Campaign Finance Law in Colorado by Christopher Jackson

Candidates are already gearing up for Colorado’s 2018 election, which promises to have several contested statewide races. This article analyzes the current state of Colorado’s campaign finance system.

What distinguishes the campaign finance issue from just about lations to contend with.7 Politicos of all stripes—and most impor- every other one being debated these days is that the two sides tant, their lawyers—will benefit from an analysis of the current state do not divide along conventional liberal/conservative lines. of Colorado’s campaign finance regime. —James L. Buckley

he 2016 presidential election may have wrapped up just a A Complex and Evolving Area of Law few months ago, but candidates are already gearing up for The law surrounding campaign finance regulations has for the Tthe 2018 election season. At the federal level, Republicans last several decades pulled in two different directions. On the one currently control the presidency and both houses of Congress, but hand, the U.S. Supreme Court has recognized that the First the Democrats are preparing to mount a significant challenge. The Amendment imposes substantial limits on the government’s power Senate may be a tough hill to climb,1 but claiming a majority in the to regulate the use of money in elections: “The right of citizens to House is probably within their reach.2 inquire, to hear, to speak, and to use information to reach consen- Coloradans have more than just federal offices to look toward sus is a precondition to enlightened self-government and a neces- this election season. Not only are most of the state’s General sary means to protect it.”8 As a result, “political speech must prevail Assembly members up for reelection (17 of the Senate’s 35 seats against laws that would suppress it, whether by design or inadver- and all 65 seats in the House),3 but the statewide offices are as tence.”9 On the other hand, reformers contend that “regulation is well—including the Governor and Lieutenant Governor, Secretary necessary to preserve the integrity of the Republic,”10 and that cam- of State, Attorney General, and Treasurer.4 The Governor’s race is paign finance laws work by “promoting equality, [] removing distor- well underway: declared Democratic candidates include business- tion, and [] eliminating corruption.”11 As President Taft once wrote man Noel Ginsburg, former State Senator Mike Johnston, former to Teddy Roosevelt, “I would like to have an ample fund to spread Treasurer Cary Kennedy, and current U.S. Representative Ed Perl- the light of Republicanism, but I am willing to undergo the disad- mutter. Republican candidates include Arapahoe County District vantage to make certain that in the future we shall reduce the power Attorney George Brauchler, Larimer County Commissioner Lew of money in politics for unworthy purposes.”12 Gaiter, and former State Representative Victor Mitchell. Treasurer As a practical matter, campaign finance law has always been a bit Walker Stapleton is very likely to run, and Attorney General Cyn- of a morass. Among other things, the law has recognized important thia Coffman may be mulling a race as well. The races for Attorney distinctions between candidates, political parties, and donors; be- General and Treasurer are alsoheating up, with several declared can- tween corporations and individuals; between hard and soft money; didates from both major parties.5 and between contributions and expenditures. The U.S. Supreme Each of these races will require substantial financial resources to Court has compounded the confusion by handing down several get off the ground. And while laws like the Federal Election Cam- opinions over the last 10 years that have wrought major change in paign Act and the Bipartisan Campaign Reform Act govern fed- the campaign finance arena—most notably 2010’s Citizens United eral offices,6 Colorado’s elected officials have their own set of regu- v. FEC,13 which overturned portions of decisions the Court had

Coordinating Editor About the Author Mary Elizabeth Geiger, Glenwood Springs, Christopher Jackson is an associate with Sherman & Howard L.L.C. in of Garf ield & Hecht, P.C.—(970) 947-1936, Denver. His practice areas include political law, commercial litigation, and [email protected] appeals—(303) 299-8416, [email protected].

Government Counsel articles provide information to attorneys dealing with state and federal administrative agencies, as well as attorneys representing public or private clients in the areas of municipal, county, and school or special district law.

