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Washington lobbyists sever ties with FTX founder Sam Bankman-Fried after crypto exchange implodes

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Former FTX CEO Sam Bankman-Fried and his allies are losing advocates in Washington, as the company hits rock bottom.

Lobbyists who worked for FTX and Guarding Against Pandemics, a nonprofit partially funded by Bankman-Fried and run by his brother, Gabe Bankman-Fried, told CNBC that they have severed ties with the cryptocurrency exchange after its collapse.

FTX announced Friday that it was filing for Chapter 11 bankruptcy and that Bankman-Fried was stepping down as CEO after revelations of a liquidity crisis at the company.

FTX’s stunning downfall has prompted Washington lawmakers, including the Biden White House, to more closely scrutinize the company and the industry at large. The moves by some in Washington to distance themselves from FTX followed a broader push by the company and key executives to ingratiate themselves with policymakers.

Bankman-Fried became known as a crypto “darling” in Washington as he gave more than $39 million to candidates and committees in the 2022 midterm elections, according to data from OpenSecrets. Ryan Salame, the co-CEO of FTX Digital Markets, gave more than $23 million during the same election cycle, according to the data.

But many of FTX’s efforts to gain a toehold in Washington appear to be crashing to a halt. After Bankman-Fried donated $2,900 to the campaign of Sen. Dick Durbin, D-Ill., this year, an aide for the No. 2 Senate Democrat told CNBC on Monday that the contribution “will be donated to an appropriate charity.”

​Eliora Katz, a former aide to Republican Sen. Pat Toomey who was listed on disclosure reports as FTX’s sole in-house lobbyist, no longer works at the company, according to a person familiar with the matter. It is unclear when exactly she left, or if she resigned or was fired from the job. Lobbying disclosure reports show that FTX spent $540,000 on in-house lobbying in the second and third quarters of this year combined. FTX lists Katz as working for the company on its third-quarter lobbying disclosure, which includes July through September.

Some of the people in this story declined to be named to speak about private matters. An email to Katz’s FTX address bounced back.

Conaway Graves Group, a lobbying shop run by ex-GOP Rep. Mike Conaway of Texas and his former chief of staff Scott Graves, also stopped working for FTX last week as the company neared its bankruptcy announcement.

“Our relationship with FTX was terminated early last week and we will not be representing FTX in any capacity moving forward,” Graves said in an email.

At least three trade groups are no longer representing FTX. The Chamber of Progress, which lists crypto partners such as and Ripple on its website, is no longer working with FTX, according to a person briefed on the matter.

The Association for Digital Asset Markets, a crypto advocacy group run by industry advocate Michelle Bond, has removed all notable traces of FTX from its website. Bond, who is reportedly close with Salame, ran a failed Republican primary campaign for a New York House seat.

It was announced in February that FTX and FTX US were joining the group’s board of directors. An archived version of the group’s website shows Ryne Miller, FTX US’ general counsel, and Mark Wetjen, the company’s head of policy and regulatory strategy, were once listed among the trade group’s board members.

Wetjen was a Commodity Futures Trading Commission commissioner under former President Barack Obama. A spokesman for the crypto trade group told CNBC that “on Thursday, ADAM removed and FTX.US from its membership.” The group added that “the removal stemmed from the recently discovered fraudulent behavior by FTX.”

Coindesk reported that FTX resigned from the Crypto Council for Innovation, a separate crypto industry trade group.

The health nonprofit partially bankrolled by Bankman-Fried and run by his brother has also lost some ties to Washington.

Guarding Against Pandemics, a 501(c)(4) that advocates for public investments to prevent the next Covid-19 pandemic, lost the Ridge Policy Group as one of its lobbyists, the firm told CNBC. The lobbying group is led by former Secretary of Homeland Security Tom Ridge.

“Ridge Policy Group no longer represents Guarding Against Pandemics,” Pamela Curtis Sherman, the firm’s chief administrative officer, told CNBC in an email. Sherman did not say when that decision was made or why the two severed ties.

But the announcement comes after the nonprofit appeared to distance itself from Bankman-Fried and his brother.

As of Monday afternoon, Guarding Against Pandemics had wiped its website’s “about” section. The internet archive Wayback Machine shows that the “about” section once noted Bankman-Fried as a donor and listed Gabe Bankman-Fried as a founder and director. The nonprofit did not respond to repeated requests for comment.

