Super PAC money flooding into Colorado state races

Pile of Money
Photo credit: Nick Ares, Creative Commons, Flickr.

Political super PAC committees already have raised nearly $22 million to pump into the battle over control of the governor’s mansion and state legislature in Colorado.

The Colorado Independent tracked contributions to two types of political super PACs: independent expenditure committees [IECs] and 527 political organizations. Our analysis found that most of the $21.8 million came from special interests such as Wall Street, education- and environmental-advocacy organizations, the oil and gas industry, and partisan groups such as the Republican Party and Coloradans for Fairness, a pro-Democrat super PAC targeting state Senate races.

Between the $21.8 million raised by super PACs and $34.9 raised by the campaigns themselves, almost $57 million has flowed into state elections from the beginning of this election cycle in January 2017 to the most recent filing on Aug. 1.

Both 527s and IECs are prohibited from coordinating with campaigns and 527s have the added requirement that they also cannot specifically ask the electorate to vote for or against certain candidates. But unlike candidate committees, which have more stringent contribution limits and disclosure rules, 527s and IECs can accept virtually unlimited contributions and their disclosure rules have more loopholes.

Though super PAC involvement in elections isn’t new, says Colorado State University’s Robert Duffy, a political science professor, “the amount of spending is increasing dramatically and the amount of unlimited, undisclosed spending is increasing dramatically.”

Using the state’s political database, The Colorado Independent found that about 50 IEC and 527 political organizations are active in Colorado this election cycle. These super PACs seek to influence this year’s elections through various means including fundraising, canvassing, polling, advertisement buys and mailings.

“Outside groups have become increasingly sophisticated at figuring out where the close races are going to be,” Duffy says. “The money is concentrated in a handful of state Senate and the handful of state House races that are going to be competitive and that will decide who has the majority in either body. The same holds true for governor’s races.”

Democrats currently control Colorado’s House by a wide enough margin that they are likely to keep control of that chamber. But Republicans are holding on to the Senate by just one seat.

At least half of the super PAC money has targeted the governor’s race so far, but committees focused on key state legislative seats have raised at least $6 million in donations.

In this election cycle, more than $18.4 million – or about 84 percent of the $21.8 million – came from special interest donations of more than $5,000. Breaking those contributions down even further, about 250 special interest donors contributed more than $10,000, and 40 of those donors have given $100,000 or more to an IEC or a 527.

Michael Bloomberg, billionaire owner of Bloomberg L.P. and former New York City mayor, became the biggest single donor after giving $2 million to Frontier Fairness PAC, an IEC that supported Democrat Mike Johnston in his primary race for governor. Johnston was the third-biggest vote-getter behind former state Treasurer Cary Kennedy and U.S. Rep. Jared Polis, who easily snagged that party’s nomination in June.

The second-largest single donor was Education Reform Now, a New York City think tank, which gave about $1.1 million to Raising Colorado, an IEC, to back candidates for the state legislature and other statewide races.

Among notable donors is the National Democratic Redistricting Committee, which is chaired by former U.S. Attorney General Eric Holder and former president Barack Obama.  NDRC gave a total of $400,000: $200,000 to Good Jobs Colorado, an IEC that supports Democratic governors candidates, and $200,000 to Coloradans for Fairness, an IEC that supports Democratic candidates for the state Senate.

The Independent sorted donors into categories to determine what industries or groups are the heaviest hitters. The categories raising the most cash are:

  • Partisan groups tied to a political party. Of these, the Republican Governors Association made the largest contribution of $1 million to the Republican Governors Association Colorado PAC, an IEC that supports Walker Stapleton.
  • Ideological donors with issue-driven agendas. Bloomberg, for example, is supporting candidates who share his views on gun control and education reform. Women Vote!, a project of Emily’s List – a group backing women candidates – is the second-largest ideological donor after Bloomberg with a total donation of $800,000 in support of Kennedy.
  • Education-oriented groups. The largest of these was Education Reform Now.
  • Wall Street. Reid Hoffman, a partner at Greylock Partners, a Silicon Valley venture capital firm, and co-founder of LinkedIn, gave the most at $1 million to Frontier Fairness, an IEC that put its resources behind Johnston.

