60 Minutes - 10/01/2023: The Attorney General and The Rise and Fall of Sam Bankman-Fried

Episode Date: October 2, 2023

Correspondent Scott Pelley sits down with U.S. Attorney General Merrick Garland in Washington D.C. Pelley speaks with the head of the Justice Department about the indictments of former President Donald Trump, the Hunter Biden probe, and the January 6th indictments. Days before FTX cryptocurrency exchange founder Sam Bankman-Fried is set to go to trial, 60 MINUTES conducts the exclusive first interview with author and financial journalist Michael Lewis who had a front row seat to Bankman-Fried's rise and fall. Correspondent Jon Wertheim speaks with Lewis, ahead of his GOING INFINITE book release, about Bankman-Fried at the height of his empire, the collapse of crypto, and whether the FTX wunderkind believes he's innocent. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

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Limited time only at participating Wendy's Taxes Extra. Attorney General Merrick Garland has said little about the Justice Department prosecutions of Donald Trump and Hunter Biden. Tonight, he tells us about the principles that guide him and how he would deal with political interference. If necessary, I would resign, but there is no sense that anything like that will happen. As a 60 Minutes camera rolled and author Michael Lewis took more notes, former crypto mega-billionaire Sam Bankman-Fried shuffled cards and jackhammered his legs, avoiding eye contact. Today, he's trying to avoid prison. You had so much access to Sam Bankman-Fried writing this book.

What ultimately is the purpose here? I mean, there's going to be this trial, and the lawyers are going to tell two stories. And so there's a story war going on in the courtroom, and I think neither one of those stories is as good as the story I have. I'm Leslie Stahl. I'm Bill Whitaker.

I'm Anderson Cooper. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Scott Pelley. Those stories and more tonight on 60 Minutes. Not since Watergate has an attorney general been at the center of such a firestorm. Merrick Garland's Justice Department is prosecuting both

former President Trump and the son of President Biden. Caught in the middle is this 70-year-old former prosecutor and well-respected judge with a long history as a moderate. We met Garland Friday in Washington. He told us that he devoted his life to the rule of law because of his family's struggle to escape the Holocaust. Now he's responsible for prosecutions that will shape the future of the nation. In a rare interview, the Attorney General told us that in the Trump and Biden trials ahead, his prosecutors will pursue justice without fear and without favor.

We do not have one rule for Republicans and another rule for Democrats. We don't have one rule for foes and another for friends. We don't have one rule for the powerful and another for the powerless, for the rich or for the poor, based on ethnicity. We have only one rule, and that one rule is that we follow the facts and the law, and we reach the decisions required by the Constitution, and we protect civil liberties. Are you essentially saying,

as Attorney General to the American people, trust me? Well, in the end, I suppose it does, in the end, come down to trust. But it's not just me. It's decades of the norms of this department that are part of the DNA of the career prosecutors who are running the investigation and supervising the investigations that you're talking about. Former President Trump faces two federal trials, one for allegedly hoarding classified documents and covering it up, the other for allegedly conspiring to seize power after the 2020 election. Attorney General Garland has said little about this, and we wanted to understand why. Well, I think the first thing to understand is because these are pending cases, because there

are two federal indictments, the long-standing rule in the Justice Department is that we can't comment about pending cases. Where does that rule come from? What's the point? One reason is to protect the privacy and civil liberties of the person who's under investigation. It's to protect witnesses who also may or may not become public later in an investigation. And then finally, it's to protect the investigation itself.

Investigations proceed in many different directions, eventually coming to fruition, a decision to charge or not charge about a particular thing or not. And if witnesses and potential subjects knew everything that the investigators had previously looked at and were about to look at, it could well change testimony. It could well make witnesses unavailable to us. And this is not peculiar to the Trump investigations? This is a rule for all investigations.

This is part of what we call our justice manual. It's been there for probably at least 30 years and probably longer than that. Help us understand the timing. These prosecutions of the former president are happening during the campaign. You could make the argument that it's the worst possible time. The Justice Department has general practices about not making significant overt steps or charging within a month or so of an election. We are clearly outside that time frame in these cases. Prosecutors, special counsel,

they follow the facts and the law where they lead. When they've gotten the amount of evidence necessary to make a charging decision and have decided that a charge is warranted, that's when they bring their cases. The investigation itself has determined the timing. Yes, exactly right. Your critics say that it's time to ruin Mr. Trump's chances in the election. Well, that's absolutely not true. Justice Department prosecutors are nonpartisan.

