May 22, 2018

Colorado Court of Appeals: ALJ Properly Applied “Major Purpose” Test to Determine Whether Organization was Political Party

The Colorado Court of Appeals issued its opinion in Campaign Integrity Watchdog, LLC v. Colorado Citizens Protecting Our Constitution on Thursday, February 2, 2018.

Election Law—Campaign Finance—Major Purpose Test for Political Committee.

Colorado Citizens Protecting our Constitution (Colorado Citizens) paid for a radio advertisement that supported a candidate for state senate. Campaign Integrity Watchdog, LLC (Campaign Integrity) filed a complaint with the Colorado Secretary of State (Secretary) alleging that Colorado Citizens had not registered as a political committee as required by article XXVIII of the Colorado Constitution and the Fair Campaign Practices Act. Colorado Citizens and the Secretary moved for summary judgment before the administrative law judge (ALJ). Colorado Citizens argued it was not a political committee because it did not have the “major purpose” of supporting or opposing candidates. The Secretary added that it could not be a political committee because it did not make or receive contributions. The motions were denied.

Following a hearing on the merits, the ALJ found that Colorado Citizens’ spending on political candidates only accounted for little more than one-third of its total spending, while the majority of its spending involved political issues. He concluded it was not a political committee because it did not have the major purpose of nominating or electing political candidates.

On appeal, Campaign Integrity argued that the ALJ misapplied the major purpose test and erred in holding that Colorado Citizens was not a political committee.  The court of appeals first reaffirmed that the “major purpose” test was the correct test to be applied. To determine an organization’s major purpose, a court can (1) examine its central organizational purpose, or (2) examine the organization’s spending to determine whether the preponderance of expenditures are for express advocacy or candidate contributions. The court agreed with the ALJ that Colorado Citizens’ statement of its organizational purpose was unhelpful and that analyzing Colorado Citizens’ spending activity was the appropriate method. The court determined that the record supported the ALJ’s determination that the organization was not a political committee because, based on the amount of its spending on political advocacy for candidates, it did not have the major purpose of nominating or electing candidates.

Campaign Integrity also argued that when applying the major purpose test, the ALJ should have considered Colorado Citizens’ spending in a calendar year, instead of a consecutive 12-month period. The records the judge examined were those subpoenaed by Campaign Integrity. It was up to Campaign Integrity to provide the additional records if it had wanted the judge to consider them. In addition, there is no legal authority requiring a calendar year analysis.

Campaign Integrity further argued that the ALJ improperly excluded evidence from his analysis that Colorado Citizens had made $76,000 in candidate contributions during March and April of 2015. The Court found the judge did not err because there was no evidence regarding other expenditures made during that time period, so the record was incomplete as to Colorado Citizens’ total spending in those months. Moreover, even if the $76,000 were included, the total candidate spending would still have constituted less than 50% of Colorado Citizens’ overall candidate-related expenditures, or less than what would constitute the central purpose for which Colorado Citizens was created.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

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