(Ken Silva, Headline USA) In a Thursday Substack article that sent shockwaves through the financial world, alleged crypto fraudster Sam Bankman-Fried levied claims of wrongdoing against FTX’s bankruptcy counsel, Sullivan & Cromwell—a firm historians say helped create the modern deep state.
SBF’s Substack article—in which he proclaimed his innocence—comes on the heels of an FTX creditor objecting to S&C being appointed to guide FTX through bankruptcy proceedings. In a court filing last week, the creditor claimed that FTX did “extensive corporate and regulatory legal work for the FTX Group before its collapse”—criticizing the notion that the same law firm that contributed to FTX’s collapsed is now being paid to clean it up.
“Now, in the most flagrant attempt by a fox to guard a henhouse in recent memory, Sullivan & Cromwell has applied to be appointed the FTX Group’s bankruptcy counsel with duties that would include ‘investigating all potential estate causes of action,’” the creditor said last week.
In response, S&C reportedly said last week that its pre-collapse relationship with FTX was limited, and that it never served as primary outside counsel to any FTX entity.
But in his Thursday substack post, SBF directly contradicted S&C’s claims.
“S&C was one of FTX International’s two primary law firms prior to bankruptcy, and were FTX U.S.’s primary law firm. FTX US’ [general counsel] came from S&C, they worked with FTX U.S. in its most important regulatory application, they worked with FTX International on some of its most important regulatory concerns, and they worked with FTX US on its most important transaction,” Bankman-Fried claimed.
“When I would visit NYC, I would sometimes work out of S&C’s office.”
SBF further claimed that S&C and its general counsel were the primary parties “strong-arming and threatening me into naming the candidate they themselves chose as CEO of FTX.”
S&C has declined to comment on the matter.
In contradicting Sullivan & Cromwell, Bankman-Fried has pitted himself against a law firm credited with helping create what’s now commonly referred to as the deep state, which author David Talbot defined as “the subterranean network of financial, intelligence, and military interests that guided national policy no matter who occupied the White House” in his book on the subject, to The Devil’s Chessboard: Allen Dulles, the CIA, and the Rise of America’s Secret Government.
S&C was one of the first players in the American deep state, according to Talbot and others.
Founded in 1879 by Algernon Sydney Sullivan and William Nelson Cromwell, S&C’s early partners included brothers John Foster Dulles and Allen Dulles—the former who served as U.S. Secretary of State in the 1950s, and the latter who directed the CIA and oversaw controversies such as the 1953 Iranian coup d’état, the 1954 Guatemalan coup d’état, the Project MKUltra mind control program and the Bay of Pigs Invasion.
Through the Dulles brothers, S&C is implicated in doing business with German firms connected to the Nazi regime in the 1930s, according to The Devil’s Chessboard. As a U.S. diplomat posted in Switzerland, Allen allegedly continued to work with his brother to help S&C’s Nazi clients during and immediately following World War 2.
“While Allen Dulles was using his OSS post in Switzerland to protect the interests of S&C’s German clients, his brother Foster was doing the same in New York. By playing an intricate corporate shell game, Foster was able to hide the U.S. assets of major German cartels … and protect these subsidiaries from being confiscated by the federal government,” wrote Talbot in The Devil’s Chessboard.
After working with Nazis, S&C—via the Dulles brothers—had a hand in the 1954 Guatemalan coup, Talbot wrote. At the time, S&C represented the United Fruit Company, whose business was being adversely affected by policies of the Guatemala’s democratically elected president, Jacobo Arbenz.
The Dulleses had served as United Fruit’s lawyers from their earliest days at S&C,” Talbot noted. “United Fruit’s cries of alarm about Arbenz’s land reform soon produced [the coup].”
Along with the Dulles brothers, other power brokers to step through S&C’s revolving door include former Supreme Court Chief Justice Harlan Fiske Stone, and more recently tech billionaire Peter Thiel and former Blackrock CEO Mark Wiseman.
S&C has largely stayed out of the limelight in recent decades—until the FTX fiasco—but continues to employ a large number of prominent former government officials, including former SEC chair Jay Clayton and numerous former DOJ attorneys.
Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.