They don't allow partisan considerations to play any role in their determinations. The prosecutor in the Trump cases is Jack Smith. He was named by Garland to be special counsel. That's a job under the regulations of the Justice Department designed to give Smith broad independence from the department and from the White House. The most important aspect of the regulations is that the special counsel is not subject to the day-to-day supervision of anyone in the Justice Department. You are not in communication with the president or any member of his administration with regard to the investigation of former President Trump? No, I am not.

If President Biden asked you to take action with regard to the Trump investigation, what would your reaction be? I am sure that that will not happen, but I would not do anything in that regard. And if necessary, I would resign. But there is no sense that anything like that will happen. Have you ever had to tell him hands off these investigations, Mr. President?

No, because he has never tried to put hands on these investigations. Separately, President Biden himself is the subject of a special counsel investigation into whether he improperly held classified documents after he was vice president. His son, Hunter Biden, is the target of a four-year investigation into his business deals and his taxes. He's been indicted for lying about drug abuse when he bought a gun. Republicans accuse special counsel David Weiss of slow-walking the Hunter Biden investigation. The allegation is, Mr. Attorney General, that what is described in some quarters as the Biden Justice Department is taking it easy on the president's son? Well, look, this investigation began under David Weiss. David Weiss is a longstanding career prosecutor, and he was appointed by Mr. Trump as the United States Attorney for the District of Delaware.

I promised at my nomination hearing that I would continue him on in that position and that I would not interfere with this investigation. You are not participating in those decisions? No, Mr. Weiss is making those decisions. The White House is not attempting to influence those decisions? Absolutely not. And he said we won't have to take his word for it. Under Justice Department regulations, a special counsel must write a final report.

Which I will make public to the extent permissible under the law. That is required to explain their prosecutive decisions, their decisions to prosecute or not prosecute, and their strategic decisions along the way. Usually the special counsels have testified at the end of their reports, and I expect that that will be the case here. How's your relationship with the president? It must be frosty. I have a good working relationship with the president.

Good, perhaps, but maybe not close. The president addressed the question in August when he spotted Garland at a White House event. Attorney General Garland, haven't seen you in a long while. Good to see you. Secretary of Homeland, you think I'm kidding. I'm not. All right. Attorney General Garland leads 115,000 employees, prosecutors, agents of the FBI, and other federal law enforcement.

Additional security is now assigned to protect judges and prosecutors after the Trump cases drew death threats. Political violence is among Garland's gravest concerns. People can argue with each other as much as they want and as vociferously as they want. But the one thing they may not do is use violence and threats of violence to alter the outcome. An important aspect of this is the American people themselves. The American people must protect each other. They must ensure that they treat each other with civility and kindness, listen to opposing

views, argue as vociferously as they want, but refrain from violence and threats of violence. That's the only way this democracy will survive. Why do you feel so strongly about that? Well, I feel it for a number of reasons and a number of things that I've seen. But for my own family who fled religious persecution in Europe and some members who did not survive when they got to the united states the united states protected

it guaranteed that they could practice their religion that they could vote they could do all the things they thought a democracy would provide. That's the difference between this country and many other countries. And it's my responsibility, it's the Justice Department's responsibility to ensure that that difference continues, that we protect each other. Two of your ancestors were murdered in the Holocaust. Yes. of your ancestors were murdered in the Holocaust? Yes. Is that why you devoted yourself to the law? Yes, I would say that's why I devoted myself

to the rule of law, to public service, to trying to ensure that the rule of law governs this country and continues to govern this country. Merrick Garland has spent a life in the law. M-E-R-R-I-C-K G-A-R-L-A-N-D. He's the associate deputy attorney general. At Justice, he oversaw the Oklahoma City bombing case, an act of political terrorism. Later, after nearly two decades as a federal appeals court judge, he was nominated to the U.S. Supreme Court by President Obama. But Republicans stalled the nomination for 10 months

until Donald Trump was sworn in. President-elect Biden picked Garland for attorney general on the same day the Capitol was attacked. That became one of the largest investigations in the department's history. We've arrested and brought charges against more than 1,100 people. There are more to come. The videos that every single person happened to have on their phones, that security cameras had, that bystanders had, that the media had at the time, disclosed faces, some of which we have not yet been able to connect to people. You're looking for new suspects, new defendants, still? Yeah, that's not that they're new suspects, but they are people that we haven't found yet. Why do these prosecutions mean so much to you?

