David Sacks, who was appointed to be artificial intelligence and cryptocurrency czar by former President Donald Trump, now finds himself on the hot seat. Critics are accusing him of having a conflict of interest in his new role. His government role raises questions about his extensive investments in the tech sector, prompting scrutiny from various public figures and watchdogs.
While some experts have expressed fears at Sacks’ appointment over his past financial interests, particularly in the areas of cryptocurrency and artificial intelligence. His position raises a critical question: can he effectively guide national policy while holding significant investments in sectors he oversees? Each of these issues has resulted in investigations and claims of wrongdoing.
When faced with these clear conflicts, Sacks obtained two ethics waivers from the White House. These waivers forced him to divest the majority of his AI and crypto holdings. According to his spokesperson, Jessica Hoffman, Sacks has been following the guidelines set out for special government employees. Finally, she testified that he “did everything by the book.” Ironically, though, his government service has proved quite costly to him.
According to 2010 OGE guidance, the Office of Government Ethics exercised considerable discretion over which investments Sacks would have to sell. Even with these safeguards in place, critics counter that Sacks’ financial interests are still an issue. Senator Elizabeth Warren articulated these concerns succinctly, stating, “David Sacks simultaneously leads a firm invested in crypto while guiding the nation’s crypto policy,” labeling it an “explicit conflict of interest” that would typically fall under federal prohibitions.
Additionally, Sacks’s alleged misconduct includes misclassification of hundreds of investments. He continued to categorize them as hardware or software, despite the fact that the firms self-defined as AI companies. Over the course of a five-month investigation into these allegations, Sacks claimed these accusations had been “debunked in detail.”
“Today they evidently just threw up their hands and published this nothing burger,” – David Sacks
Steve Bannon, a former advisor to Trump, commented on Sacks’ situation, describing him as “emblematic of an administration where the tech bros are out of control.” This angst is part of a larger anxiety about the line between private sector influence and public duty.
Sacks hosted an event called All-In, where potential sponsors could pay $1 million for access to exclusive receptions and events. The Clare Locke law firm, representing Sacks, noted that “two sponsors were brought on to help partially defray the cost of the event, for which they received nothing but logo placements.” They further clarified that “no access to President Trump was ever offered, and no VIP reception ever took place.”
Kathleen Clark, a law professor at Washington University, took a look at the ethics waiver Sacks was granted. In a statement at the time, she said she disagreed with the ruling. She went on to characterize the situation as “graft,” suggesting that Sacks’ financial transactions fall well outside the pale of acceptable governance.
Jessica Hoffman followed up with a statement that David Sacks has done nothing wrong, which is odd given the extreme scrutiny under which he now serves. She argued that the monetary benefits have actually harmed him as opposed to help him.
“Anyone who reads the story carefully can see that they strung together a bunch of anecdotes that don’t support the headline.” – David Sacks
Debates over conflicts of interest are always already shifting. Sacks’ case will likely set at least one of several important precedents at the crossroads of technology, significant investment, and public service. His high-profile position makes him a lightning rod for scandal and political maneuvering from all sides. This spurs vital inquiries into the ethics of our government.
