Up First from NPR - Ukraine Faces Waning Support From Allies, FTX Trial, Laphonza Butler

Episode Date: October 3, 2023

Ukraine's war is far from over. It's biggest challenge, however, may not be on the battlefield, but in the form of waning support from allies. How are leaders in Kyiv reacting? The man accused of orchestrating one of the largest financial frauds in American history, Sam Bankman-Fried, goes on trial today. What's his defense? And Laphonza Butler is set to be sworn in today as California's newest U.S. Senator. Want more comprehensive analysis of the most important news of the day, plus a little fun? Subscribe to the Up First newsletter.Today's episode of Up First was edited by Michael Sullivan, Rafael Nam, Padmananda Rama and HJ Mai. It was produced by Mansee Khurana, David West and Chad Campbell. We get engineering support from Stacey Abbott. And our technical director is Zac Coleman.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Ukraine's war is far from over, but its biggest challenge may not be on the battlefield. Is support from allies waning? It is among some Republicans in Congress who want the aid of Ukraine to stop power leaders in Kyiv reacting. I'm Leila Faldil, that's A. Martinez, and this is Up First from NPR News. The man accused of orchestrating one of the largest financial frauds in American history, Sam Bankman-Fried, goes on trial today. Bankman-Fried and his co-conspirators stole billions of dollars from FTX customers. If found guilty, Bankman-Fried could spend the rest of his life in prison. What's his defense? And LaFonza Butler is set to be sworn in today as California's newest U.S. Senator.

What made her the choice to fill the seat left vacant by the death of Dianne Feinstein. Stay with us. We've got the news you need to start your day. Now Our Change will honor 100 years of the Royal Canadian Air Force and their dedicated service to communities at home and abroad. From the skies to our change, this $2 commemorative circulation coin marks their storied past and promising future. Find the limited edition Royal Canadian Air Force $2 coin today. Ukraine is at something of a crossroads. Yeah, its troops are making limited progress on retaking Russian-occupied land and winter's approaching. And the longer Russia's war on Ukraine lasts, the more support for Ukraine seems to waver, especially among Republicans in Congress. Ukraine's President Volodymyr Zelensky knows this.

Here's what he said to our co-host Stephen Skip in a recent interview. We have to kind of be very strict and very fast because we might lose the trust and the support of our partners. Over the weekend, Congress passed a short-term spending bill to keep the government running through mid-November. Not included in the bill was additional aid for Ukraine. And now there's a move to oust House Speaker Kevin McCarthy, creating further instability. Joining us now to discuss all this from the Ukrainian capital, Kiev, is NPR's Joanna Kakisis.

Joanna, how are the Ukrainian leaders reacting to Congress's decision to forego aid in this short-term spending bill? Yeah, so President Zelensky is still advocating for more aid because Ukraine desperately needs it. But the government also seems to have realized that large amounts of military aid won't last forever. So Ukraine is actively looking for long-term alternatives to foreign military aid. Just last Friday, at a defense forum in Kyiv, the government brought together international arms manufacturers from dozens of countries. President Zelensky told the forum that Ukraine has to make progress on the battlefield every day. And to make that happen, Ukraine's new

defense minister, Rustam Umerov, says he wants Ukraine to partner with its allies and defense industry leaders to manufacture world-class weapons. He's saying our mission is to produce weapons to cover Ukraine's needs right now, and then after the war, to export those weapons. All right, now another winner approaches all this. Where do things stand on the battlefield? Well, there's been some incremental progress on the front line, mainly in the south and the east, but Ukrainian forces have been stymied for two main reasons. One is landmines. The southern front is filled with them, and Ukrainian forces have to clear them or go around them so they can sever the land bridge to Crimea. That would cut off Russian supply routes. And the other reason

for the slow progress is that Russians have learned from their mistakes early in the war and are fighting more effectively. Now, I just mentioned Crimea. That's the southern peninsula in Ukraine that Russia occupied in 2014. Ukrainian forces have recently made bold strikes there, attacking Russian positions with long-range missiles provided by the West. Now, in a letter to congressional leaders, the Pentagon warned that it's running low on money to replace weapons that they sent to Ukraine. So what does that mean for this counteroffensive? Yeah, well, that's probably not going to help the counteroffensive, but the Ukrainians are determined to end this war on their terms, and that means getting all their land back. But they know that this is going to come at a high cost. This weekend, we were at a memorial in central Kiev celebrating Ukraine's soldiers.

