Former Republican U.S. Rep. Bob Beauprez, who ran for governor in 2014, should have registered a nonprofit as a political committee, a judge ruled.
The decision came in response to a dark-money lawsuit filed by Matt Arnold, a non-attorney who prosecuted the case before an administrative law judge last month, arguing that Beauprez had run a political committee masked as a tax-exempt 501(c)(4) “social welfare” nonprofit.
Administrative Law Judge Robert Spencer ordered Beauprez’s nonprofit, Colorado Pioneer Action, to pay $17,735 to the state. The damages could have been 10 times worse— more than $170,000— but Spencer said he had discretion to reduce it. He said that high a fine would be “grossly excessive” because Beauprez’s “failure to register and report was due to an erroneous interpretation of the definition of a political committee, rather than an intentional violation of the fair campaign practices law.”
For his part, Arnold calls that “bullshit,” saying he believes the Beauprez group got off easy.
Here are the sanctions a judge imposed on ex-Colorado Congressman Bob Beauprez's nonprofit for not registering as a political committee pic.twitter.com/caYJxA4CZm
— Corey Hutchins (@CoreyHutchins) April 26, 2017
Furthermore, Spencer ruled Colorado Pioneer Action will have to register as a political committee and “file the required contribution and expenditure reports for calendar year 2016 and forward.” (Read the judge’s full ruling here.)
Beauprez’s attorney, Douglas Abbott, declined to comment, saying he had just gotten the ruling today.
That this GOP titan was lanced in court by a citizen campaign finance watchdog shows the unique nature of the way Colorado enforces campaign finance laws.
In most states, if a politician or political group is believed to have run afoul of campaign finance laws, a government panel or commission would screen an official complaint. An attorney general, an ethics agency, or the state police might investigate.
But not in Colorado. Here, anyone who lodges a complaint about a suspected campaign finance violation has to prove his or her own case against an alleged violator in a courtroom setting that at times can feel like a full-blown trial. It’s a system its critics say discourages average citizens from bringing complaints against powerful people or well-funded groups. But if you do file a campaign finance complaint and go to court, you can subpoena witnesses and gather evidence.
And that is what Arnold, who runs a company called Campaign Integrity Watchdog, did, spending the better part of a year on the case against Beauprez.
In June, Arnold filed a complaint against Beauprez’s nonprofit Colorado Pioneer Action, at the time saying it “may be the campaign finance case of the year in Colorado.”
Now, given the $17,000 ruling against Beauprez, Arnold calls it the largest campaign finance penalty in state history. (Former GOP gubernatorial candidate Dan Maes paid $17,500 in campaign finance violations in 2010.)
Beauprez ran CPA as a (c)4 nonprofit “social welfare organization.” Such nonprofits can raise unlimited amounts from people, corporations, unions, and other nonprofits. And they can get involved in politics, but the major purpose of their work cannot be to support or oppose candidates in an election. Groups that do have a major purpose of influencing an election by supporting or opposing candidates, like Independent Expenditure Committees, or IECs, are required to disclose their donors. So, if a nonprofit social welfare organization gives money to an IEC, the IEC can disclose that it took money from that (c)4, but the source of the funds are still secret.
Judge Spencer ruled, however, that supporting or opposing candidates was Colorado Pioneer Action’s major purpose, so it should have been registered as a political committee subject to disclosure.
One of the races Beauprez’s’ nonprofit got involved in was a GOP primary in a state senate race between Gordon Klingenschmitt and Bob Gardner in Colorado Springs. Klingenschmitt is now hopeful he will find out who secretly funded Colorado Pioneer Action, which spent money he believes affected the outcome of his unsuccessful race.
Following today’s ruling, Klingenschmitt called on his successful opponent, Gardner, to resign, saying he stole his Senate seat.
Garnder said he would not be stepping down, and that he disagreed with the judge’s ruling. Colorado Pioneer Action, he said, was not involved in his campaign and he had nothing to do with Beauprez’s groups. The bitterness from that bruising campaign, however, might still be lingering.
“I’m used to responding to the absurd when Mr. Klingeschmitt is involved,” Gardner said when initially asked for comment.
As for Arnold, he hopes for quick disclosure.
“We are going to find out, assuming that they actually comply with the judge’s order, the source of all the money that came in to Pioneer Action,” Arnold says about the outcome of his lawsuit. “So they will have to disclose the identity of their secret contributors.”
Whether that will actually happen remains to be seen.
While the state constitution gives administrative law judges like Spencer the power to issue sanctions like the $17,000 fine and requirement to disclose financial activity, those judges have limited powers to enforce their decisions, says Chris Jackson of the Sherman & Howard L.L.C. firm in Denver who specializes in campaign finance and political law.
“The Secretary of State can file an enforcement action; if he doesn’t, the person who filed the complaint … may file a private cause of action in state district court,” he says. “So, if Colorado Pioneer Action doesn’t comply with the ALJ’s (administrative law judge’s) order, look for the Secretary of State or [Arnold] to file an enforcement action in Denver District Court.”
Colorado currently faces a pending federal lawsuit from a Washington, D.C.-area legal nonprofit that attacks Colorado’s private-party enforcement system as unconstitutional. The nonprofit law firm Institute for Justice claims such a system “empowers political insiders to silence any ordinary speaker they disagree with.” The law firm represents a Colorado mom who was sued twice by her local school board after she placed ads in her local newspaper to alert readers to the upcoming board elections.
Today’s news drew even more attention to the way Colorado enforces campaign finance law when deputy Secretary of State Suzanne Staiert called Judge Spencer’s action a “bad ruling.”
Staiert said she was having a hard time understanding what appeared to her as conflicting statements and decisions in the ruling that deal with the way money in politics is enforced here.
“I think campaign finance is very complicated and … we’re getting these bad rulings that affect campaign finance statewide,” she said.