Campaign finance in Colorado: Where’s the money?

By Marianne Goodland
THE COLORADO STATESMAN

Fliers in the door or mailbox, robocalls, radio or TV ads: If you’ve received these campaign pitches for any of roughly a dozen targeted legislative races — and they didn’t come from a candidate — most likely they can be tied to one person and most of them to one national progressive voter organization. Building on an established network of campaign organizations dubbed “The Colorado Model,” a coordinated assortment of outside groups has so far poured more than $6 million into winning key legislative seats across the state, swamping the spending on races that typically cost candidates a fraction of the sums being spent on their behalf.

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The names are all different. Accountability for Colorado. The Neighborhood Project. Twenty First Century Colorado. The Colorado Leadership Alliance. The Colorado Freedom Fund. Our Colorado Values. The Colorado Alliance for Working Families. Friends of America Votes. The Colorado League of Responsible Voters. Citizens for Integrity. All but the last two are 527 committees; the last two are issues committees.

All of them list the same registered agent: Julie Wells.

Wells is the bookkeeper for a network of 527 committees (a nonprofit organization named after a section of the tax code) and independent expenditure committees (IECs) that funnel money from donors to companies that do electioneering either in support of Democrats or against Republicans running for the state House or Senate. Wells also handles the books for two issues committee groups (and their IECs) that oppose the numbered amendments on this year’s ballot. Collectively, the 527s have raised $6.4 million for the Colorado legislative races; the issues committees have raised $796,400 for the battle against the numbered amendments, and a separate 527 raised $618,000 to influence the Dan Maes-Scott McInnis Republican primary. The totals do not include money received by the IECs, because those funds often originate with the parent 527s.

The three largest groups: Accountability for Colorado, The Neighborhood Project and Twenty First Century Colorado, plus the Colorado League of Responsible Voters, are all state partners in America Votes, and are part of an effort that its national spokesman says is a model for other states.

The history
If you’ve read the Adam Schrager-Rob Witwer book The Blueprint: How the Democrats Won Colorado, you already know much of the history.

Blueprint covered the Colorado Democracy Alliance (CoDA) and ProgressNow and their efforts in the 2004-2008 elections. The heir apparent to those organizations in 2010 is America Votes.

Washington D.C.-based America Votes is led by former state Sen. Joan Fitz-Gerald, D-Genesee. In 2004, she was part of the effort that propelled Democrats to capture control of the Colorado House and Senate, along with Ellen Golombek, then with the Colorado AFL-CIO. Golombek is now the director of America Votes Colorado. The non-profit is aligned with 300 state and nonprofit organizations to “advance progressive policies,” according to its website.

America Votes was formed after the 2004 election, when the progressive community “saw a lack of coordination” and glaring gaps or tremendous overlap in the outreach programs, according to spokesman John Neurohr.

The 2004 election marked a turning point for Colorado Democrats. Four philanthropists, known as the “Gang of Four,” put their financial resources into wresting control of the General Assembly into Democratic hands for the first time in more than four decades. The Gang of Four was made up of Rutt Bridges, Tim Gill, Pat Stryker and now-Congressman Jared Polis. The successful 2004 effort put Fitz-Gerald into the Senate President’s seat, its first and only woman to hold that distinction.

The Gang of Four didn’t give up after the 2004 election. The next step was CoDA, which in 2006 included 527 committees such as Citizens for Colorado, Coloradans for Life, Colorado Voter Project, Moving Colorado Forward and Main Street Colorado. All five, since terminated, listed Wells as their registered agent. One group, Main Street Colorado, listed as its purpose to inform voters about “state and local candidates with similar ideals.” In the case of Moving Colorado Forward, prior to being terminated it transferred $95,000, almost all of the money it had, to Twenty First Century Colorado.

CoDA is still in existence. It is now listed as one of the Colorado partners for America Votes. Colorado is listed as a “core state” on the America Votes website; Neurohr explained that Colorado has done a better job of coordination than most states, beginning with that 2004 election.

Fitz-Gerald told The Colorado Statesman this week that America Votes does “the ground game” and wants to hold onto the seats in Colorado. “People holding those seats right now are doing a wonderful job,” she said. “We’re up against a lot of dollars this year resulting from the [U.S. Supreme Court] Citizens United decision,” and as a result, “we have to be smarter.”

