Steve Stockman, Bitcoin Player
The Senate hopeful raises dough the Bitcoin way.
When the pseudonymous entity Satoshi Nakamoto launched Bitcoin in 2009, he (or she, or they) succeeded in creating a digital currency that would operate in the dark. Bitcoin users can choose to remain anonymous, which makes it ideal for certain shady enterprises—like the one pioneered by Austin’s own Ross Ulbricht, who allegedly ran Silk Road, an online drug market, until he was arrested in October. But that anonymity makes Bitcoin problematic in a system where the opposite of anonymity is needed—for example, campaign finance.
Cue Steve Stockman, the U.S. representative from Texas’s Thirty-sixth Congressional District. Stockman has never shied away from bucking the establishment, whether he’s lambasting opponents on his radioactive Twitter feed (“If Obama gets any more bitter they’ll bottle his sweat as tonic water”) or pushing his party’s social agenda to the limit on a bumper sticker (“If babies had guns they wouldn’t be aborted”). In December, though, he managed to surprise everyone by announcing that he would run against incumbent John Cornyn for the Republican Senate nomination.
Soon after, he continued to surprise by announcing that his campaign committee—which he created on December 30—would accept Bitcoin contributions, making him the highest-profile American politician to do so. This move, says Jim Henson, the director of the University of Texas’s Texas Politics project, is a play to garner free publicity and gin up support among the “narrow but intense slice of the electorate that sees Bitcoin as a meaningful blow to established institutions.”
Stockman’s interest in Bitcoin comes at a time when the Federal Election Commission, which has never figured out what to do with Steve Stockman (he’s been a near-constant subject of FEC attention since he first ran for public office, in 1989), is trying to figure out what to do with Bitcoin. The major problem is that campaigns are required to disclose the names of donors and Bitcoin transactions don’t include the payer’s identity unless it’s offered voluntarily—and even then, it could be difficult to verify.
Financial opacity has long appealed to Stockman, who was fined $40,000 by the FEC in 1998 for tactics so novel the agency sometimes refers to them for precedent. Most recently, he fired two close aides who illegally routed campaign donations through relatives. (Stockman’s campaign did not return requests for comment.)
“Other than maybe the mob, no one knows more about laundering money than politicians,” says former Missouri state senator Jeff Smith, who was imprisoned in 2009 for charges relating to election law violations and now teaches politics and public policy at New York City’s New School. “I absolutely think this will be the start of a trend,” he says of Stockman’s solicitation of Bitcoin donations.
The trend, though, may not catch on quickly enough to help Stockman defeat Cornyn. As of January 6, Stockman’s two Bitcoin accounts had garnered only 0.558 bitcoins, worth a little more than $500. Cornyn’s campaign, as of September, had nearly $7 million of old-fashioned currency on hand.