Because this is a fundamental aspect of our democracy. If we can't ensure that this kind of behavior doesn't recur, it will occur. The prosecutions we bring are deterrence against that from happening. Garland knows he will be vilified no matter how the Trump and Biden cases are decided. His job, he told us, was to take the arrows for the department. He has learned to embrace the pain that comes with the job. The youngest right now is Riot Mitchell, forever eight months old. And we saw that at DEA headquarters where he was surrounded by those lost to the opioid epidemic and their grieving

families. Meeting them, he told us, reminds him of why he fights and whom he is fighting for. Thank you for being here and listening to us. I represent the American people. I don't represent the president. I represent the American people. And likewise, I am not Congress's prosecutor. I work for the American people. And if democracy is an emotional subject for Merrick Garland, maybe it's because he has witnessed how suddenly it can be threatened in Oklahoma City and Washington, D.C. When the history of this extraordinary time is written, what is the best that Merrick Garland can hope for? Look, I think it's the best any public servant can hope for, that we've done our best,

that we pass on a Justice Department that continues to pursue the rule of law and protect it. And it's the same thing that every generation has to hope, that we can pass our democracy on in working order to the next generation that picks up the torch and is responsible when we're finished to continue that job. Your adventurous side rocks out with the dynamic sound Yamaha. Regular U owns a library card. Adventurous U owns the road with super all-wheel control. Regular side, alone time. Adventurous side journeys together with third row seating.

The new Outlander. Bring out your adventurous side. Mitsubishi Motors. Drive your ambition. Sometimes historic events suck. But what shouldn't suck is learning about history. I do that through storytelling. History That Doesn't Suck is a chart-topping history-telling podcast

chronicling the epic story of America, decade by decade. Right now, I'm digging into the history of incredible infrastructure projects of the 1930s, including the Hoover Dam, the Empire State Building, the Golden Gate Bridge, and more. The promise is in the title, History That Doesn't Suck, available on the free Odyssey app or wherever you get your podcasts. Michael Lewis has made a literary career finding jump-off-the-page characters and using them to help tell complicated stories. And what could be more complicated than explaining cryptocurrency? Lewis gained all hours' access to Sam Bankman Freed,

known for a time as the J.P. Morgan of crypto. His sector, as ungoverned as his hair, Bankman Freed was worth more than $20 billion before he turned 30. An unlikely celebrity, his life braided finance, politics, sports, and pop culture. Then the empire crumbled, and today Bankman Freed sits in jail on various federal charges and faces potential sentences of more than 100 years. Lewis, though, didn't panic sell. He simply went where the story took him.

His latest book, Going Infinite, comes out Tuesday, which is also the opening day in the trial of Sam Bankman Freed. You had so much access to Sam Bankman Freed writing this book. What ultimately is the purpose here? I realized I had an ambition for the book. I saw it as a kind of letter to the jury. I mean, there's going to be this trial, and the lawyers are going to tell two stories. And so there's a story war going on in

the courtroom, and I think neither one of those stories is as good as the story I have. Michael Lewis didn't set out to write this book. Two autumns ago, he was at home in the Bay Area when he got a call from a friend interested in investing with a young billionaire. Could Lewis meet with this wunderkind and size him up? So it was Lewis brought Sam Bankman-Fried here in the Berkeley Hills for a hike in the park. You got to remember, I knew nothing about him. All I knew was I was supposed to evaluate his character. And that 18 months earlier, he had nothing. Now he had $22.5 billion and was the richest person in the world under 30. He didn't care much about like spending it on yachts. He was going to spend it to save humanity from extinction kind of thing.

So the whole walk was like, my jaw was on the floor by here after I heard all that. As an author whose stock and trade is finding interesting characters, is your story meter starting to beep about now? I was on red alert. And I said this to him. I said, I don't know what's going to happen to you. Something's going to happen to you. Can I just come and, you know, ride shotgun? Now, riding shotgun ended up being like hanging on for dear life to, you know, an automobile that's going 270 miles an hour and taking every hairpin turn.

My instinct was we should very slowly be trickling out these positions. Sam Bankman-Fried and Lewis would end up meeting more than a hundred times over two years, speaking for countless hours. As our camera rolled in July, note how Bankman-Fried shuffled cards and jackhammered his legs and avoided eye contact. Lewis considers Bankman-Fried the most challenging and fascinating character he's ever encountered. This from an author who's been writing nonfiction since the 80s. I want to talk about that guy.