Even before FTX crashed, the nonprofit lost another lobbying firm, Ogilvy Government Relations. Gordon Taylor, a principal at that firm, told CNBC in a brief interview that its contract with Guarding Against Pandemics ended in late October and was not renewed.

It is unclear why the firm did not renew the contract.

— CNBC’s Mary Catherine Wellons contributed to this report.


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Two children and two adults survive after Tesla plunges 250 feet off California cliff

View from the helicopter during a rescue operation after a vehicle carrying two adults and two children went over a cliff in Devil’s Slide, San Mateo county, California, U.S., January 2, 2023, plunging hundreds of feet, according to the Department of Forestry and Fire Protection, in this still image obtained from social media video.

CHP – Golden Gate Division | Reuters

Two adults and two children were rescued from a Tesla that plunged 250 feet off a cliff Monday morning in San Mateo County, California, officials said. 

The car was traveling southbound on the Pacific Coast Highway when it went over the cliff at Devil’s Slide, south of the Tom Lantos tunnel, and landed near the water’s edge below, the Cal Fire San Mateo-Santa Cruz Unit said. 

The car flipped and landed on its wheels in the fall, CAL FIRE/Coastside Fire Incident Commander Brian Pottenger said. Witnesses saw the accident and called 911. 

As crews were lowered down, they were able to see movement in the front seat, through their binoculars, meaning someone was alive.

“We were actually very shocked when we found survivable victims in the vehicle. So, that actually was a really hopeful moment for us,” Pottenger said. 

Fire officials called for helicopters to help hoist the survivors to safety. As they waited, firefighters rappelled to the scene and rescued the two children.

Rescue teams are seen at the scene as a Tesla with four occupants plunged over a cliff on Pacific Coast Highway 1 at Devils Slide on January 2, 2022 in San Mateo County, California, United States.

Tayfun Coskun | Anadolu Agency | Getty Images

The California Highway Patrol shared video on social media showing helicopters lower first responders to the scene to extricate and rescue two adults inside. 

All four were hospitalized. The San Mateo Sheriff’s Office said the two adults suffered non-life-threatening injuries and the two children were unharmed.

It’s not clear what caused the car to go over the cliff. CHP is handling the investigation. 

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Tesla shares tumble more than 10% following deliveries report

Tesla vehicles are shown at a sales and service center in Vista, California, June 3, 2022.

Mike Blake | Reuters

Shares of Tesla dropped 13% on Tuesday morning, a day after the electric auto maker reported fourth-quarter vehicle production and delivery numbers for 2022.

Deliveries are the closest approximation of sales disclosed by Tesla. The company reported 405,278 total deliveries for the quarter and 1.31 million total deliveries for the year. These numbers represented a record for the Elon Musk-led automaker and growth of 40% in deliveries year over year, but they fell shy of analysts’ expectations.

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According to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022, Wall Street was expecting Tesla to report around 427,000 deliveries for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.

Those more recent estimates were in line with a company-compiled consensus distributed by Tesla investor relations Vice President Martin Viecha. 

Some Wall Street analysts think Tesla’s deliveries miss spells trouble for the electric vehicle maker, but others see a buying opportunity for the company in 2023.

Baird analyst Ben Kallo, who recently named Tesla a top pick for 2023, maintained an outperform rating and said he would remain a buyer of the stock ahead of the company’s earnings report, which is scheduled for Jan. 25.

“Q4 deliveries missed consensus but beat our estimates,” he said in a Tuesday note. “Importantly, production increased ~20% q/q which we expect to continue into 2023 as gigafactories in Berlin and Austin continue to ramp.”

Analysts at Goldman Sachs said they consider the delivery report to be an “incremental negative,” and view Tesla as a company that is “well positioned for long-term growth.” Goldman reiterated its buy rating on the stock in a Monday note and said that making vehicles more affordable in a challenging macroeconomic environment will be a “key driver of growth.”

“We believe key debates from here will be on whether vehicle deliveries can reaccelerate, margins and Tesla’s brand,” the analysts said.

Shares of Tesla suffered an extreme yearlong sell-off in 2022, prompting CEO Musk to tell employees in late December not to be “too bothered by stock market craziness.”

Musk has blamed Tesla’s declining share price in part on rising interest rates. But critics point to his rocky $44 billion Twitter takeover as a bigger culprit for the slide.

Morgan Stanley analysts said they think the company’s share price weakness is a “window of opportunity to buy.”

