian Regional Commission. Still, sociologists and historians said, Black and Latino people with roots in Appalachia have a deep connection to the area and their rich history should be studied and appreciated. People like Ms. Miller, who are connected to the region’s history, help with this effort, they said.“You get coal mining stories or you’ll hear of good race relations here because there weren’t many Black folks here, but those stories distort,” Dr. El-Amin, of West Virginia University, said. “Black folks have always been in the region. From slavery on up.”The fund that Ms. Miller heads supports all Appalachians, regardless of race, gender, sexuality or other identities, but under her leadership, which started in 2011, minority Appalachians say they have felt more included. For them, merely seeing a Black woman who is committed to the growth and development of the area is a comfort and source of encouragement.Richard Graves, an artist in Abingdon, Va, a 2021 recipient of $5,000 from the community fund’s fellowship program said that the money made it possible for him to find stability during the first year he worked as an artist full-time. The foundation gave a total of $80,000 to fellows like Mr. Graves. But even more valuable than the financial support, he said, was the community support that came with being in the fund’s network.“Because of how sectioned and pocketed off these rural communities are, doing community work together can be hard,” he said. “It gave me faces and names of people across the region. We met on Zoom every two weeks and continue to keep in touch.”Strengthening community and bringing people together is one of Ms. Miller’s strongest qualities, according to several organizers and beneficiaries of the organization’s fund.“Margo has been a field builder making space for nonwhite voices, nonwhite leadership in the region, in central Appalachia,” Lora Smith, the chief strategy officer for the Foundation for Appalachian Kentucky, said. “She is as unapologetically Appalachian as she is unapologetically a Black woman leading a community fund.”Ms. Miller in the craft room at her home in Knoxville. She retreats there to create and play, finding inspiration in thriftiness and working with various fibers, particularly patchwork.Jessica Tezak for The New York TimesMs. Miller’s fabric shelves in her craft room at her home. She has learned through Appalachian, Japanese, Indian and African methods of mending that great beauty can come out of frugality and being resourceful.Jessica Tezak for The New York TimesMs. Smith, who took over Ms. Miller’s seat as the co-chair of the Appalachian Funders Network, a nonprofit, said that beyond her professional qualifications, Ms. Miller leads with care, openness and vulnerability. She recalled a meeting in which Ms. Miller unexpectedly took words participants had written and combined them into a powerful poem and read it aloud. Ms. Miller has been writing poetry and been an avid crafter since childhood. She’s also a D.J.“It was amazing to then see how people responded to that in a very humanistic way and the vulnerability and openness that her openness brings out in others,” Ms. Smith said. “She leads from a place of courageous joy. The Appalachian Community Fund resources some of the most forward-thinking and radical work in Appalachia and has done so for decades. That takes a courageous leader who is rooted in her values and can take critique and blowback when it comes.”Ms. Miller’s generosity extends beyond the workplace, according to stories from Black activists, organizers and scholars. Dr. El-Amin recalled sharing in early 2021 that she was concerned about whether The Bottom, a space she had created for Black people to gather, study and experience culture together, would survive amid the gentrification of East Knoxville. She was worried that they would not be able to afford to keep the space.“Margo said, ‘I will take the equity out of my house for you all to buy the building,’” Dr. El-Amin recalled. “This is something I will forever remember and she did it.” To Dr. El-Amin, this was yet another example of Ms. Miller’s commitment to fostering Black history, voices and safety in the community.“I’m grateful that I was in a position to make the purchase happen,” Ms. Miller said, adding that the line of equity loan was repaid in less than a year, and that she then signed a deed to remove herself from ownership of the building.Ms. Smith said she judges how good executive directors are by how well-received they are by their younger employees and collaborators. The best leaders, she said, engage with young people who may have different ways of thinking and may push them beyond their comfort zones. Ms. Miller, she said, is one of these leaders.“She embraces next-generation leadership and is actively standing with and supporting younger people,” Ms. Smith said, “especially Black, Brown and queer folks, in stepping into their power and leading the region forward.”For her part, Ms. Miller said she anticipated that she would stay in her role for another year or so, but felt that she was ready to seek out new challenges.“I want to figure out who I want to be when I grow up,” she said. “I think in order to serve in the next leg of whatever I do, I need to take the time to rest and welcome the next generation of philanthropic leaders.”Ms. Miller, a self-proclaimed proud Black mountain woman, centers herself while overlooking the LeConte Meadow at the Knoxville Botanical Gardens.Jessica Tezak for The New York Times More