And that's where we met 39-year-old Serhii Manko. He spends his weekends delivering supplies to soldiers. And he's saying here that when he visits the front line, he hears soldiers talking all the time about how every piece of land they retake comes at the expense of someone's life. Joanna, how is the slow pace, the counteroffensive playing out with Ukraine's other allies? So on Monday, yesterday, foreign ministers from countries in the European Union showed up here in Kiev to show their support for Ukraine and for fast-tracking Ukraine's EU membership.

But there are cracks here and they're growing. Hungary, for example, is already friendly with the Kremlin and a pro-Kremlin party won elections in Slovakia this weekend. All right. That's NPR's Joanna Kakisis in Kyiv. Joanna, thanks. You're welcome. Not long ago, FTX was one of the hottest new companies in finance, but it collapsed spectacularly last November. And today, its founder goes on trial in New York. Sam Bankman Freed, better known by his initials SBF, is accused of orchestrating one of the biggest financial frauds in American history. And if he's found guilty, SBF could spend the rest of his life in prison. NPR's David Gura will be at the courthouse today. David, what

has SBF been charged with? Well, Sam Begman-Fried faces seven serious criminal charges, including securities fraud and wire fraud. There's also a money laundering charge. And SBF has pleaded not guilty to all of these. FTX was this multi-billion dollar company. It ran one of the largest cryptocurrency exchanges in the world. Hey, here's what Damien Williams said when SBF was arrested last December. He's the U.S. attorney for the Southern District of New York. Bankman Freed and his co-conspirators sold billions of dollars from FTX customers. He used that money for his personal benefit, including to make personal investments and to cover expenses and debts of his hedge fund, Alameda Research.

Simply put, SBF is accused of defrauding FTX's customers and investors of cheating them out of their money. Now, you heard Damian Williams mention Alameda Research. That was the name of an investment fund SBF also started, a crypto-focused hedge fund. And stick with me because this is important. That relationship between that fund and FTX is at the heart of this case. What prosecutors allege, A, is that Alameda Research had SBF's blessing to steer money from FTX's customers to plug this giant hole in Alameda's balance sheet, an $8 billion hole that developed when crypto prices crashed last year. So SBF faces these seven charges at his trial today. The U.S. government says it plans to

try him on more criminal counts in the future. What are his defense attorneys going to argue? Well, Sam Edmund Fried's expected to claim he had no intention of defrauding anyone or committing any crimes. It's likely his attorneys will echo what he said from the get-go, that he got in over his head as this company started back in started back in 2019, grew exponentially. He was in his late 20s. He never managed anything like this before. FTX got really big, really fast, riding this wave of enthusiasm for cryptocurrency. It was also fueling that craze.

It spent tens of millions of dollars on marketing. Tom Brady, Steph Curry, Larry David, these were all paid spokesmen for the company. Attorney Rebecca Mermelstein, who used to be a prosecutor in the U.S. Attorney's Office that's trying this case, told me she expects SBF's lawyers will play up as much as they can how sprawling SBF's crypto empire was. And the more you can confuse the jury or make the jury think it's complicated, the more you support an argument that the defendant also found it complicated. So complicated, SBF didn't fully understand what was going on, eh? And something else the defense may try to claim

is that back when SBF was running FTX, he got bad advice from other lawyers. Now, who's expected to testify on this? Well, jury selection starts today, then we get to the trial itself, which is supposed to last for six weeks. Since Sam Bankman-Fried was indicted last December, the government has filed separate criminal charges against four of SBF's now former colleagues. Caroline Ellison is one of them. She ran that crypto hedge fund we were talking about. She's also SBF's ex-girlfriend. Not too long ago, many FTX executives lived together in this $30 million penthouse in the Bahamas where the company was headquartered. Now, Ellison and those three other former executives have all pleaded guilty to the criminal charges against them. And since then, A, they have been cooperating with the prosecution. They're likely to testify, and we're also expecting to hear from FTX customers,