The story of Sam's life is people not understanding him, misreading him. He's so different. He's so unusual. I mean, I think in a funny way that the reason I have such a compelling story is I have a character that I do come to know, and that the reader comes to know, that the world still doesn't know. Sorry, some Japanese yen. A graduate of MIT, Bankman Freed saw the world in numbers, framing everything in his life as a probability exercise, including philanthropy. He committed to making as much money as possible,

so he could give it away as efficiently as possible, guided by a social movement, effective altruism. What it means in Sam's instance is you can go out and have a career where you do good. You can go be a doctor in Africa. Or you can go out and make as much money as possible and pay people to be doctors in Africa. If you're a doctor in Africa, you end up saving a certain number of lives, but you're only one doctor. But if you can pay 40 people to become doctors in Africa, you're going to save 40 times the number of lives.

This is like a strategy game. Well, you don't understand Sam Bankman-Fried unless you understand that he turns everything into a game. Everything is gamified. Bankman-Fried worked as a Wall Street trader before moving to Berkeley at age 25 to start his own trading firm, Alameda Research. Instead of buying and selling stocks or bonds, he would traffic in crypto, a digital form of currency not tied to a centralized system. The basic idea was to be the smartest person in the crypto markets, to be the one who did the kind of trading in crypto that the smartest Wall Street traders did in stocks.

MIKE GREEN So these quant skills he had as a trader on regular stocks and equities markets, he was going to bring to this new ascending crypto world? DAVID ROSENBERG Correct. MIKE GREEN What's the difference between crypto finance and traditional finance? DAVID ROSENBERG Well, the promise of crypto finance is the promise of an absence of intermediaries. If I want to wire you $10,000, a bank has to do it. A bank records the transaction. A bank takes some little slice of it.

If I want to wire you $10,000 worth of Bitcoin, I can just hit a button and you get it. So you remove the institutions. Coming out of the 2008 financial crisis, crypto took hold as an anti-establishment, punk rock version of a financial system, which Lewis finds ironic. In the beginning especially, it's a crowd of people who are incredibly mistrustful of institutions. What attracts them to it is they hate the government, they hate banks. But then they somehow, this pool of incredibly mistrustful people, proceed to trust each other in ways that I wouldn't trust you.

They're parking their money in a sector that's unregulated. There are no physical properties. Provably squirrely and unreliable. Over and over. But it's predicated on trust. They are Charlie Brown kicking the football. They're sure that this time Lucy's going to hold it. Still, Bankman-Fried made a fortune at Alameda Research. And then he really got rich. Instead of simply trading, Bankman-Fried seized on the idea of opening his own cryptocurrency exchange. One of the things he notices is that all the crypto exchanges are screwed up in one way or another. There are dozens of these places where you can trade crypto, but they are not

structured for a professional trader. The technology is bad. They'll lose their customers' money. It's the Wild West. He realizes that if you built a better exchange, he wanted to build an exchange he could trade on. So he creates FTX. And once he created it, it went boom. And when it went boom, he realized that, well, that's the gold mine. It actually isn't trading the crypto. This is owning the casino, right? It's owning the casino. He started as a gambler, and he realized that, you know, building the better casino was actually going to be more valuable.

FTX has seen explosive growth. Soon, roughly $15 billion a day in trades were executed on his new exchange, FTX. If you're sitting in the middle of those transactions and you're taking out even a tiny fraction of a percentage point, there's a lot of money to be made. Indifferent to the outcome of the trade. You're taking no risk. You're taking no risk at all. It didn't matter to him whether crypto went up or crypto went down. As long as people are trading crypto, it made money. It's the best business. I had one venture capitalist tell me that several of the venture capitalists thought that Sam might be the world's first trillionaire. Trillionaire?

Yeah, they're looking for the next Google. They're looking for the next Apple. They thought FTX had that kind of possibility, that it had a chance to be the single most important financial institution in the world. As he began accumulating billions as if they were Pokemon cards, Bankman Freed began attracting something else he wasn't accustomed to. There's a lot of leverage in cryptocurrency markets. Attention. He changed not at all. You know, he'd never been on TV.