Fitz-Gerald said she cares very deeply about the House and Senate in Colorado, and the legacy of the hard work done by her and others in 2004, 2006 and 2008 to claim and keep it.

But it is no longer just Colorado that interests her. America Votes now has full partners in ten states as well as five affiliate states that are provided with technical expertise. The partner states are all battleground states, Fitz-Gerald said, such as Pennsylvania, Ohio, Florida and Michigan. “It’s usually the places where the election hangs in the balance, not ‘slam-dunk’ red or blue,” she said.

The America Votes table
Neurohr said coordination “is the goal” of the America Votes partnership.

“America Votes is providing coordination between these progressive organizations that wasn’t there before,” he contended, referring to activities in other states.

In Colorado, the partners, which include four of the committees fronted by Wells and 29 unions and progressive groups, meet to talk about what they’re working on, in part to avoid duplication of effort, with Golombek serving as facilitator. It is “the vehicle to create efficiencies” and to avoid overlap or duplication of effort, said Neurohr.

That’s obvious from the campaign finance reports filed by Wells, referred to by one right-leaning blog as “the liberal 527s’ favorite bookkeeper.”

As of Oct. 18, for the ten most active committees, Wells’ groups have brought in $7.8 million in contributions, with $7.42 million coming from so-called large donors­ — those who contribute $5,000 or more at a time. Some of the $7.8 million is money shuffled between committees and shows up more than once on balance sheets.

Seven of Wells’ 527 committees (including three of the four working with America Votes) are producing electioneering communications on state legislative races. As of Oct. 18, the seven groups have collected $6.4 million in cash and non-cash contributions toward that goal. That’s more than twice what the Gang of Four spent in 2004 in its first foray.

The finance reports show the level of coordination that results from having a seat at the America Votes table. While the 527s are all producing campaign materials supporting or opposing the same candidates, different groups handle different kinds of materials: one group pays for robocalls or door-to-door canvassing; another pays for the fliers that hang on those doors, or are mailed to voters; others buy TV, cable or radio ads. There appears to be no duplication of effort among the committees, at least as it pertains to the legislative races.

The donors
In 2010, Stryker and Gill are still among the biggest individual donors to Wells’ groups. Through Oct. 18, Gill has kicked in $300,000 to two of the committees focused on the House and Senate races (Accountability for Colorado and The Neighborhood Project). Stryker has put in $240,000 to the same two plus Twenty First Century Colorado. She also poured $108,000 into the Colorado Freedom Fund, the anti-McInnis committee.

But Gill and Stryker are by no means the biggest donors to Wells’ groups. That role has been taken over by unions; collectively, they’ve ponied up more than $3.26 million. The largest of those donors is the Colorado Education Association, which represents 40,000 state teachers. They’ve contributed $707,500, mostly through their Public Education Committee, a small donor committee. The CEA sits at the America Votes Colorado table.

Local and national unions tied to Colorado WINS, the largest union of state employees, have made substantial contributions: the American Federation of State, County and Municipal Employees (AFSCME) has put in $678,636; the American Federation of Teachers has kicked in $174,960; and Service Employees International Union (SEIU) put in $742,036. Colorado WINS has kicked in $2,000 in cash and $14,118 in non-cash contributions. They’re all partners at the America Votes Colorado table, too.

Another $160,500 has come from Coloradans for Civil Justice. The group was formerly a separate non-profit but was terminated a year ago. It is now part of the Colorado Trial Lawyers Association, which is also an America Votes Colorado partner and, according to Blueprint, a past CoDA member.

Philanthropists who fund Democratic causes around the country are also opening their wallets, many to The Neighborhood Project:
• Anne Bartley of San Francisco has contributed $10,000. She is president of the Rockefeller Family Fund and her husband, Larry McNeil, is director of SEIU’s Institute for Change, according to the opensecrets.org website.
• Floridian Christopher Findlater gave $10,000. He is a retired energy investor and former CEO of Cheyenne Exploration. Findlater is regarded as a big-time donor to Democratic causes and has made campaign contributions to Polis.
• Leslie Hanauer of Seattle gave $4,000. Her husband, Nick, was one of the first investors in Amazon.com. He also founded Avenue A Media, which he sold to Microsoft for $6.4 billion three years ago.
• Henry Scott Wallace of Bethesda, MD gave $6,000. He is co-chair of the Wallace Global Fund, which funds Democratic causes such as the Center for American Progress, Democracy Now and Common Cause.

