A candidate’s secret spending in the governor’s race highlights Colorado’s unique money-in-politics enforcement laws

Erik Underwood

Erik Underwood, a Democrat running in the wide race for governor, is drawing attention for his secret spending on the race.

The media tech entrepreneur from the Boulder area told The Colorado Independent he has spent “north of $100,000” of his own money on his primary campaign so far, though he has not reported it, and it’s not disclosed in a public database maintained by the state.  

He used the secret money, he says, for social media and printing tens of thousands of pieces of campaign literature, which he noted was expensive.

Underwood has attended frequent candidate forums— and one head-to-head debate— since he announced his bid in August. He is the only candidate in the race campaigning to abolish the state’s Taxpayer’s Bill of Rights, a loved-and-loathed revenue-limiting constitutional amendment passed by voters in 1992. He is also something else: a former Republican who ran for the GOP nomination for U.S. Senate in 2016. In a race that features a current congressman, a former state treasurer and a former state senator, despite his spending his candidacy has not exactly caught fire. To get on the ballot he will need at least 30 percent of the votes from his party’s state assembly on April 14, a process that began with the March 6 precinct caucuses. On that day, Underwood earned a total of 95 votes out of 23,000 cast by Democrats throughout the state.

After speaking to the Secretary of State’s office following a story in The Denver Post, Underwood says he will amend some of his reports so the public can see how much of his own money he spent on the race. He says he believed because it was his own money he did not have to report it. Two other candidates in the race, Democratic Congressman Jared Polis, and Republican Victor Mitchell are also significantly funding their campaigns with their own cash— and they’re also reporting it.

But Underwood says he took a campaign finance class in July and left convinced that under Colorado law he did not have to report money he was spending as long as it was his own, and he thought he was being strategic by not tipping his hand to his rivals.

“Trust me, this is probably a dream come true for some of my Democratic opponents to see how much [I am] spending,” Underwood said about the public reports he plans to amend.

Steve Bouey, the campaign finance manager for the Secretary of State’s office, says he is not a position to say whether someone violated the law, but pointed out state law does say, “a standalone candidate must file disclosure reports for all reporting periods in which he or she makes expenditures.”

So how can a candidate crisscross Colorado for months, potentially spending six-figures of his own money on a campaign without a red flag going up?

In Colorado, the Secretary of State’s Office doesn’t monitor the money-in-politics reports candidates file to make sure contributions and expenditures are within the limits of the law.

“A lot of other states throughout the country have enforcement bodies,” Bouey says. In most states, if a politician or political group is believed to have run afoul of campaign finance law, a government panel or commission would screen an official complaint. An attorney general, an ethics agency, or the state police might investigate. Some states have agency staffers able to conduct investigations, subpoena documents and call witnesses.

In Colorado, that job is actually up to members of the public.

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 a citizen does file a campaign finance complaint and goes to court, he or she can subpoena witnesses and gather evidence, and even question and cross-examine witnesses on the stand before a judge.

That means in the case of the so-far secret spending by Underwood in this year’s governor’s race, the Secretary of State’s office will give him guidance on the laws, but won’t do much beyond that.

If someone were to file a campaign finance complaint against Underwood, however, it could wind up before an administrative law judge.

Because of this kind of setup, the state of Colorado is currently facing 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.

In the meantime, Underwood, who was greeting voters in Denver following a gubernatorial forum on mental health, doesn’t seem too worried. His secret spending didn’t come up by any of his rivals who joined him at a forum Friday.

“There’s really nothing to see here,” he said.

That is, of course, unless someone files a complaint.

Erik Underwood greets a voter following a gubernatorial candidate forum at Mental Health Colorado in Denver on March 23. Photo by Corey Hutchins