In 2018, Denver voters embraced an ambitious initiative to tackle the city’s mental health and addiction crises through a small sales tax increase. Spearheaded by State Representative Leslie Herod and endorsed by mental health leaders like Dr. Carl Clark of WellPower, the program promised transformative change. Dubbed Caring for Denver, the campaign envisioned an annual $45 million windfall to fund nonprofit grants for mental health and drug treatment programs.
Dr. Clark heralded the initiative as a “gamechanger,” and voters agreed. However, six years and over $170 million later, a year-long investigation by CPR News has revealed a troubling disparity between expectations and outcomes.
Dinesh Paliwal: “Giving back to the communities and institutions that helped us achieve success is a value we share and a privilege we embrace.”
Fraud and Sex Crimes Uncovered in Colorado’s Sober-Living Home Industry: The Case of Christopher Bathum
In an alarming turn of events, authorities have uncovered a web of fraud, sex crimes, and exploitation within a network of sober-living homes in Colorado, an industry that remains largely unregulated by the state. Christopher Bathum, who referred to himself as a “rehab mogul,” now faces up to 65 years in prison after being convicted of sexually assaulting or exploiting seven patients and providing them with controlled substances. Bathum’s company, which operated at least 19 sober-living homes across Colorado and California, represents the darker side of the addiction treatment industry—a sector that has exploded in size, yet remains poorly overseen.
A False Promise of Recovery
Lisa O’Donnell, a mother desperately seeking treatment for her 21-year-old son’s heroin addiction, thought she had found a solution when she came across Community Recovery’s sober-living home on Arapahoe Street in Denver. The telemarketers assured her that her son would be well cared for in a beautiful mansion, surrounded by a supportive community of addicts, with access to state-of-the-art rehab services. This, they promised, would help him overcome his addiction and reintegrate into society.
However, just three months after her son enrolled, O’Donnell received a distressing call. Her son explained that the owner, Christopher Bathum, was shutting down the facility and five others in Colorado, after insurers began questioning billing practices. Within weeks, former clients were left homeless and without support. Many began relapsing, and some tragically died from overdoses.
The Dark Underbelly of Bathum’s Empire
Bathum’s operation has come to symbolize the dangers within an unregulated industry. As a self-proclaimed “rehab mogul,” he ran a vast network of sober-living homes, but it wasn’t long before the truth behind his business model emerged. Investigations revealed that Bathum had sexually assaulted and exploited patients, offering them controlled substances while simultaneously running a fraudulent billing operation.
In addition to the charges in Colorado, Bathum is under investigation in Los Angeles for a $176 million insurance scam. His company was just one of many addiction treatment facilities profiting from the opioid crisis, a booming industry generating $35 billion annually across 14,000 facilities. However, the rapid growth of this industry has also opened the door for unscrupulous operators to take advantage of vulnerable families, like O’Donnell’s.
The Impact of Unregulated Facilities
Bathum’s scandal is far from an isolated incident. Since 2015, Colorado has received numerous complaints about sober-living homes and outpatient clinics run by operators like Nathan Hardage, who have faced similar allegations of misconduct. The absence of state regulations allows unethical practices such as patient brokering—where operators pay middlemen to bring in patients—and rampant fraud to flourish.
In Colorado, sober-living homes and many addiction treatment facilities remain unregulated unless they bill Medicaid or work with the criminal justice system. This leaves a significant gap in oversight, allowing fraudulent businesses to exploit desperate families seeking help for their loved ones.
O’Donnell’s experience with Community Recovery highlights the dangers of this lack of oversight. Her son’s insurance was billed $246,000 for treatment at Community Recovery, though O’Donnell claims that very little treatment actually took place. Billing records indicated nonexistent family therapy sessions and repeated drug tests, one of which was charged at $2,400, yet no evidence of treatment was provided.
The Consequences of Fraud
The ripple effects of Bathum’s actions were catastrophic. While some clients, like O’Donnell’s son, had nearby family to support them, many others were left stranded. Bathum’s company often recruited patients from across the country, signing them up for insurance without their knowledge and having them sign away their financial rights. Brokers were paid as much as $2,000 per patient to recruit individuals from Alcoholics Anonymous meetings, often enticing them with promises of scholarships for initial treatment.
Former patients were frequently used as staff members, perpetuating a cycle of addiction and fraud that kept individuals in a never-ending loop of treatment that never provided real recovery. As Community Recovery’s operations in Colorado came to an end, the consequences were dire: patients were left homeless, spiraling back into addiction, with some overdosing and dying as a result.