And America Votes has kicked in $337,500 in cash and another $88,313 in non-cash contributions to The Neighborhood Project.

The three largest 527s as of Oct. 18, in terms of contributions, are The Neighborhood Project ($1.65 million), Accountability for Colorado ($1.725 million) and Twenty First Century Colorado ($1.867 million). All three are weighing in on the side of Democrats in legislative races. Twenty First Century and Accountability for Colorado are Wells’ oldest active 527 committees, both registered on Dec. 14, 2007.

One group that has funneled $77,000 to Wells’ groups this year is the Colorado Public Safety Fund, a 527 committee housed with the Colorado Professional Firefighters union. The fund was registered in 2009 and has taken in more than $88,000 in the last year. Almost all of that has landed in the 527s: Accountability for Colorado ($37,000); Twenty First Century Colorado ($35,000), and the Alliance for Working Families ($5,000), whose only purpose seems to be getting former Rep. Cheri Jahn, D-Wheat Ridge, elected to the Colorado Senate. The Alliance paid for printing mailers and fliers to support Jahn in July and August and was quiet until this week, when it reported $435,000 in contributions. That included $150,000 each from The Neighborhood Project and from AFSCME.

Another Wells group with an apparently singular purpose is the Colorado Leadership Coalition, which was registered as a 527 on Sept. 20. On that date, the committee took in $200,000 from Washington-based Education Reform Now; four days later the committee paid Media Strategies & Research $200,000 for TV ads supporting Sen. John Morse, D-Colorado Springs. It took in another $46,900, according to its Oct. 18 report, but hasn’t reported spending any of it yet.

Morse has been the biggest beneficiary of the 527s associated with Wells. The outside spending has dwarfed what the candidates themselves have raised and spent. For his own re-election, Morse has raised $145,940 as of Oct. 18. His Republican challenger, Owen Hill, has raised $105,273. But the Wells 527s and IECs have spent $715,281 on TV ads, mailers and door-to-door canvassing, either supporting Morse or opposing Hill. (Hill has also benefited from massive outside spending on his behalf; according to Morse, there have been at least 25 mailers attacking him in the past three weeks from the Hill campaign and at least four outside groups.) Morse said Republicans promised to raise $800,000 to unseat him this time, and that could put the total spending for all groups and the candidates on both sides at $2 million or more.

Morse said he was “glad” to see the ads, especially ones that used a “talking shoes” theme that had worked well in his first election bid four years ago. But he also said he was “bummed” by the first ad, which he said ended negatively. “Just like everyone else, I don’t like negative ads,” he told The Statesman.

The amount of money spent so far on his race by the pro-Morse 527s also didn’t make him happy. “I really hoped it wouldn’t be necessary, but at the candidate level we don’t raise enough money to do polling,” he said. “It has to mean I need $700,000 worth of ads. The good news is that if we need it, we’ve got it.” Morse predicted the race would be “way closer” than he said it should be.

Hill told The Statesman he hasn’t seen the TV ads that attack him or support Morse, but he has heard about some of them. But it’s the amount that’s being spent that he finds troubling. Noting how much he and Morse had raised on their campaigns, Hill said, “we’re spending less than a quarter of the messaging in this campaign. It’s not good for the health of our political dialogue.” Candidates now have less voice in their own campaigns than the independent groups that pay for the ads, and “I’m frustrated that outside groups with no connections to the candidates” are responsible for the majority of the messaging that’s being done in these races. Even worse, Hill said, “we have no control over these outside groups, yet their messaging is often attributed to the candidates. It undermines the [candidates] who are responsible for communicating what they stand for” and instead the candidates have to go “on the defensive about things they know nothing about.”

The money flow
One of the advantages of so many groups being connected, either through Wells or around the America Votes table, is that money easily flows from one group to another. For example, on Oct. 4, the Colorado Citizens’ Coalition was terminated as an active 527 committee. The coalition produced electioneering ads and did door-to-door canvassing to help elect Democratic candidates to the legislature in 2008. Days before its termination, the committee still had $33,384 in the bank. On Sept. 29, that money was transferred to The Neighborhood Project, which is doing the same work this year. The Neighborhood Project also got $18,000 to do research from two other 527s: Accountability for Colorado and Twenty First Century Colorado.

