SoS Gessler seeks to limit ethics probe

Secretary of state narrowly avoids legislative audit after partyline vote
The Colorado Statesman

Attorneys for Republican Secretary of State Scott Gessler on Wednesday filed a lawsuit seeking to limit a probe by the Independent Ethics Commission into whether he misspent public dollars. Just one day earlier, the secretary narrowly escaped an audit of his office’s use of discretionary funds after the Legislative Audit Committee tied on a vote to authorize the investigation.

The vote came after Gessler was accused of misappropriating taxpayer dollars to attend a Republican National Lawyers Association event in Sarasota, Fla. at the time the Republican National Convention was taking place in Tampa, Fla.

State law prohibits expenditure of state funds for anything other than “official state business purposes only.” The same applies for discretionary spending, though it is at the prudence of elected officials.

Gessler was reimbursed through his office’s discretionary fund for what has been recorded as “RNLA/RNC Trip, Sarasota and Tampa Bay.” The trip took place from Aug. 23-Sept. 1.

Gessler lodged at the luxurious Ritz-Carlton Hotel in Sarasota, and following meals and airfare, the cost was $1,453. The secretary said he was forced to return to Denver a day early from the trip due to a threat to his family. The cost was $422.

Left-leaning Colorado Ethics Watch filed a complaint against Gessler with the bipartisan Independent Ethics Commission, producing records showing the possible misuse of discretionary fund dollars. Based on the findings, the Legislative Audit Committee raised the possibility of initiating a separate investigation into Gessler’s use of discretionary dollars, led by State Auditor Dianne Ray.

But the committee on Tuesday morning deadlocked on a 4-4 vote, killing the proposal that was first raised in October by Sens. Lois Tochtrop, D-Thornton, and Pat Steadman, D-Denver. Republicans accused the senators of initiating a partisan witch hunt against the conservative secretary, but Tochtrop attempted to debunk those claims.

“The concern was the possible misuse of funds…” Tochtrop told the committee. “I think some of the folks seem to think that this is partisan, but in my opinion it is not… I would be concerned if it was the governor, or anybody else in public office, or even any of us…

“We have a high public trust as elected officials, and I think we need to make sure that we follow that… and we also have a low rating many times as politicians… sometimes our rating is lower than… a used car salesman. So, I think that we want to elevate that public trust…” Tochtrop continued.

But audit committee member Sen. Steve King, R-Grand Junction, believes the proposed investigation offered Democrats an opportunity to assail the Republican secretary. Democrats have relentlessly bashed the secretary for a range of issues, including disenfranchising inactive voters — or voters who failed to cast a ballot in the previous even-year general election — and for targeting suspected undocumented immigrants who may be voting.

After questioning a staff member with the auditor’s office, King pointed out that the audit would cost up to $150,000 to investigate a $5,000 discretionary fund.

“It is hard not to look at this from the point of view of piling on, and I have a serious concern about the use of taxpayer money,” exclaimed King. “It is not a cost effective way to deal with this issue…

“I worry about opening the door for this committee to be used in a way that is not cost effective to the taxpayers,” he continued.

King also pointed out that both the Independent Ethics Commission and the Denver District Attorney’s Office are currently investigating Gessler for the possible misuse of funds. The audit would not have even been able to take place until after those investigations ended, added King.

“I wonder if it wouldn’t be more appropriate from a cost effectiveness standpoint to table this until the completion of the ethics committee and the district attorney’s investigation,” he suggested.

King later made a motion to delay the audit, but that failed on a tie vote. In the end, however, Republicans were victorious after the committee also deadlocked on the vote to authorize the audit. All four Republicans voted “no,” and all four Democrats voted “yes.”

Gessler files lawsuit

The following day, prominent lawyers David Lane, Robert Bruce and Michael Davis filed a lawsuit in Denver District Court seeking to prohibit the Independent Ethics Commission from proceeding with its Gessler investigation in “excess of their limited jurisdiction.”

The lawsuit argues: “The Colorado Independent Ethics Commission has exceeded its jurisdiction granted to it by Amendment 41… The commission has done this by asserting broad jurisdiction over an ethics complaint against the secretary, which cites potential violations of three criminal statutes, and does not relate to Amendment 41’s gift ban, lobbying ban, or influence peddling.”

Gessler is facing allegations of embezzlement, official misconduct and falsely altering a public record. His attorneys believe the commission could potentially be investigating a criminal matter, which would fall outside its jurisdiction.

The lawsuit also states: “The secretary will suffer irreparable harm, as the commission has brought him in before the tribunal, subjected him to evolving and unconstitutional procedures, and forced him to respond to criminal… allegations over which the commission clearly has no jurisdiction. This illegal assertion of jurisdiction also has harmed or will harm the secretary’s reputation and his ability to carry out his official duties as he sees fit.”

Rich Coolidge, Gessler’s spokesman, was careful to point out that the lawsuit does not seek to block the ethics probe.

“The lawsuit was to protect the secretary’s rights,” said Coolidge. “The IEC still has not specified any specific allegations against the secretary, and it’s going well beyond its authority to investigate ‘influence peddling’ as defined by case law.”

Jane Feldman, director of the IEC, declined comment.