customers who lost billions of dollars when the company went bust. NPR's David Gurra, thanks for explaining all this to us. Thanks, Dave. LaFonza Butler will make history today when Vice President Kamala Harris swears her in as California's newest U.S. Senator. Yeah, Butler will become the first Black lesbian to openly serve in the Senate. She will serve out the remainder of a Senate term left vacant by the death of Dianne Feinstein, who represented California for three decades. For more on this, we turn to Scott Schaefer from member station KQED in San Francisco. Scott, so why did California Governor Gavin Newsom choose LaFontaine Butler

for that vacancy? Well, I think she has a lot of qualities that Newsom likes, including the fact that her appointment is historic. As we heard in the introduction there, she'll be the first lesbian of color to serve in the Senate. Newsom likes that. She's also relatively young, 44, and he's talked about her resume, you know, her personal experience growing up in a middle-class family in Mississippi. And she's also had a lot of work in her past on big issues that Democrats care about, like abortion. You know, she's head of EMILY's List, where she's helped women who support abortion rights get elected. That's a big issue, of course, for Democrats. And, you know, as an open lesbian,

she can very much relate to the attacks that the LGBTQ community are undergoing right now and challenges to working people, all those things. And, you know, she's got really solid labor credentials, which is important to the Democrats. Basically, Newsom said that her experience just meets the moment. And this is how he summarized it yesterday. I just think LaFonza Butler is uniquely positioned, simply the best person that I could find for this moment and this job. And A, you know, a lot of people are saying, well, what are her priorities going to be? But, you know, she's coming into an institution where seniority is everything, and she's dead last in seniority. I don't think we'll hear any big policy pronouncements from her.

But the big question really is, will she run for six years, or is she just going to fill out the rest of Dianne Feinstein's term? We don't know the answer to that yet. Yeah, there are a number of California Democrats already vying for this Senate seat after Feinstein announced that she would not run for re-election. So how does Butler's appointment affect that race? Well, it's got a real potential to shake things up. It really upsets the apple cart in a lot of ways. You know, Newsom said a couple of weeks ago that he only wanted to appoint someone as an interim senator, not somebody who would run against the current field of Democrats, which includes, as you know, Adam Schiff, Katie Porter, and Barbara Lee, three pretty well-known Democratic members of Congress from out here. He got a lot of blowback for that, especially from Black women who thought it was kind of insulting. You know,

they wondered, why didn't he name, you know, Congresswoman Lee, who's already running for the Senate seat? She's the only Black woman in the field. But Newsom says, you know, Congresswoman Lee, who's already running for the Senate seat? She's the only black woman in the field. But Newsom says, you know, it's up to Butler now whether or not she wants to run. She hasn't said one way or the other. But I do think that the biggest impact is going to be on Barbara Lee. It's hard to see how this is going to help her. Yeah, on Barbara Lee, there was a lot of pressure, as you mentioned, for Barbara Lee to get that Senate seat. Why do you think Gavin Newsom didn't choose her?

In a word, politics. We know that former House Speaker Nancy Pelosi is a huge supporter of Adam Schiff. She's endorsed him for the Senate seat. And right now, Barbara Lee in the polls is running third behind Schiff and Porter. She's had a hard time raising money. If he had appointed her, it might have helped her, improved her chances a bit. Not something that Nancy Pelosi would have liked, you know, but she would have been running as an incumbent senator. That has its advantages. But, you know, the other thing is that Congresswoman Lee is 77 years old, and that might have worked against her, especially given all the controversy we've seen over the last month with Senator Feinstein's physical and mental decline. That is Scott Schaefer from member station KQED. Scott, thank you.

You're welcome. And that's Up First for Tuesday, October 3rd. I'm E. Martinez. And I'm Leila Faldil. Today's episode of Up First was edited by Michael Sullivan, Raphael Nam,

Padmanandarama, and H.J. Mai. It was produced by Monty Carana, David West, and Chad Campbell. We get our engineering support from Stacey Abbott, and our technical director is Zach Coleman. Start your day here with us again tomorrow.

And thanks for waking up with NPR. Your NPR station makes Up First possible each and every morning. Support them and support us at donate.npr.org slash upfirst. A burst.