The top four special interest groups are closely followed by energy companies, environmental groups, and alcohol and tobacco interests. Energy and oil and gas companies have contributed at least $1.4 million to both IECs and 527s. For example, Extraction Oil & Gas, a major Colorado oil producer, gave a total of $332,000 to mostly pro-Republican 527s and IECs, such as the Senate Majority Fund, Values First Colorado and Better Colorado Now.

The industry’s rivals, environmental groups, have donated almost $1 million to super PACs. This total includes $600,000 from the Sierra Club to the Sierra Club IEC, which supports pro-conservation gubernatorial, state legislative, and district attorney candidates.  Also, Environment America, based in Washington D.C. with a Colorado office, gave a total of $175,000 to Our Colorado Values and Coloradans for Fairness, both 527s which support Democrats for state races.

Eric Sondermann, an independent political analyst, attributes the millions going to super PACs in part to “the extremely, and some would say absurdly, low contribution limits that Colorado has as a result of so-called ‘campaign finance reform’.”

These super PAC-type groups emerged in the aftermath of Amendment 27, the Colorado campaign finance ballot measure in 2002.  Amendment 27 prohibited direct donations from unions and corporations and limited the size of contributions to candidates to a maximum of $1150 for state races and $400 for legislative races.

Colorado’s contribution limits are some of the lowest in the nation — slightly higher than Alaska’s and Montana’s, which have the lowest funding limits, according to the National Conference of State Legislatures.

“So the amount of money that I, or you, can donate directly to a campaign is so limited. But if you go the ‘independent’ route, that’s virtually unlimited,” Sondermann says.

The difference in hard-side contributions (those given directly to a campaign) and soft-side donations (those given to super PACs) is vast: the average 2018 donation of $9,000 to 527 and independent expenditure committees is 30 times higher than the $300 average donation made directly to candidates.

Contribution limits aside, CSU’s Duffy says organizations might also choose to donate indirectly if they don’t want to lose business or trigger other backlash by calling public attention to their political leanings.

“If you’re a business owner, you have customers — Democrats and Republicans — and you don’t want to piss them off, that’s one reason,” he says. “You don’t want to leave any fingerprints, and you could have a million reasons why you don’t want to leave any fingerprints on it.”

One of the main ways that 527s and IECs can influence elections is through advertising. For example, Coloradans for Fiscal Responsibility, an independent expenditure committee that backed Republican gubernatorial candidate Walker Stapleton, paid for TV ads that attacked the conservative track record of his primary opponent, Victor Mitchell.

On the Democratic side, Teachers for Kennedy, an IEC that favored Cary Kennedy, paid for controversial ads challenging Polis’s record on education.

According to Eric Sondermann, this practice can be a problem for candidates.

“Candidates lose control of their own campaigns and their own destiny because so much of the resources of politics go through these ‘independent groups’ that have their own semi- or quasi-independent messages,” he says.

In April, state Rep. Mike Weissman and state Sen. Stephen Fenberg, both Democrats, proposed a “Stand By Your Ad” act to expand disclosure rules for advertisements. It passed in the House and failed in the Senate.

Beyond how ads affect candidates, Peg Perl, former special counsel to the transparency-minded group Colorado Ethics Watch, says that special interest groups can define the issues of the race and what candidates have to talk about by pouring money into ads about certain issues. And, she adds, the priorities of special interests may not be the priorities of voters. 

“If you’re feeling frustrated that your government isn’t passing the kind of laws that you want them to do, or they’re not doing the kind of policy that helps you or your community,” Perl says, “you want to know, ‘Who are they helping?’ and ‘Why are they helping someone else other than me?’”