The three largest committees also have their own IECs, and money flows from the 527s to the IECs. The Neighborhood Project has pumped $157,029 into its IEC for literature and canvassing; Accountability for Colorado put $208,210 into its IEC; and a little more than one-third of the money raised by Twenty First Century Colorado, $678,003 out of a total of $1.867 million, went to its IEC (known as 21st Century to distinguish it from the 527). The Colorado Alliance for Working Families also has its own IEC; it has not yet reported any donations, although its parent 527 reports paying it $74,039.

Tracing where the IEC money went from there is a little more difficult. The IECs don’t show up in the Secretary of State’s TRACER database; the only records are found in the “documents” section of the website. Through Oct. 4, Media Strategies & Research got $352,681 from the 21st Century IEC to do radio ads on behalf of Sen. Gail Schwartz, D-Snowmass Village, and against her Republican challenger, Robert Rankin; and for TV or cable ads opposing Hill. Another $260,000 went to the IEC in August for TV ads supporting Morse in Colorado Springs. The last expenditure raises some eyebrows; the expenditure was recorded as being sent by Twenty First Century Colorado to its IEC on Aug. 11. However, the IEC was not registered until Aug. 16 and which vendor got the $260,000 is unknown. It is not documented with the rest of the IEC’s contributions on the website. The IEC for the Colorado Alliance for Working Families, as of Oct. 14, has spent $74,039 on TV ads and mailers, despite not reporting a single contribution.

The IEC for The Neighborhood Project was registered on Sept. 3 and got $138,047 the day before from its same-named 527. And like the $260,000 for the 21st Century IEC, the contribution from The Neighborhood Project to its IEC has not been reported to the Secretary of State by the IEC. According to the campaign finance report for The Neighborhood Project, the money was spent on door-to-door canvassing for 17 House and Senate candidates, but because the IEC did not file an expenditure report for those funds, where the money went is unknown.

It’s likely, however, that the money went to one of the companies that the 527s hire for these purposes: Grassroots Solutions of Minneapolis, or its affiliate, GRS Consulting (housed in the same office). GRS appears to handle the actual door-to-door work; Grassroots Solutions appears to be the business side, handling consultant services, travel and lodging. The company has made $583,045 from the 527s through Oct. 18. One such check, for $10,000, went to GRS on July 30 and was listed on the campaign finance reports as “advertising,” but what that money actually went for is unknown. Secretary of State spokesman Rich Coolidge said that it probably should have detailed what kind of advertising and for (or against) which candidate.

Another company making good money from the 527s this year is Gumbinner & Davies of Washington, D.C., which has received $710,235 (through Oct. 18) from four of the 527s and their IECs, primarily for design and production of campaign materials, and then either mailed or used for door-to-door canvassing operations.

Secretary of State Bernie Buescher told The Statesman this week that under Senate Bill 10-203, IECs have 48 hours to register once they’ve received a contribution. But there are a lot of groups that aren’t registering, and he’s spent a lot of time this week talking to people about that. He cited as an example Active Citizens Together (ACT), a non-profit founded by Douglas Bruce, who recently admitted in a deposition that ACT had spent $100,000 to $200,000 getting Amendments 60, 61, and 101 onto the November ballot. “I want to figure out who made expenditures, did they report and if they didn’t report, what’s the solution?” Buescher said. “Someone has to have investigative authority,” which he said could be embedded in his office, the Attorney General or an independent commission. The Colorado system, which relies on citizens filing complaints, “isn’t good enough,” Buescher said. “It takes a lot of money and ordinary citizens won’t do it.”

Buescher suggested criminal penalties, probably at a misdemeanor level, may be appropriate for those who repeatedly and willfully refuse to file campaign finance reports. To put teeth into such a law, Buescher said those who refuse to register or to provide the name of a live person who’s responsible for filing would not be allowed to buy TV or newspaper ads. It has First Amendment risk, Buescher admitted, but the courts have said the states can require disclosure and “I think we’d be okay. We have to figure out who’s cheating, how they’re cheating and to put in reasonable penalties for cheating.”

“Shadowy 527 groups”?
One of the Republican candidates that found himself the target of an ad from one of the 527s is Brian Vande Krol in House District 34, who is running against Democratic incumbent Rep. John Soper, D-Thornton. Last month, a mailer started showing up in the district from Accountability for Colorado. Vande Krol said three more have followed, all mentioning a Facebook post Vande Krol made on March 31 where he had said “yes” to a poll on the lawsuit filed by Attorney General John Suthers challenging the federal health care mandates. Vande Krol said the mailers have made “illogical leaps” in concluding that his survey response meant he would deny health care to children or adults with pre-existing conditions. “They’re blatant lies,” he told The Statesman.

