Dark Money Group Pouring Plenty of Green Into Denver Pot Tax Initiative

Dark-money organizations, which shield the identity of donors through legal means, are pouring contributions into the 2021 Denver election. Leading these efforts, at least financially, is a group called Guarding Against Pandemics, which has contributed $424,482 to an issue committee seeking to place a Denver Pandemic Fund initiative on the November ballot that would add 1.5 percent to the Denver marijuana sales tax and earmark money generated from that increase to fund pandemic research at the University of Colorado Denver CityCenter.

But while CU Denver CityCenter, which is a partnership between CU Denver, the City of Denver and local businesses, ostensibly stands to benefit if voters approve the proposed measure, the Pandemic Research Fund ballot initiative is not a CU project.

“The CU Denver CityCenter became aware of this proposed ballot initiative when the campaign group first suggested the idea. The University of Colorado did not initiate this proposal, is not involved in the campaign or signature-gathering process and has not taken a position on this proposed ballot initiative,” says Meghan Azralon, a spokesperson for CU Denver.

Registered in Delaware, Guarding Against Pandemics is a relatively new organization that created the website againstpandemics.org in June 2020. Since then, Guarding Against Pandemics has been bankrolling the Pandemic Research Fund campaign, which has until early July to submit 9,184 valid signatures to the Denver Election Division in order to land the initiative on the November ballot.

Gabe Claeson, an experienced Denver campaigner who is running the Pandemic Research Fund campaign, provided a statement on behalf of Gabriel Bankman-Fried, whom Claeson identifies as the director of Guarding Against Pandemics; Bankman-Fried also worked for Sean Casten, a Democratic Congressman from Illinois, from 2019 through February this year. “If we could go back to the beginning, we could have saved a lot of lives and prevented a lot of suffering by having quality research into best practices when faced with a new pandemic. We are supporting the [Pandemic Research Fund] ballot measure because the time to prepare for the next pandemic is now, and CU Denver CityCenter is the right place to make it happen,” Bankman-Fried says.

Bankman-Fried now works for a progressive politics research firm, according to online records.

Guarding Against Pandemics initiated the campaign in addition to funding it. However, notes Claeson, “Guarding Against Pandemics has no financial connection to the University of Colorado Denver CityCenter and will not financially benefit from any funding in the ballot measure. The support is purely philanthropic.”

The campaign did not reach out to local marijuana industry stakeholders before initiating signature-gathering efforts, according to Truman Bradley, executive director of the Marijuana Industry Group.

“The ballot language is very vaguely worded. There was no stakeholdering process, nor is it clear who’s even behind this. It looks like an obvious money grab to me,” says Bradley. “The Marijuana Industry Group is not wholly opposed to taxes, but justifiably, we want to have input, and we want to see other stakeholders at the table as well. There’s a limit to how much you can tax anything before it starts to impact sales and before it starts to impact the ability to do other taxes.”

Denver currently has a special marijuana tax of 5.5 percent on recreational pot sales, combined with a standard 4.81 percent retail sales tax, adding up to a final tax of just over 10.3 percent. The Pandemic Research Fund initiative would increase the special marijuana tax to 7 percent, which would increase the total local sales tax on recreational marijuana purchases in Denver to just under 12 percent.

Under the ballot measure’s wording, the 1.5 percent tax increase would raise $7 million annually; that money would go to CU Denver CityCenter, where 75 percent would be split to fund research of personal protective equipment, disinfection and sterilization technology, and design features of physical spaces. The remaining 25 percent would go toward researching public policy and planning related to pandemics.

“It is highly unusual for an entity based in another state — in this case, Delaware — to fully fund an entire municipal ballot measure in Denver,” says Andy Szekeres, campaign finance administrator for the Denver Clerk and Recorder. “It is not uncommon for entities outside of Colorado to fund issue campaigns at a much lesser degree in Denver, but Guarding Against Pandemics Inc. has no prior profile of giving in Colorado before. …
They are using a legal structure but shielding their funders from any public review. Our agency has no insight into who or why a funder or series of funders are spending over $424,000 on a Denver ballot measure to date.”

The other main dark-money group putting money into election efforts aimed at the November Denver ballot is Defend Colorado, a political advocacy group that has contributed $250,000 to campaigns behind three ballot measures: A pair of initiatives being pushed by the chair of the Denver Republican Party, and a referendum seeking the repeal of Denver City Council-approved changes to the group-living aspects of the Denver Zoning Code.