He goes on TV in his cargo shorts and his messy hair, and he's playing video games while he's on the air. Wait, wait. He's playing video games on the air? You would think your first television appearance, you might be a little uptight, a little nervous. And if you watch the clip, you can see his eyes going back and forth and back and forth. This is because he's trying to win his video game at the same time he's on the air. Whether it was his smarts, his fierce indifference to appearance, or simply his vast wealth, the beautiful people suddenly found him irresistible. As his net worth goes up, so

does his social capital. You write about a Zoom meeting you walked in on. He says, I got to go do a Zoom. I said, what is it? And he says, there's this person named Anna Wintour. And he didn't know who she was. He had no idea who she was. No. So I sat off to one side where she couldn't see me.

And I watched this Zoom. Now, your thing, what does Anna Wintour want to do with a schlub like Sam? Exactly. He is the worst dressed person in America. He is the worst-dressed person in America. He is the worst-dressed billionaire in the history of billionaires. What she wants him to do is to sponsor the Met Gala, her great ball that she throws every year, which is all about dress and appearances. Sam was a social experiment. He is a person who has nothing, all of a sudden has seemingly infinite

dollars, will give it away, is unbelievably open-handed about it, and doesn't ask a whole lot of questions. What that attracts, who shows up when this person exists? Everybody. Everyone comes to the trough. Everybody comes to the trough. Everybody wants to be his best friend. FTX is the safest and easiest way to buy and sell crypto. Bankman Freed wanted it known that FTX was the go-to player in crypto. Hey, it's Shaquille O'Neal and I'm excited to be partnering with FTX. He turned to the sports world to bring his exchange both legitimacy and edge.

Lewis saw the FTX internal marketing documents. He paid Tom Brady $55 million for 20 hours a year for three years. He paid Steph Curry $35 million for the same thing for three years. Pretty good hourly wage. He spent $100 and something million buying the naming rights for the Miami Heat Arena. I don't think so. He spent $25 million making a Super Bowl ad with Larry David. It's FTX?

I don't think so. For which he then paid Larry David another $10 million. You know, it's breathtaking what's on that list. Did any of the people surrounding him, these celebrities, do it because they found him interesting? Or was it all because he's worth $20-some billion? It's probably not fair for Meek to speak for them, but I will speak for them.

Tom Brady, I think, adored him. I think Tom Brady thought he was just a really interesting person. I think he liked to hear what he had to say. What's up, guys? I'm here with my boy Sam from FTX. And he really liked Tom Brady thought he was just a really interesting person. I think he liked to hear what he had to say. What's up, guys? I'm here with my boy Sam from FTX. And he really liked Tom Brady. And Sam wasn't like a big sports person. So it was funny to watch that interaction. It was like, these two people actually get along.

It's like the class nerd and the quarterback. The two high school tribes. The nerd of all nerds. Like, even the nerds don't hang out with this nerd. He's such a nerd. The quarterback somehow likes him.. Like, even the nerds don't hang out with this nerd. He's such a nerd. The quarterback somehow likes him. And he somehow likes the quarterback. Lewis writes in his book that Bankman-Fried's philanthropic ambitions kept pace with his wealth.

Never mind doctors in Africa, he set out to confront what he saw as existential threats to all of humanity. So Sam Bankman-Fried ends up with a portfolio heavily concentrated in two things. Pandemic prevention, because there really are things the government should be doing. And the other thing that made his list that was so interesting was Donald Trump. He took the view that all the big existential problems are going to require the United States government to be involved to solve them. And if the democracy is undermined, like we don't have our democracy anymore, all these problems are less likely to be solved.

And he saw Trump trying to undermine the democracy, and he thought Trump belongs on the list of existential risks. To that end, Lewis writes that in 2022, Bankman Freed met with the most unlikely of allies, Republican Senate Minority Leader Mitch McConnell. You're flying with Sam and he tells you about a meeting he's going to have with Mitch McConnell. Well, the interesting thing starts before we even get on the plane. I meet him at the airport and he comes tumbling out of a car and he's in his cargo shorts and his T-shirt. And he's got a ball up in his hand. It takes me a while to see what it is, but it's a blue suit.

It's got more wrinkles than any blue suit ever had. It's like it's been, it been just jammed in this little ball. And a shoe, like, falls out of the pile that he's got in his arms. And I said, like, why do you have the suit? He says, Mitch McConnell really cares what you wear when you meet with him. And he's having dinner in six hours with Mitch McConnell. And I said, well, you got the suit. You got a belt?