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    Most Americans Are Expected to Save, Not Spend, Their $600 Check

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyMost Americans Are Expected to Save, Not Spend, Their $600 CheckWhile lawmakers debate increasing the stimulus payments to $2,000, experts say it would make far more sense to give more money to the unemployed.Galen Gilbert, a 71-year old lawyer who lives in a Boston suburb, plans to deposit his stimulus check into savings. “I’m not really suffering financially,” he said.Credit…Katherine Taylor for The New York TimesNelson D. Schwartz and Dec. 30, 2020Updated 4:49 p.m. ETGalen Gilbert knows just what he will do with the check he gets from Washington as part of the pandemic relief package, whatever the amount: put it in the bank.“I’ve got more clients than I can handle right now and I’ve made more money than I usually do,” said Mr. Gilbert, a 71-year-old lawyer who lives in a Boston suburb. “So I’m not really suffering financially.”Cheryl K. Smith, an author and editor who lives in Low Pass, Ore., isn’t in a rush to spend the money, either. She plans to save a portion, too, while donating the rest to a local food bank. “I’m actually saving money right now,” Ms. Smith said.President Trump’s demand to increase the already-approved $600 individual payment to $2,000, with backing from congressional Democrats, has dominated events in Washington this week and redefined the debate for more stimulus during the pandemic. Mitch McConnell, the Senate majority leader, said on Wednesday he would not allow a vote on a standalone bill increasing the checks to $2,000, dooming the effort, at least for now.Whatever the amount, the reality is that most Americans right now are much more likely to save the money they receive.Of course, the money will be a lifesaver for the roughly 20 million people collecting unemployment benefits and others who are working reduced hours or earning less than they used to. Yet, for the majority of the estimated 160 million individuals and families who will receive it, spending the money is expected not to be a high priority.After an earlier round of $1,200 stimulus checks went out in the spring, the saving rate skyrocketed and remains at a nearly 40-year high. That largely reflects the lopsided nature of the pandemic recession that has put some Americans in dire straits while leaving many others untouched.Economists on the right and left of the political spectrum said that when otherwise financially secure people receive an unexpected windfall, they almost invariably save it. The free-market economist Milton Friedman highlighted this phenomenon decades ago.Many experts said a truly stimulative package would have earmarked the payments for those who need it most — the unemployed.“We know where the pockets of need are,” said Greg Daco, chief economist at Oxford Economics. “Putting it there would be a much more efficient use of the stimulus.”And because the money will immediately be put to work — the jobless don’t have the luxury of saving it — it would also have a much bigger impact on the overall economy, through what experts refer to as the multiplier effect. In essence, each dollar given to a person in need is likely to benefit the economy more because it would be used to pay for, say, groceries or rent.“Providing $2,400 to a family of four in the same financial situation as they were at the end of 2019 doesn’t do much to boost the overall economy right now,” Mr. Daco said. “It’s not whether it’s a positive or not. It’s their potency that’s in question.”Individuals with an adjusted gross income in 2019 of up to $75,000 will receive the $600 payment, and couples earning up to $150,000 a year will get twice that amount. There is also a $600 payment for each child in families that meet those income requirements. People making more than those limits will receive partial payments up to certain income thresholds.A more effective approach, experts say, would have raised unemployment insurance benefits to the jobless by $600 a week, matching the supplement under the stimulus package Congress passed last spring, rather than the $300 weekly subsidy the new legislation provides. Democrats had pushed for larger payments to the jobless and included it in legislation that passed the House, which they control. But the measure met stiff resistance from Republicans, who control the Senate, and was not included in the final compromise bill.The Coronavirus Outbreak More