“Between a worsening macro backdrop, record high unaffordability, and increasing competition, there are hurdles for all auto companies to overcome in the year ahead,” they said in a note Tuesday. “However, within this backdrop we believe TSLA has the potential to widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition.”

CNBC’s Lora Kolodny and Michael Bloom contributed to this report.

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Tesla makes China boss Tom Zhu its highest-profile executive after Elon Musk

Tom Zhu Xiaotong, Tesla’s current executive in charge of China, speaks as a new Tesla experience store opens on Aug. 18, 2015 in Hangzhou, China.

Visual China Group | Getty Images

Tesla’s China chief Tom Zhu has been promoted to take direct oversight of the electric carmaker’s U.S. assembly plants as well as sales operations in North America and Europe, according to an internal posting of reporting lines reviewed by Reuters.

The Tesla posting showed that Zhu’s title of vice president for Greater China had not changed and that he also retained his responsibilities as Tesla’s most senior executive for sales in the rest of Asia as of Tuesday.

The move makes Zhu the highest-profile executive at Tesla after Chief Executive Elon Musk, with direct oversight for deliveries in all of its major markets and operations of its key production hubs.

The reporting lines for Zhu would keep Tesla’s vehicle design and development — both areas where Musk has been heavily involved — separate while creating an apparent deputy to Musk on the more near-term challenges of managing global sales and output.

Tesla did not immediately respond to a Reuters request for comment.

Reuters reviewed the organizational chart that had been posted internally by Tesla and confirmed the change with two people who had seen it. They asked not to be named because they were not authorized to discuss the matter.

Elon Musk needs to go back to Tesla and have others run Twitter, says Jim Cramer

Zhu and a team of his reports were brought in by Tesla late last year to troubleshoot production issues in the United States, driving an expectation among his colleagues then that he was being groomed for a bigger role.

Zhu’s appointment to a global role comes at a time when Musk has been distracted by his acquisition of Twitter and Tesla analysts and investors have urged action that would deepen the senior executive bench and allow him to focus on Tesla.

Under Zhu, Tesla’s Shanghai plant rebounded strongly from Covid lockdowns in China.

Tesla said on Monday that it had delivered 405,278 vehicles in the fourth quarter, short of Wall Street estimates, according to data compiled by Refinitiv.

The company had delivered 308,600 vehicles in the same period a year earlier.

The Tesla managers reporting to Zhu include: Jason Shawhan, director of manufacturing at the Gigafactory in Texas; Hrushikesh Sagar, senior director of manufacturing at Tesla’s Fremont factory; Joe Ward, vice president in charge of Europe, the Middle East and Africa; and Troy Jones, vice president of North America sales and service, according to the Tesla notice on reporting lines reviewed by Reuters.

Tesla country managers in China, Japan, Australia and New Zealand continued to report to Zhu, the notice showed.

Zhu does not have a direct report at Tesla’s still-ramping Berlin plant, but a person with knowledge of the matter said responsibility for that operation would come with the reporting line for Amsterdam-based Ward. Ward could not be immediately reached for comment.

Zhu, who was born in China but now holds a New Zealand passport, joined Tesla in 2014. Before that he was a project manager at a company established by his MBA classmates at Duke University, advising Chinese contractors working on infrastructure projects in Africa.

During Shanghai’s two-month Covid lockdown, Zhu was among the first batch of employees sleeping in the factory as they sought to keep it running, people who work with him have said.

Zhu, a no-fuss manager who sports a buzz cut, favors Tesla-branded fleece jackets and has lived in a government-subsidized apartment that is a 10-minute drive from the Shanghai Gigafactory. It was not immediately clear whether he would move after his promotion.

He takes charge of Tesla’s main production hubs at a time when the company is readying the launch of Cybertruck and a revamped version of its Model 3 sedan. Tesla has also said it is developing a cheaper electric vehicle but has not provided details on that plan.

When Tesla posted a picture on Twitter last month to celebrate its Austin, Texas, plant hitting a production milestone for its Model Y, Zhu was among hundreds of workers smiling on the factory floor.

Why China is beating the U.S. in electric vehicles

Allan Wang, who was promoted to vice president in charge of sales in China in July, was listed as the legal representative for the operation in registration papers filed with Chinese regulators in a change by the company last month.

Tesla board member James Murdoch said in November the company had recently identified a potential successor to Musk without naming the person. Murdoch did not respond to a request for comment.

Electrek previously reported that Zhu would take responsibility for U.S. sales, delivery and service.

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