The Colorado Lawyer | June 2017 | Vol. 46, No. 6 35 GOVERNMENT COUNSEL issued only a few years before.14 Legislators and lawyers have been example, a candidate is a person “who seeks nomination or elec- scrambling to survey the new landscape and revamp the law in a tion to any state or local office,” including a judge or justice of a way that is consistent with current First Amendment jurispru- state court.18 A person officially becomes a candidate once she dence. The Colorado General Assembly is currently considering a “has publicly announced an intention to seek” the office “and number of bills that would amend the FCPA. thereafter has received a contribution or made an expenditure in Seven years after Citizens United, the picture is clearer, though support of the candidacy.”19 An IEC, in contrast, is a group of “one hardly in perfect focus. While federal law has its own twists and or more persons that make an independent expenditure” of at least turns, Colorado has five major sources of authority: (1) Article $1,000 or collect at least $1,000 “for the purpose of making an XXVIII of the state constitution,15 (2) the state’s Fair Campaign independent expenditure.”20 And an issue committee is a group of Practices Act (FCPA),16 (3) rules promulgated by the Colorado persons who have “a major purpose of supporting or opposing any Secretary of State,17 (4) case law from Colorado’s courts interpret- ballot issue or ballot question” and have “accepted or made contri- ing Article XXVIII and the FCPA, and (5) the U.S. Constitution butions or expenditures” of $200 or more.21 The underlying prin- (the First Amendment in particular has in recent years substan- ciple is straightforward: if you are running for office, you are prob- tially curtailed the ostensible reach of Colorado law). With five ably a candidate; if you are independently supporting a candidate, competing authorities vying for influence over a single subject mat- you are probably an IEC; and if you are working for or against a ter, political players are subject to an often byzantine web of laws, ballot issue, you are probably an issue committee. Similar stan- rules, regulations, and standard practices. dards apply to political committees, small donor committees, and the remaining classifications Nuts and Bolts The regulations imposed by state law vary depending on which Colorado law recognizes a number of categories that electoral classification applies. Candidates face particularly heavy regulations: participants might fall under. There are candidates, political they must file disclosure statements22 and register with the Secre- organizations, independent expenditure committees (IECs), issue tary of State;23 they are subject to contribution limits (the amounts committees, political committees, small donor committees, can- of which vary depending on the political office and the identity of didate committees, political parties, and lobbyists. The key ques- the donor—but no person may give more than about $600 for the tion political players should keep in mind is, how are they partici- Governor’s race or $200 for a state house member’s race);24 and pating in the electoral process? These classifications are defined they must maintain financial records25 and periodically re port the by the kinds of activities the person or group engages in. For names, addresses, occupations, and employers of their contributors,