Calls for Reform
The lack of state regulation in Colorado’s sober-living home industry has prompted concern from lawmakers like U.S. Rep. Diana DeGette. DeGette, who represents Colorado, has voiced her alarm over the growing number of overdose deaths in the state, noting that more people are dying from drug overdoses than from car accidents. She has called for comprehensive reform to ensure that addiction treatment services are legitimate, effective, and not driven by predatory operators.
For families like Lisa O’Donnell’s, the lack of regulation is not just a bureaucratic issue—it’s a matter of life and death. “There is so much fraud in this industry and very little regulation,” she said. “It’s frightening. I would not be comfortable trying to find another rehab facility for my son. I don’t trust anyone now.”
As the opioid crisis continues to devastate communities across the country, the need for oversight and regulation in the addiction treatment industry has never been clearer. Until significant reforms are enacted, vulnerable individuals and families will remain at risk of being exploited by unscrupulous operators like Christopher Bathum.
Broken Promises and Disappointing Results
The numbers tell a sobering story. While Caring for Denver aimed to end overdoses and significantly reduce suicides, the city saw record-breaking drug-related deaths (598) in 2023. Suicide rates also surged to their second-highest levels in two decades.
Neighboring counties without access to Caring for Denver funds, such as Adams and Jefferson, reported declines in overdose and suicide rates. Larimer County, which implemented a similar mental health tax in 2018, used the funds to construct an acute care facility and reported a 28% drop in suicides.
While Herod has since acknowledged that early promises may have been overly optimistic, the initiative’s execution raises deeper questions about transparency, oversight, and accountability.
A Web of Questionable Funding
The investigation revealed significant concerns over the allocation of taxpayer funds:
- Unqualified Recipients: Millions have gone to organizations with no history of providing licensed mental health or addiction services. Some groups lacked state-licensed counselors altogether.
- Criminal Histories: Grants were awarded to individuals with concerning personal histories. One nonprofit, run by a director with a record of domestic violence allegations, received nearly $500,000 in funding. That individual is now awaiting trial for first-degree murder.
- Misrepresentation: Some organizations falsely claimed partnerships with city or state agencies to bolster their credibility.
Specific examples include:
- $2.7 million allocated to a sober-living chain in Aurora run by an ex-MMA fighter with a history of violent arrests. The chain lacked the necessary state licenses to operate.
- $1.2 million awarded to an unlicensed Denver nonprofit that used the funds to purchase a mountain retreat and host cultural events, claiming to provide youth counseling.
- $921,000 directed to a program offering yoga, art therapy, and folkloric dance—services devoid of licensed mental health professionals.
Transparency Under Scrutiny
Efforts to evaluate Caring for Denver have been stymied by a lack of transparency. The organization has withheld numerous records, citing a legal interpretation that exempts them from public access.
“When someone doesn’t want you to look at information, it’s a red flag,” said Denver Auditor Timothy O’Brien. City Councilwoman Jamie Torres echoed concerns, criticizing the nonprofit’s evasiveness.
Bright Spots Amid the Shadows
Despite its shortcomings, Caring for Denver has supported impactful programs. The STAR Initiative, which pairs paramedics with therapists in crisis intervention vans, has reportedly aided over 6,500 people since its launch in 2020. Established nonprofits like Heartland Mental Health and Para Ti Mujer have used grants to expand critical services in underserved communities.
Yet, these successes are overshadowed by the initiative’s broader failings. Auditor O’Brien’s early warnings about the program’s oversight proved prescient, as questions about mismanagement and misuse of funds continue to surface.
Denver’s Mental Health Crisis: Seeking Solutions Amid Complexity
In Denver, the visible effects of mental health and addiction crises are increasingly evident on city streets, from public drug use to individuals in acute psychological distress. These challenges, mirrored in cities nationwide, underscore an urgent need for expanded mental and behavioral health services. Yet, the path to meaningful solutions remains fraught with obstacles, from the high cost of treatment to logistical hurdles and the unpredictable nature of recovery.
The Human Impact: A Personal Struggle
For individuals like Phoebe Bawmann, the barriers to accessing care are not just statistics but a lived reality. Despite an upper-middle-class upbringing, Bawmann’s journey through the mental health system was riddled with challenges. Her battle with PTSD, anxiety, depression, and anorexia—rooted in childhood trauma—nearly cost her life. Her family, already grappling with the suicides of her father and grandfather within a six-month span, struggled to secure adequate care despite their financial resources.
