DENVER — The City and County of Denver's multimillion dollar project to boost small women and minority-owned businesses has collapsed, and the people running the project are suing the city for what they're calling "abandonment of minority and women-owned businesses through brazen acts of willful misconduct."
The Domestic Emerging Market Investments (DEMI) Fund was Denver's partner in the project, which was intended to distribute money from Denver's cannabis sales tax to support these small businesses. Now, managing director and founder Danielle Shoots says Denver isn't providing the funding promised and is hurting the minority businesses it set out to help.
The filing claims “the City has engaged in conduct that…puts at risk the very same emerging and startup enterprises that it ostensibly partnered with DEMI to support.”
The cannabis money went into the Herman Malone Fund, a dedicated fund established to expand access for diverse-owned Denver small businesses.
In a resolution passed by Denver City Council in October 2022, the city dedicated just over $15 million of the Malone Fund to their partnership with DEMI, formerly known as the New Community Transformation Fund.
The city's only paid DEMI $6.9 million of what was promised, the lawsuit says, and has since stopped paying them entirely. Shoots told 9NEWS the last payment from the city was in November 2023. That's when the city told her there was only a few thousand dollars left in the fund.
"I think they use the money for other things they shouldn't have. I mean, that's my opinion. Like, that's what I really think." Shoots told 9NEWS. "I think that money is not being well managed within the department. I can't I go back and forth between intentional and incompetence, but something is wrong."
Shoots says the city first said that part of the Malone Fund was out of money, then it blamed her for not having proper documentation and receipts.
"I don't know if it's a delay tactic. I don't know if they don't know where the money is, I don't know," Shoots said.
The relationship between DEMI and the city has soured to the point where Shoots and the DEMI Fund aren't asking for the full $15 million payment -- they're suing for $800,000 in unpaid invoices, and attorney's fees, before abandoning the partnership entirely.
"I don't think it's just incompetence. I just think they got caught this time by somebody who knew what to look for," Shoots told 9NEWS.
Shoots wants an audit of Denver's spending on the program, and she wants an apology for the suggestion that she did something wrong.
The lawsuit alleges a multitude of other instances of misconduct by Denver, but for Shoots, the lack of funds and accountability are stand-outs.
"I'm in the money business. I'm a black woman in the money business for 15 years," Shoots said. " It's so traumatizing to say I'm not giving you receipts. You guys might think it's flippant, but it can ruin my life."
We asked the City of Denver if there's money in the fund and where it went. A city spokesperson said they haven't seen the lawsuit and cannot comment.
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