36 The Colorado Lawyer | June 2017 | Vol. 46, No. 6 GOVERNMENT COUNSEL among other information.26 IECs and issue committees are subject tees’ contact information, financials, filings of contributions and ex - to fewer rules. They must register 27 and follow re porting require- penditures, and any complaints or penalties.42 ments,28 and their expenditures cannot be coordinated with any Aside from TRACER, the Secretary has a substantial degree of candidate;29 but they do not have contribution limits.30 “soft power” given his expertise in this area. He often intervenes in Most of these rules can be grouped into one of two categories: cases before Colorado’s courts to submit amicus curiae briefs on a (1) reporting and disclosure requirements, and (2) limitations on variety of legal issues.43 And finally, the Secretary’s office offers a contributions and expenditures. The idea is that keeping campaign variety of resources to help people navigate campaign finance law, financing out in the open and limiting the financial benefits a offering filing calendars,44 training classes,45 an extremely thorough single person or entity can give to an elected official will avoid “the manual,46 and FAQs on a number of subjects.47 Thus, while not potential for corruption and the appearance of corruption” and en- directly responsible for the enforcement of Colorado campaign sure that “wealthy contributors and special interests groups [do finance laws, the Secretary is an integral part of the system. not] exercise a disproportionate level of influence over the political process . . . .”31 Conclusion With the 2018 elections coming up more quickly than one Enforcement might anticipate, look for campaign finance law to become a hot- Colorado’s method of enforcing its campaign finance laws is button issue over the next 24 months. While the ins and outs of unique. While Congress created the Federal Election Commis- the law may be complex, this overview should give lawyers and ad- sion, which has the power to civilly enforce federal campaign visors a basic roadmap of where to go. finance laws,32 Colorado has no analogous entity. The state instead chose to adopt a private enforcement mechanism, under which Notes “[a]ny person who believes that a violation” of the law “has occurred may file a written complaint with the secretary of state” within 180 1. Kamisar, “10 Senate seats that could flip in 2018,” The Hill (Nov. days of the alleged violation.33 The Secretary of State must then 16, 2016) (“[T]he 2018 Senate map . . . favors Republicans in a big way. The GOP will be defending just eight seats, while Democrats must fight forward that complaint to an administrative law judge (ALJ), who for 23—plus another two held by independents who caucus with Demo- will hold what amounts to a summary hearing (with some right to crats.”). 34 limited discovery) within 15 days. The ALJ’s decision can be 2. Enten, “A Very Early Look At The Battle For The House in 2018,” appealed to the Court of Appeals, and then to the Colorado Su- FiveThirtyEight (Feb. 15, 2017) (“Trump’s low approval rating is good preme Court, if it agrees to hear the case.35 news for Democrats. But they’ll have to work to capitalize on the national Several groups have expressed concern about Colorado’s private environment, or they might fall victim to the same structural forces that en forcement scheme, contending that it is subject to abuse by hurt Clinton and fail to take advantage of Trump’s unpopularity.”). political opponents and unconstitutionally chills Coloradans’ right 3. Colorado State Senate Elections, 2018, Ballotpedia, https://ballot to free speech.36 A lawsuit currently pending in Federal District pedia.org/Colorado_State_Senate_elections,_2018; Colorado House of Representatives elections, 2018, Ballotpedia, https://ballotpedia.org/Colo Court in Colorado alleges that the private-enforcement mecha- rado_House_of_Representatives_elections,_2018. nism is used as a weapon by political opponents and suppresses 4. Colo. Const. art. IV, § 1(1). speech in the state, and that it should be struck down in its en - 5. E.g., Matthews, “The race for Colorado governor in 2018 is starting tirety.37 If the plaintiff prevails and the enforcement mechanism is to take shape,” The Denver Post (Dec. 31, 2016), www.denverpost.com/ found to be unconstitutional, look for the General Assembly to fill 2016/12/31/colorado-2018-governor-race. the gap and establish another way to enforce the law—perhaps in 6. 52 USC §§ 30101 et seq. See 52 USC § 30101, defining the term the form of a commission like the FEC, housed within the “Federal office” to include the offices of President, Vice President, Senator, Department of State, which would independently determine Representative, and Delegate or Resident Commissioner to Congress. 7. Colo. Const. art. XXVIII, § 1. whether a complaint has merit before filing an action. 8. Citizens United v. FEC, 558 U.S. 310 (2010). 9. Id. The Secretary of State’s Role 10. Post, “Representative Democracy: The Constitutional Theory of Colorado’s Secretary of State plays a critical role in this regula- Campaign Finance Reform,” Tanner Lectures on Human Values at 199 (May 1–3, 2013), http://tannerlectures.utah.edu/Post%20Lecture.pdf. tory regime. Most important, the Secretary has legislative authority 11. Id. at 268. to “promulgate such rules . . . as may be necessary to administer and 12. Auchincloss, Theodore Roosevelt: The American President Series 90 38 enforce provisions of ” Article XXVIII. The most recent rule (Times Books 2002). amendments were adopted last year and were effective on Septem- 13. Citizens United, 558 U.S. 310. ber 30, 2016.39 Those rules fill in the gaps and make changes to 14. These include Austin v. Michigan Chamber of Commerce, 494 U.S. ensure that state law is consistent with the U.S. Supreme Court’s 652 (1990), and McConnell v. FEC, 540 U.S. 93 (2003). most recent decisions in the post-Citizens United era. 15. Colo. Const. art. XXVIII, “Campaign and Political Finance.” Colorado law also requires the Secretary’s office to maintain “a 16. CRS §§ 1-45-101 et seq. system that enables electronic filing . . . of the reports required” by 17. 8 C.C.R. 1505 to 1506 (2016). 40 18. Colo. Const. art. XVIII, § 2(2). the FCPA. In response, the Secretary established the TRACER 19. Id. program (which stands for “transparency in contribution and 20. CRS § 1-45-103(11.5). expenditure reporting”).41 While candidates and committees can 21. Colo. Const. art. XVIII, § 2(10)(a). Though significantly, the $200 use the program to file their reports online, members of the public limit has been the subject of ongoing litigation. See, e.g., Coalition for Secu- can also use TRACER to review those candidates’ and commit- lar Gov. v. Willams, 815 F.3d 1267 (10th Cir. 2016) (Colorado’s low-dollar