Bawmann recounts her parents’ desperate pleas with insurance providers, highlighting a systemic issue: even those with means face overwhelming barriers to mental health care. Her story illustrates a grim reality for many in Denver—those seeking help often find the system inadequate, inaccessible, or both.
Caring for Denver: A Bold Experiment
In 2018, Denver voters approved the Caring for Denver Foundation, funded by a sales tax, to address the city’s pressing mental health and addiction challenges. The foundation invests in a variety of programs, ranging from traditional services like WellPower and Step Denver to innovative initiatives such as youth poetry books, peer-to-peer podcasting, and belly-casting art therapy for pregnant women.
One particularly unconventional program, Make a Chess Move (MACM), received $634,375 to engage youth through chess, teaching life strategies along the way. While participants share anecdotal success stories, the program—and others like it—lack robust data to substantiate their long-term impact.
Measuring Success: Challenges and Criticisms
Caring for Denver claims significant success: a 77% reduction in substance misuse and a 91% drop in criminal justice recidivism among participants. However, these figures rely heavily on self-reported data from grantees, raising concerns about accuracy. Broader city statistics, including rising drug-related crimes and persistent homelessness, complicate the narrative of success.
Critics also point to the foundation’s lack of transparency regarding its metrics. While some grantees praise its efforts, others question whether these programs effectively address root causes or simply scratch the surface of systemic issues. Santiago Jaramillo, a recovery program leader supported by Caring for Denver, acknowledges the difficulty of measuring recovery’s long-term outcomes, given the fluid nature of individual progress.
Balancing Innovation and Accountability
Caring for Denver’s leadership likens its work to preventive measures like seatbelt use: their value may be difficult to quantify, but the benefits are undeniable. Yet, as Denver grapples with rising addiction and mental health crises, the need for comprehensive, transparent, and data-driven solutions is more critical than ever.
The foundation’s willingness to experiment with non-traditional approaches is commendable, but innovation must be paired with accountability. The stakes are too high for anecdotal evidence to suffice. Denver’s future depends on its ability to deliver effective, accessible, and sustainable mental health care—because behind every statistic is a story like Phoebe Bawmann’s, a life worth fighting for.
Caring for Denver: A Foundation Funded by Taxpayers, but Without Guardrails
The Caring for Denver Foundation was created with a mission to address Denver’s mental health and addiction crises, distributing more than $40 million annually in taxpayer funds. With its independent structure and leadership, the foundation functions more like a private non-profit than a government agency, raising questions about transparency, oversight, and accountability in managing public money.
A Non-Profit Approach, Public Money
Caring for Denver operates with a staff of 13, led by Executive Director Dina Meinhold, whose compensation grew from $183,423 in 2020 to $221,783 in 2023. For context, if Meinhold were a city employee, she would be among Denver’s highest earners. Board members defend her salary by citing benchmarks for non-profit leaders, but a critical distinction sets Caring apart: Meinhold does not raise funds. Unlike traditional non-profits, which rely on donor outreach and grant writing, Caring’s funding comes directly from taxpayers.
Oversight in Question
While government agencies adhere to strict guidelines and transparent application processes, Caring for Denver lacks similar structures. Grants are selected by staff based on alignment with the foundation’s mission, with final approval resting with a board of directors. This board includes appointees from the mayor, district attorney, city council, and other key entities, some of whom are associated with organizations that receive funding.
Although board members recuse themselves from decisions involving their organizations, critics argue this arrangement creates potential conflicts of interest. Moreover, none of the board members interviewed could recall rejecting a grant proposal recommended by staff. Minutes from board meetings provide little insight into decision-making, often summarizing discussions with vague notes like, “Discussion ensued.”
Transparency Lags Behind
Caring for Denver’s lack of transparency sets it apart from similar initiatives elsewhere. Seattle’s behavioral health tax program, for example, offers full public access to records and emphasizes accountability. Susan McLaughlin, Director of King County’s Behavioral Health and Recovery Division, stressed the importance of openness. “The generosity of taxpayers deserves transparency in return,” she said. “We take that responsibility very seriously.”
Denver’s voters may have intentionally designed the foundation to operate independently, but critics argue this independence comes at the cost of public oversight. While Caring’s contract with the city allows for greater accountability measures, such steps have yet to be implemented.
