By Marianne Goodland
THE COLORADO STATESMAN
Administrative Law Judge Robert Spencer has ruled in favor of Colorado Ethics Watch (CEW) regarding campaign finance violations committed by Clear the Bench Colorado (CTBC). Spencer’s ruling requires Clear the Bench to file as a political committee within 20 days of his Sept 22 ruling.
At issue are campaign contribution limits. Political committees are limited to accepting a maximum of $525 per contribution per two-year cycle. An issues committee, which is how CTBC is currently registered, can accept unlimited contributions.
CTBC was formed in April 2009; its purpose from the beginning has been to ask Colorado voters to vote against retention of four Colorado Supreme Court justices. CTBC Director Matt Arnold initially attempted to register it as a political committee, one that advocates for or against specific candidates. However, the Secretary of State’s office rejected the request on May 1, stating that CTBC’s purpose, judicial retention, was too vague and suggested that it might also fall under the definition of an issues committee.
Three days later, however, in an official letter to CTBC, the Secretary of State recommended CTBC re-file as a political committee, and to provide specific information on the judges CTBC would be supporting or opposing. The letter, according to Spencer’s ruling, did not mention the possibility of CTBC filing as an issues committee.
Arnold attempted to re-file CTBC as an issues committee, but he also sought advice from the Elections Division of the Secretary of State’s office as to what CTBC’s proper classification should be.
Arnold included in his e-mail to the Elections Division a draft registration form for CTBC to be an issues committee, with its purpose being to educate Colorado voters on their right to vote against retention of judges who CTBC said do not follow principles of the “rule of law.”
The Elections Division, after several discussions, recommended CTBC register as an issues committee, and accepted CTBC’s registration on June 9.
After that filing date, several campaign contributions came in that exceeded what a political committee could accept but not what an issues committee could accept. On May 5, 2010, CEW filed a complaint with the Secretary of State, alleging CTBC should have registered as a political committee, and that it had accepted two contributions that exceeded campaign finance limits. One contribution, $1,000, was from Michael Williams of Centennial, and two contributions for a total of $545 came from Wayne Litten of Englewood. Litten has since given another $10, and former CD 6 Republican candidate Wil Armstrong gave $1,000 on Aug. 3, bringing his total contributions during the election cycle to $1,525.
Spencer ruled in favor of CTBC on July 23 and awarded them attorney’s fees (more about that later). In his ruling, Spencer, said CTBC could not yet be a political committee because the justices had not filed for retention at the time of the original complaint. However, Spencer also noted that since the original complaint, three of the four justices had filed and he granted CEW permission to file a supplemental complaint. (The fourth justice, Chief Justice Mary Mullarkey, decided to retire.)
On Aug. 2, CEW filed its supplemental complaint. CTBC claimed as its defense that it was an issues committee, that CEW’s complaint was outside of the statute of limitations, and that CTBC had relied on a directive from the Secretary of State’s office that it should register as an issues committee. CTBC also alleged that CEW was collaborating with the Secretary of State’s office to bring forward the litigation, a defense known as “equitable estoppel.” The Secretary of State was not a party to the litigation; state law prohibits the Secretary of State, who has political party affiliation, from being a party in initial litigation over campaign finance violations.
In the meantime, CTBC also asked for emergency rulemaking from the Secretary of State, a request that was denied because the matter was in litigation.
A hearing on the supplemental complaint was held on Sept. 5, and Spencer ruled on Sept. 22 that CTBC was in fact a political committee and should register as one. The major purpose of CTBC, Spencer said, is to advocate against the retention of the three Supreme Court justices and that CTBC had made expenditures or accepted contributions in excess of $200 to do so, most notably, after Judge Michael Bender had filed his intention to stand for retention. Spencer pointed out in his ruling that issues committees deal with ballot questions, and that CTBC could not stretch the definition of a ballot question to include retention elections.
CTBC, in its defense, claimed that the definition of political committee did not fit because the statute applied only to committees working for or against the election of a candidate, not the retention of a candidate. Spencer rejected that argument in his ruling, noting that statutes refer to justices who seek retention as candidates for election.
Spencer also said he was not bound by the Election Division’s decision to accept CTBC’s registration as an issue committee.
As to the “equitable estoppel” defense, Spencer said CTBC failed to prove that CEW was an agent of the state. However, Spencer said, CTBC reasonably relied on the fact that the Elections Division accepted its registration as an issues committee. As a result, any sanctions against CTBC for the violations would be “inequitable and unduly harsh.”
Then there’s the matter of the legal fees. Normally, the winning party, CEW, is awarded their legal fees, but in this case Spencer had already awarded legal fees to CTBC on the initial complaint.
Spencer said that CTBC would win its legal fees that pertained only to the original complaint, not in its defense of the supplemental complaint. According to Luis Toro of Colorado Ethics Watch, CTBC has filed a motion to claim $21,000 in legal fees and will have to prove that those fees are all related to the first complaint.
Toro said this week that they were happy with the judge’s decision, noting that the judge rejected CTBC’s argument that they were only following the recommendation of the Secretary of State. Toro pointed out that the Secretary of State’s official rejection letter told CTBC to refile as a political committee and to include specific information on the judges CTBC opposed.
With regard to the equitable estoppel argument, Toro said Spencer’s ruling explained that the Secretary of State is required to refer campaign finance complaints to the administrative law judge, in order to keep the Secretary of State out of partisan politics and to insulate the Secretary of State from the enforcement process.
CTBC’s Arnold said this week that the ruling came as a “bombshell” and was “completely contrary to precedent and everything the Secretary of State has put out in the last year and a half. It’s a game changer in the final two minutes,” Arnold told The Colorado Statesman.
Arnold said he is consulting with his attorneys on whether to appeal Spencer’s ruling, but said he did not know whether he would have the time and resources to appeal. “It’s the right thing to do because it’s a very bad ruling,” he said.
Arnold explained that for Spencer’s ruling to make sense, there would have to be a separate committee for each one of the three Supreme Court justices, and that Spencer’s ruling ignored one-third of CTBC’s mission — its educational component — that citizens have a right to vote on judicial retention.
As to contributions accepted by CTBC, Arnold said that until it re-files as a political committee he believes its status as an issues committee is still valid. CTBC can continue to accept contributions that fall under the issues committee rules until it re-files, he said.