The fix, Perl says, is a few changes to disclosure regulations like requiring a contact or top donors to be listed on advertisements – measures that would make a donor’s role clearer to voters on mailers and advertisements.

“You cannot ban outside money,” Perl says, “but you certainly can make sure voters know who is trying to influence their votes.”

Burt Hubbard contributed to this report

3 COMMENTS

  1. Overall, a good and insightful article, highlighting the ongoing special interest auction masquerading as an election.

    One omission and one irony stand out.

    The omission? The state’s campaign finance reporting database does NOT include significant amounts of spending to influence elections by so-called “social welfare” organizations. These tax-exempt 501c4 entities have become the “dark money” vehicle of choice for large, undisclosed contributions and spending to influence elections, fully outside state & federal disclosure laws.

    Only significant effort and due diligence (and extensive court battles) have unmasked such “stealth” campaign organizations.
    For example, ex-Congressman and 2-time failed gubernatorial candidate Bob Beauprez’s ‘Colorado Pioneer Action’ 501c4 was found guilty of violating state campaign finance disclosure laws only after a nearly one-year court battle – which he lost:
    https://campaignintegritywatchdog.org/?p=201

    The irony?
    Quoting the defunct partisan failure ‘Colorado Ethics Watch’ counsel Peg Perl, who advocated and testified AGAINST upholding accountability in Colorado campaign finance law (including pushing exemptions on disclosure requirements for lawyer/attorney special interests) on ” transparency.”
    Perl testified in favor of the “lawyer loophole” legislation rammed through the 2018 session by repeat violator Bob Gardner – shortly after a group Gardner had formed was found guilty of disclosure violations by the Colorado Supreme Court.
    Perl is herself a candidate for elective office, as well – a fact that should have been disclosed in the article.

  2. It would be interesting to see a breakdown in funds devoted to various parties, candidates and issues/initiatives. Perhaps the visualization could be balloons, sized by amounts, with strings/ropes/chains and other attachments going to those the balloon is trying to lift.

    I’m also curious to know what the money is purchasing. Is there a way to distinguish money paid for television/radio/newspapers, on-line advertising, petition or candidacy signature gathering, and canvassing or other staff?

  3. This is the biggest problem we have in this country. it eclipses all other problems, and it’s what keeps us from EVER being able to fix the things that we should. Private money in elections is the single biggest issue that NO ONE is discussing. How is what we are doing now ANY different from bribery? It’s the DEFINITION of bribery! The most money will ALWAYS get the biggest cut of the pie, regardless of how SMALL that need actually is.

    The SCOTUS has decided that money = speech, which is total BS. The two things are NOT the same, hence the two different words to describe them. It would be GREAT if I could pay my mortgage by going in every month and speaking some really great words at them, but that AIN’T going to happen. Money isn’t speech, money is money, and it corrupts anyone if you hand them enough of it. Speech doesn’t corrupt anyone, money can do it to anyone.

    Now add onto that the perfect storm of Citizens United, which makes it perfectly okay to hide money in certain places without telling anyone WHERE it came from. And is it ANY wonder that there is a real issue with where that money comes from? Rubles, anyone? Who is to know? You don’t have to tell anyone where it came from, so who CARES? Until it’s time to pay the piper, that is. And we’re paying that piper right now, I’m more than convinced.

    We have to remove ALL private money from elections. Not yours, not mine, not ANY rich person’s and certainly no corporation’s. This system of legalized bribery and corruption has GOT to come to and end, or ONLY those with too much money will ever have ANY say in this country. And they are sick and twisted people who do NOT like human beings and don’t give a damn about the country, either. They should be ONE vote, just like the rest of us, and that is NOT what’s going on anymore, if it EVER was. But until all the private money and therefore the undue access is removed from those with too much, then those of us on the lower side, the OTHER 99% will remain with NO representation and NO voice in our own country. Welcome to indentured servitude in a place that YOU are supposed to have a say in.

    This is the PROBLEM, NOT the solution.

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