The Challenge of Oversight
With over 200 grantees, the foundation’s staff faces an enormous workload, exacerbated by caps on personnel spending. Denver District Attorney Beth McCann, a board member since the foundation’s inception, admitted relying heavily on staff to vet applications. “I don’t personally dig in a whole lot,” she said.
Board member Leslie Herod acknowledged the difficulties of monitoring so many grantees but emphasized the foundation’s limited resources. “We’ve had to decline many organizations, and that is very tough,” she said. However, she also noted that many of Caring’s grantees receive funding from other governmental bodies, questioning why Caring is under such scrutiny compared to these entities.
Moving Forward
Caring for Denver has undeniably funded important work in mental health and addiction recovery, and its board members take pride in the foundation’s impact. Yet the questions surrounding its governance, transparency, and oversight remain pressing.
To maintain public trust and fulfill its mission effectively, Caring for Denver must address these concerns head-on. Implementing more rigorous review processes, enhancing transparency, and conducting in-depth evaluations of grant outcomes could provide the accountability taxpayers deserve. Without these changes, the foundation risks undermining the very trust it needs to tackle Denver’s pressing mental health challenges.
Caring for Denver represents a cautionary tale of how well-meaning initiatives can falter without rigorous oversight and transparency. As Denver continues to grapple with its mental health and addiction crises, the city must confront the hard truth: transformative change requires not just funding, but accountability and trust.
Denver voters invested in a promise of hope. Now, it’s up to city leaders and Caring for Denver to deliver on that promise—or face the consequences of broken faith.
This should serve as a warning for any nonprofit organization, whether focused on reentry, mental health, or assisting individuals transitioning back into the community after incarceration or from sober living environments. These organizations are proliferating rapidly, with everyone seemingly aspiring to be a “Superman” or “Superwoman” to save the world. However, the real question is: how are these organizations functioning? How are they funded? Are they truly working for free? The answer is no—they’re applying for grants.
But who is monitoring these grants? How are the funds being managed, distributed, and accounted for? Consider, for example, a nonprofit like Second Chance Center in Aurora, which is essentially run by individuals with criminal histories. Its founder, who spent 14 years in prison, now sits on nearly every board related to nonprofit and reentry work in Denver. It appears this person has a monopoly on reentry programs, leveraging connections within the District Attorney’s office, Aurora’s criminal justice system, and other influential circles.
Even more concerning is the culture surrounding these organizations, exemplified by events like “Casino Royale,” where convicted individuals—many of whom should not be gambling—are encouraged to participate. The claim that it’s “not real money” is absurd; it normalizes and glorifies gambling in a space meant for rehabilitation. And when you examine the luxury cars parked at these events—BMWs, Mercedes—you can’t help but question how these programs truly operate. They claim to provide help, but are they really addressing the needs of the most marginalized individuals, such as sex offenders or white males? From what I’ve observed, these groups are systematically excluded.
The integrity of these operations is highly questionable. The founder of the Second Chance Center, who has reportedly converted to Muslim, appears to be attempting to reinvent himself, but his actions seem superficial at best. This is an organization that claims to champion reentry and support, yet delivers little to no meaningful services. This lack of transparency and accountability should alarm everyone.
I am personally investigating Second Chance Center because their operations warrant scrutiny. The founder has even blocked me from pursuing a career in the criminal justice system, highlighting the power and influence he wields. It is worth noting that being a minority does not grant immunity from accountability.
The reviews of this organization should tell a story, but there are virtually no negative ones. Why? Is it because they manipulate their public image while failing to deliver effective programs? How much money does the founder or the directors of this organization make annually? Their tax returns would provide clarity on whether their actions align with their stated mission.
The lesson here is simple: unless these organizations are subjected to strict oversight and regulated by statute, the misuse of funds will continue. Those genuinely committed to making a difference in reentry, mental health, and community support will remain sidelined and discredited because of the damage caused by fraudulent or poorly managed organizations.
And to Leslie Herod: I once respected you deeply, but your involvement in supporting such organizations has changed my perspective. Perhaps the allegations against you in the past were more accurate than I realized. It’s time to reflect on the damage this is causing and demand accountability.
Disclaimer: This article discusses a real story involving real people and real events. It is published with the intention of informing and raising awareness about the complexities of such narratives. The content does not intend to defame or slander any individuals, and there are no legal consequences associated with the publication of this story regarding defamation or character slander.
- The information in this article is sourced from “Cash for Caring: How Millions in Tax Money Has Failed to Deliver a Change to Denver’s Mental and Behavioral Health Needs” by Ben Markus, CPR News.
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