He goes, no, I don't have a belt. I said, you got a belt? He goes, no, I don't have a belt. I said, you got, you have a shirt? He goes, no, no shirt. And the suit, you really can't really wear that suit. And he goes, yeah, but they told me to bring a suit. According to Lewis, Bankman Freed wanted to help McConnell fund Republican candidates at odds with Donald Trump. What is the subtext of this dinner is Sam is going to write tens of millions of dollars of checks to a super PAC that Mitch McConnell is then going to use to get elected people who are not hostile to democracy. Wait, so Mitch McConnell has a list

of Republican candidates who are sort of on the playing field for democracy versus what he deemed outside. He and his people had done the work to distinguish between actual deep Trumpers and people who were just seeming to approve of Donald Trump, but were actually willing to govern. Bankman-Fried ended up giving multi-millions in support of Republican candidates. Back in 2020, Bankman-Fried had ranked among Joe Biden's biggest donors. As 2024 approached, he planned on spending more, albeit in the most

unconventional way. One of the most shocking passages in this book, I thought, came with this revelation that Sam had looked into paying Donald Trump not to run. That only shocks you if you don't know Sam. Sam's thinking, we could pay Donald Trump not to run for president. Like, how much would it take? Did he get an answer? So he did get an answer. He was floated. There was a number that was kicking around.

And the number that was kicking around when I was talking to Sam about this was $5 billion. Sam was not sure that number came directly from Trump. Wait, wait. So Sam's looking into paying Trump not to run. And he actually didn't mean to come from Trump himself, but he actually got a price? He got one answer, yes. The question Sam had was not just is $5 billion enough to pay Trump not to run, but was it legal? Well, why didn't this happen? Why didn't he follow through?

Well, they were still having these conversations when FTX blew up. So why didn't it happen? He didn't have $5 billion anymore. Approached for comment by 60 Minutes, neither former President Trump nor Senator McConnell responded. Last November, in a matter of days, mega-billionaire Sam Bankman-Fried lost virtually everything, and he soon faced an onslaught of federal fraud charges. When we return, the fall of Sam Bankman Freed. There are very few things that you can be certain of in life. But you can always be sure the sun will rise each morning.

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And then some. Get your ticket to more with the new BMO VI Porter MasterCard and get up to $2,400 in value in your first 13 months. Terms and conditions apply. Visit bmo.com slash theiporter to learn more. Meteoric as the rise of Sam Bankman Freed was, the fall came faster still. In a span of days, a celebrity multi-billionaire became a pariah. His wealth

largely evaporated as federal prosecutors mounted a case against him. In his new book out this week, Michael Lewis details the crash and leaves it to readers to decide if Sam Bankman Freed was a cryptocurrency conman in cargo shorts or a really smart guy singularly ill-equipped to run and manage a business. By spring of 2022, Sam Bankman-Fried had planted his flag in the Bahamas. He decided to move his high-flying cryptocurrency exchange, FTX, to the islands. Not for the beaches, but for the friendly regulatory climate. With the prime minister on hand, they put shovels in the ground for a new headquarters. Bankman-Fried openly discussed

paying off the country's $9 billion national debt. By this point, Michael Lewis and Bankman-Fried had a dynamic that went beyond author-subject. He started using me as a sounding board. For what? For just, like, decisions he was making. Should I join Elon Musk in buying Twitter? You know, should we do this? Should we do that? What did you tell him?

Mostly my answers were no, no, and no. And he would look at me and say, you're a boring grown-up. And Bankman Freed, now 31, told Lewis, now 62, that anyone older than 45 was useless. But Lewis noted that if ever there were a corporate leader in need of adult input to manage 400 employees, it was Sam Bankman Freed. What kind of a manager was he? Horrible. I mean, even his best friends inside the company said Sam is just not built to manage people. Had Sam managed anything before? His sole experience of leadership was running puzzle hunts for math nerds at high school and actually thought deep down, if you asked him, people shouldn't need to be managed. So he proceeded to act on that and basically didn't manage them. Is there any checks and balances happening in this environment then? Well, what checks and balances would you imagine

there might be in a corporation? Chief financial officer. No, there's no chief financial officer. HR department. No, there was no HR department. Compliance office. Oh, no. No. There was no board of directors.

Or rather, I asked Sam, I said, who's your board of directors? And he said, we don't really have one. I said, what do you mean you don't have one? Everyone has one. He says, there are two other people on something called a board of directors, but it's changed and I don't even know their names. And their job is just to docusign with them. He didn't know the name of the board of directors.