Vande Krol said he has talked to about 6,000 voters in the district. Many have told him they see the ad as a false attack from a group that is not accountable, and he believes voters will ignore the mailers. Vande Krol said he knew Wells was the agent for the group but said he didn’t have time to “chase down shadowy 527 groups.”

But working on keeping the General Assembly in Democratic control is not all that Wells’ groups are doing this year. There are two new issues committees in the fight against Amendments 60, 61, 62 and 63 and Propositions 101 and 102: the Colorado League of Responsible Voters and Friends of America Votes, the latter which was registered on Oct. 14. Compared to the other 527 and IECs, the League is a much smaller player; through Oct. 18 it had raised $598,399. Most of its contributions are coming from America Votes partner unions that contributed $326,345 through Oct. 18. As of press time, Friends of America Votes listed no contributions or expenditures.

This week, the League reported its biggest donations so far: $198,000 from Citizens for Integrity — whose registered agent just happens to be Wells. Citizens for Integrity was registered as a 527 on Sept. 30. In its Oct. 18 campaign finance report, it showed contributions of $48,000 on Oct. 1 and $150,000 on Oct. 12 — from Citizens for Integrity. It then “sent” that money to the League on Oct. 1 and Oct. 12.

Political Science professor John Straayer of Colorado State University told The Statesman that the low limit on campaign finance donations for House and Senate races “magnifies the impact of big money. We’d be better off if the allowable donation limit was raised significantly,” Straayer said, adding that a higher limit would balance the outside money.

Materials produced by outside groups are the most negative, Straayer said, while materials produced by the candidates themselves tend to be more moderate. And the impact of the campaigns waged by outside groups carries over into the legislative session, he said. Newly elected legislators will look across the aisle and say, “those [guys] beat me up and I’m going to get even.” Straayer said the ill feelings “make it more difficult to let the air out of the hot balloon” and makes it harder for legislators from opposing parties to work with each other.

Straayer said one legislator told him that when she first got to the Legislature it was after a difficult race. When she got to the capitol it was “Ds and Rs”. But over the next three years, the legislator, who was a Republican, began to learn about her Democratic counterparts — backgrounds, values, and family life — and started to sponsor bills with them. The legislator, whom Straayer did not identify, said some of those Democratic legislators are still friends.

“Sharp-edged partisanship is more difficult to soften when you’ve been through a race where you’ve been savaged — and those outside groups run those hard-hitting, negative attack ads,” Straayer said.

The registered agent
So who exactly is Julie Wells? She was a lead plaintiff in the lawsuit against the City and County of Denver over its religious displays at the City and County Building in 1999, and is listed as the registered agent for the Freedom From Religion Foundation, which dates back to 1989. It appears that the lawsuit is the only thing she’s discussed with reporters — until this week.

Wells is a former executive director of the Colorado Women’s Bar Association, which she ran from 1994 to 1997 and from 2001 to 2002. She also was the registered agent for two campaigns for Denver Democrat Ken Gordon, one for the state Senate in 2000 and another when he ran for Secretary of State in 2006.

Wells hasn’t managed to file campaign finance reports — covering more than $7 million in contributions this year — without a few hiccups. In July, three of her committees — Accountability for Colorado, Twenty First Century Colorado and The Neighborhood Project — were each fined twice for late campaign finance reports. The $1,050 in fines, at $350 per committee, were waived by the Secretary of State.

Wells also has a long history of not answering phone calls or e-mails from reporters regarding the committees for which she handles the books. She lives on a quiet street in southeast Denver, where mailboxes sit at the end of the driveways. The imposing mailbox at the end of Wells’ driveway, however, stands out: it’s the only one with a lock.

Wells told The Statesman she only handles the campaign finance compliance for the groups. “I’m not at all involved with the strategy,” she said.

University of Denver Political Science Professor Seth Masket said these committees “are not exactly what we’d call transparent. It’s in these groups’ interest to make it not look like coordination or spontaneous giving,” he told The Statesman.

“There’s a few key individuals who are pulling the strings, but it’s not really a formal organization” according to Masket. Instead, he said, “it’s an informal network of people who we assume are leaders, but it’s surprisingly hard to pinpoint.”

Marianne@coloradostatesman.com