The pandemic ballot measure supported by Bankman-Fried faces a problem

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The pandemic ballot measure supported by Bankman-Fried faces a problem

When a group of wealthy Californians launched a ballot measure campaign in late 2021 aimed at improving pandemic preparedness after the deadly COVID-19 outbreak, they got more than $21 million in less than six months.

The money behind the initiative, which will raise taxes on the rich, comes from two groups with ties to Silicon Valley: one is underwritten by Facebook co-founder Dustin Moskovitz, the other by cryptocurrency executive Sam Bankman- Fried.

Months later, Bankman-Fried’s cryptocurrency empire collapsed. As suddenly as the campaign money appeared, it dried up.

The current ballot measure has $78.56 on hand, and has not attracted a new donor or received a cash contribution in 15 months, according to state filings. While many public health and medical organizations supported the measure, none donated to the campaign.

“We are in a quiet period,” said Max Henderson, a former Google executive who is one of the founders of the Californians Against Pandemic initiative.

The measure gathered more than 1 million signatures to qualify for the November 2024 ballot.

Henderson said he still plans to pursue the issue on next year’s ballot, despite the lack of funds. He said he doesn’t yet know how much more money the campaign needs to raise, but “is confident we can raise it.”

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But Bankman-Fried’s support exposes the Californians Against Pandemics measure to some risks, experts say, including that potential donors will shy away from an initiative associated with a person convicted of fraud last year. November 2.

“If I were an opponent, I would go right to him,” said Matt Lesenyie, an assistant professor of political science at Cal State Long Beach whose dissertation examines ballot measures. “I ask: Why is Sam Bankman-Fried writing the law? Why should a convicted felon decide the future of policy in California?”

Henderson said the move was inspired by his work on the board of CovidActNow, a nonprofit that is building a real-time tracker of COVID-19 risk levels across the US.

If approved by voters, the measure would raise personal income taxes above $5 million by 0.75% for a decade. Legislative analysts say the tax increase could generate $500 million to $1.5 billion annually, the largest infusion of money into the state’s public health system since its creation.

Half of the proceeds will go to a new state agency that aims to identify diseases and prevent future pandemics. The so-called California Institute for Pandemic Prevention will distribute grants to researchers studying the transmission of pathogens, including through metagenomic sequencing.

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Public health programs will receive 25% for pandemic preparedness, and K-12 schools will receive 25% for infrastructure upgrades to limit disease transmission.

Californians “love the idea of ​​soaking the rich” at the ballot box, Lesenyie said. But such measures are not guaranteed to pass. In 2022, voters rejected Proposition 30, backed by ride-hailing company Lyft, which would have raised income taxes by more than $2 million to build electric car infrastructure in the state.

The other major supporter of the pandemic ballot measure is the Open Philanthropy Project, a foundation funded by Moskovitz, a co-founder of Facebook, and his wife, Cari Tuna.

Open Philanthropy’s political action arm contributed $10 million in late 2021 and early 2022, filings show. Mike Levine, spokesman for Open Philanthropy, said: “We have previously supported the move but not for 2023-2024.”

The ballot measure committee reported $38,519.75 in non-cash contributions from Open Philanthropy this year, described in campaign finance reports as “legal treasury fees and expenses.” Henderson and Levine said the filings were a clerical error and have been corrected.

Open Philanthropy is one of the best known advocates of “effective altruism.” The movement, popular in Silicon Valley, encourages donors to focus their aid giving on reducing long-term risks to humanity, including pandemics.

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Bankman-Fried, who became the face of the movement, poured tens of millions of dollars into the cause, including the California pandemic ballot measure and contributions to Congressional candidates, including California Reps. Sydney Kamlager-Dove (D-Los Angeles) and Robert Garcia (D-Long Beach), who said they will prioritize pandemic preparedness.

His hedge fund, Alameda Research, sent $12 million in late 2021 and early 2022 to a nonprofit called Guarding Against Pandemics, which is run by Bankman-Fried’s younger brother.

The nonprofit then funneled the same amount into the pandemic ballot campaign, according to state filings.

Following the downturn in the cryptocurrency market, which brought down many trading platforms, contributions from the Bankman-Fried brothers stopped, the filings show.

FTX collapsed in November 2022. Bankman-Fried was charged with fraud and arrested the following month.

Prosecutors said Bankman-Fried took at least $10 billion from FTX customers and investors. Former employees testified during the trial that Bankman-Fried directed them to defraud customers by using cash from FTX customer accounts to pay off loans, fund cryptocurrency investments and make contributions. in politics at Alameda Research.

Whether creditors in FTX’s Chapter 11 bankruptcy will attempt to recover contributions made through Alameda remains unclear.