No, he didn't know who was on it. So he's running this like a lemonade stand and he's doing enough volume of business. This could be a public traded company if he wanted to. Oh, if it was a publicly traded company, it'd be a publicly traded company worth $40 billion. No, it was all Sam's world. And there was nobody there to say, like, don't do that. FTX purchased a $30 million executive penthouse in a Bahamas resort, flush with an exclusive marina. It was lost on Sam, who worked feverishly in the office

and slept on a beanbag chair. But there was another reason he avoided the Lux Penthouse. His girlfriend, Caroline Ellison, a former Wall Street trader herself, had kicked him out. Compounding matters, he had put her in charge of running Alameda Research, Bankman Freed's privately held trading firm. So the romance between Sam and Caroline goes sideways. How does that impact what happens to FTX and Alameda Research? Coincidentally, the romance more than goes sideways. How does that impact what happens to FTX and Alameda Research? Coincidentally, the romance more than goes sideways. They have a falling out where they're basically not speaking to each other. She's not speaking to him at precisely the time crypto collapses. Explain why that's a problem. It's a problem because Alameda Research is one of the

traders on FTX. Translation, though Bankman Freed owned the FTX exchange, he was also trading crypto on FTX through his other business, Alameda Research. And he was gambling in his own casino. And it created conflicts of interest. So he owns the casino, but he's still gambling. Yes, he didn't stop gambling. Crypto is destabilized. The value of crypto had been eroding throughout the summer of 2022. Then came a one-two punch, a leak of Alameda's unflattering balance sheet in early November. And days later, Changpeng Zhao, head of a rival exchange, took to Twitter to question FTX's viability. This triggered a classic panic run, digital style, on FTX. How fast was money flowing out of FTX's viability. This triggered a classic panic run, digital style, on FTX. How fast was money flowing out of FTX?

In the run, you know, a billion dollars a day was leaving. A billion dollars a day, this thing's gushing. Yeah, it unravels because the depositors at FTX want their money back, and it's not all there. It wasn't all there in large part because the investors' money intended for FTX had wound up in Bankman Freed's privately held fund, Alameda Research, more than $8 billion. Do you think he knowingly stole customers' money, Sam? Put that way, no. So there's another side of this. In the very beginning, if you were a crypto trader who wanted to trade on FTX and wanted to

send dollars or yen or euros onto the exchange so you could buy crypto, FTX couldn't get bank accounts. So Alameda Research, which could get bank accounts, created bank accounts for people to send money into so that it would go to FTX. But it was held in Alameda Research, Alameda Research bank accounts, and $8 billion-something piles up inside of Alameda Research that belongs to FTX customers that never gets moved. It never gets transferred over. It never gets transferred. That sounds like a problem. It's a huge problem. What's the toughest question you think Sam's going to have to answer? How do you not know that $8 billion that's not yours is in your private fund?

I mean, really, how do you not know? Explain. $8 billion is in your private fund that belongs to other people, and you're saying you didn't know. Please explain how that's possible. Did you do that? Yeah, I did. What did he say?

He said, you have to understand that when it went in there, it was a rounding error, that I felt like we had infinity dollars in there, that I wasn't even thinking about it. I could see people watching this saying, like, come on, guys. This is Elizabeth Holmes in cargo shorts. And this is all a ruse. Don't fall for the shtick. This is a bad actor. It is a little different supplying, you know, phony medical information to people that might

kill them. And in this case, what you're doing is possibly losing some money that belonged to crypto speculators in the Bahamas. On the other hand, this is not to excuse. He shouldn't have done that. Early in the morning of November 11th, Sam Bankman-Fried reluctantly Docu-signed FTX into bankruptcy. It had taken five days for FTX to implode. You go back to the Bahamas as Pompeii is falling. What did you see when you landed? I got back the day on the Friday of the collapse. It was the afternoon that Sam had signed

the bankruptcy papers. And by then, they'd been a mass exodus. Most of the employees had fled, and fled in such a way, kind of a ridiculous way. They'd taken the company cars and ditched them at the airport with the keys inside. Get the hell out of there. Nobody knew what had happened, but they were just scared that they were going to be detained by the local authorities. We drove into the lot, and Sam Bankman-Fried is walking loops around the parking lot. He'd been brought over there earlier to be interviewed by Bahamas authorities, and nobody had given him a ride home, and he was just sitting there all alone. How do you divorce Michael Lewis, the empathetic human being, from Michael Lewis, the journalist