Luis Toro, director of Colorado Ethics Watch, believes the lawsuit does not correctly interpret Amendment 41.

“His lawyers ignore plain language of Amendment 41 that authorizes the IEC to look into any ethical issue involving ‘any other standard of conduct’ under state law,” opined Toro. “The IEC’s jurisdiction goes beyond gift ban or revolving door allegations. We expect the attorney general to provide a vigorous defense so that this suit can be quickly dismissed.”

Legal defense fund

But there could be a conflict of interest emerging after Republican Attorney General John Suthers’ office sent a letter to the IEC officially recommending that its members approve Gessler’s request for a legal defense fund. Gessler has requested the fund to assist with costs related to the criminal investigation by the Denver DA’s office.

The AG’s office normally represents the IEC, but because it has weighed in on the issue, a conflict may arise.

Gessler’s attorneys in the ethics probe are being paid through funds from the Department of State’s legal budget. But he must spend his own money to fight any criminal charges. The Department of State has asked the ethics commission for guidance on whether it would be appropriate for Gessler to establish a legal defense fund to fight the criminal allegations.

The Independent Ethics Commission won’t officially release its opinion until Feb. 4. But it released a draft opinion in favor of allowing the legal defense fund, according to documents obtained by The Colorado Statesman.

Normally drafts of advisory opinions are not released to the public prior to the commission’s official presentation. But Colorado Ethics Watch filed a Colorado Open Records Act (CORA) request seeking the draft opinion.

Because the attorney general’s office submitted a letter in support of the advisory opinion request, the AG’s office is disqualified from representing the Independent Ethics Commission out of fear of a conflict of interest. That left the commission without public counsel, and there was not enough time to hire private counsel to address the CORA request, which must be answered in three days.

“It was the fact that the commission was unrepresented on this matter, and we could not have hired counsel and brought them up to speed in three days,” Feldman explained of releasing the draft opinion ahead of the official presentation.

Deputy Secretary of State Suzanne Staiert had also requested the draft opinion ahead of time, declaring that her office would file a lawsuit against the commission if it did not release the documents.

“You are required to provide me with a sworn statement specifically describing each document withheld, explaining why each such document is privileged and why disclosure would cause substantial injury to the public interest,” Staiert argued in a letter to Feldman.

Feldman wrote back: “After discussing the matter… the commission has decided to release those documents this time. This decision is largely based on the fact that the commission is without legal representation on this matter, and therefore will not be able to defend itself within the appropriate time frame. The commission continues to believe that these matters are privileged.”

Allison McGee Johnson, spokeswoman for Ethics Watch, believes the threat of lawsuit by the secretary’s office is a disservice.

“Gessler used bullying tactics on the IEC and it seems to be backfiring on him, because the privileged documents released by the IEC based on threats from his office show the weakness of his case for a legal defense fund,” said Johnson.

In the draft, the commission opines in favor of allowing Gessler to establish the legal defense fund, stating: “It would not be a violation of Colorado Constitution… for a public officer to establish a legal defense fund and to allow a trustee to solicit funds to defray costs for defending a criminal proceeding against the officer. Neither the officer nor the trustee may solicit funds from professional lobbyists or others doing business with the agency. Contributions to this fund, including both the name of donors and the amount of the donation must be publicly disclosed.”

But Johnson points out that the commission focused mostly on the argument that a criminal investigation should be considered a “special occasion.” She said the commission rejected many other arguments.

“The drafts… show a commission ready to reject every argument presented by Deputy Secretary Staiert with the possible exception of the argument that a criminal investigation should be considered a ‘special occasion’ that would allow Secretary Gessler to accept gifts of unlimited size from close friends and relatives,” declared Johnson.

In fact, in its conclusion, the commission opines that the legal defense fund should be considered on a case-by-case basis.

“The commission cautions public officials and employees that this opinion is based on the specific facts presented in this request, and that different facts could produce a different result,” states the draft advisory opinion. “The IEC therefore encourages individuals with particular questions to request more fact-specific advice through requests for advisory opinions and letter rulings.”

Ethics Watch is also encouraged by a dissent offered by Commissioner Dan Grossman, a former Democratic state senator from Denver. In his opinion, the legal defense fund would violate state law because it would allow gifts over $53, which violates voter-approved Amendment 41.

“It is beyond reasonable dispute that contributions to a legal defense fund for a public official will inure to the personal benefit of the public official…” writes Grossman. “The Secretary of State’s contention that contributions to his legal defense fund should be excepted from the gift ban because being charges with a crime constitutes a special occasion is far-fetched…

“Even if a criminal prosecution can be shoe-horned into the special occasion exception, [state law] specifically limits the exception to gifts from relatives and personal friends of the recipient. All other contributors must be limited to gifts of $53 and registered professional lobbyists must be precluded from contributing at all…” continued Grossman.

“Should the Secretary find himself charged with committing a crime, the costs of his defense are appropriately his to bear,” he concluded. “He should not be permitted to use his status as a public official to raise money for his defense…”

The Independent Ethics Commission had planned on releasing on Feb. 4 its findings in the ethics investigation. But the commission will delay releasing the report until after a court hearing pertaining to the lawsuit.

Peter@coloradostatesman.com