The Colorado Lawyer | June 2017 | Vol. 46, No. 6 37 GOVERNMENT COUNSEL threshold for issue committees did not pass exacting scrutiny and there- 37. The author was an attorney representing the Secretary of State in fore violated the First Amendment). that lawsuit. He does not express any opinions on the merits of the plain- 22. CRS § 1-45-110(1). tiff ’s claims. 23. CRS § 1-45-108(3). 38. Colo. Const. art. XXVIII, § 9(1)(b). 24. Colo. Const. art. XVIII, § 3(1). The precise dollar values are ad- 39. 8 C.C.R. 1505 to 1506. justed based on the federal consumer price index for Denver–Boulder– 40. CRS § 1-45-109(6)(a). Greeley. Colo. Const. art. XVIII, § 3(13). 41. Colorado Secretary of State, TRACER Home, http://tracer.sos.colo 25. Colo. Const. art. XVIII, § 3(9). rado.gov/PublicSite/Homepage.aspx. 26. CRS § 1-45-108(1)(a)(II). 42. Id. 27. CRS §§ 1-45-107.5(3)(a) and -108(3.3). 43. E.g., Campaign Integrity Watchdog, LLC v. Colo. Republican Party 28. Colo. Const. art. XVIII, § 5(4); CRS § 1-45-108(1). Indep. Expenditure Comm., No. 02 2015-0020 (Office of Administrative 29. Colo. Const. art. XVIII, § 2(9); 8 C.C.R. 1505 to 1506 §§ 21.1, 2. Courts). 30. CRS § 1-45-103.7(2.5). 44. Colorado Secretary of State, Filing Calendars, www.sos.state.co.us/ 31. CRS § 1-45-102. pubs/elections/CampaignFinance/filingCalendar.html. 32. 52 USC § 30106(b). 45. Colorado Secretary of State, 2016 Campaign and Political Finance 33. Colo. Const. art. XVIII, § 9(2)(a). Training, www.sos.state.co.us/pubs/elections/CampaignFinance/CPF 34. Id. training.html. 35. Id. 46. Colorado Secretary of State, Campaign Finance, Help & Re - 36. See, e.g., Elliot, “Critics: Colorado ‘outsourced’ campaign finance en - sources, Campaign and Political Finance Manual (PDF), www.sos. forcement,” The Seattle Times ( Jan. 26, 2016); Toro, “Fixing Colorado’s state.co.us/pubs/elections/CampaignFinance/files/CPFManual.pdf. Broken Campaign Finance Enforcement System,” The Colo. Indep. (Sept. 47. E.g., Colorado Secretary of State, Small-Scale Issue Committee, 14, 2016), www.coloradoindependent.com/161232/colorado-campaign- www.sos.state.co.us/pubs/elections/CampaignFinance/committee/small finance. ScaleIssue.html. n

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