and author who recognizes what a third actus is? Pretty dramatic, right? If I were a better person, I would have been deeply distressed by all of this. It took about a nanosecond before I thought, oh my God, this is an incredible story. A month later, Bankman Freed was arrested in the Bahamas and extradited to New York to face federal charges that he had fraudulently used customer deposits to finance billions of dollars of venture capital investments,

real estate purchases, and political donations. What's your response to someone who hears us and says, it's a fun story and it's crypto in the Bahamas, but this is the oldest architecture of a financial collapse that's been going on for centuries? This isn't a Ponzi scheme. Like when you think of a Ponzi scheme, I don't know, Bernie Madoff. The problem is there's no real business there. The dollar coming in is being used to pay the dollar

going out. And in this case, they actually had a great real business. If no one had ever cast aspersions on the business, if there hadn't been a run on customer deposits, they'd still be sitting there making tons of money. Inside the Beltway, in the Hollywood Hills and in sports arenas, suddenly, if predictably, it was Sam Bankman who? He becomes toxic. Like, nobody wants to talk to him. He has no friends. You watch everybody who rushed in rush out.

How did Tom Brady react to this? The first reaction was very sad. It was sadness. I clearly really liked him, and he really liked the hope that he brought. I mean, a lot of people wanted there to be a Sam. You know, there is still a Sam Bankman-freried-shaped hole in the world that now needs filling. Like, that character would be very useful. What he represented.

What he wanted to do with the resources. And Brady was, I think, crushed. And I think his time has gone by. And he ceased to get a really good explanation about what's happened. I think he's just like, he tricked me. I'm angry. I don't want to have anything to do with it anymore. Starting in December, Lewis began driving the 45 miles from Berkeley to Stanford, where Bankman Freed was living with his parents, who have also been ensnared in legal proceedings tied to FTX. Out on bail, but wearing an ankle

monitor, he left the door open for Lewis so they could continue their conversations. We anticipated speaking with Bankman-Fried in August, but the judge in his case instituted a gag order and then put him in a Brooklyn jail for violating terms of his release. Bankman-Fried has pled not guilty. He genuinely thinks he's innocent. I can tell you his state of mind four or five months ago. It's like, if you offered me plead guilty and do six months of house arrest, I'd still say no. What do you suspect his biggest fear is if he has to go to prison? Not having the internet. Now, that sounds crazy, but I do think that if he had the internet, he could survive jail forever.

Without having a constant stream of information to react to, I think he may go mad. If you gave Sam Dankman-Fried a choice, this is quite serious, of living in a $39 million penthouse in the Bahamas without the internet, or the Metropolitan Detention Center in Brooklyn with the internet, there's no question in my mind he'd take the jail. Michael Lewis has never before written something that dovetails so dramatically with a sensationalized news event. Lewis's book, Going Infinite, comes out Tuesday, the same day Sam Bankman Freed's trial begins. He made a mockery of crypto in the eyes

of many. He's sort of taken away the credibility of effective altruism. How do you see him? Everything you say is just true. And it's more interesting than that. Every cause he sought to serve, he damaged. Every cause he sought to fight, he helped. He was a person who set out in life to maximize the consequences of his actions, never mind the intent. And he had exactly the opposite effects of the ones he set out to have. So it looks to me like his life is a cruel joke. Your local Benjamin Moore retailer is more than a paint expert. They're someone with paint in their soul. A sixth sense honed over decades. And if you have a question about paint,

it's almost as if they can read your mind. I sense you need a two-inch angle brush for the trim in your family room, regal select in an eggshell finish, and directions to the post office. Benjamin Moore paint is only sold at locally owned stores. Benjamin Moore. See the love. Actually, they will stay for dinner. Instacart has all your groceries covered this summer. So download the app and get delivery in as fast as 60 minutes.

Plus, enjoy $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart. Groceries that over-deliver. If you have Sunday dinner with 60 Minutes, next week there'll be time for an extra helping. Following our usual three stories, we'll have an all-new two-part edition. We'll travel to Texas, where a revolutionary project is building housing with 3D printers. So look, Leslie, that's a little skinny. Will you press the plus one real quick? Done. You just increase the bead size incrementally.

I'd be worried about you. And it doesn't end with Texas or even planet Earth. NASA has plans for 3D printing landing pads, roads, and eventually human habitats on the moon. I'm Leslie Stahl. We'll be back next week with another edition of 60 Minutes.