The Colorado Court of Appeals issued its opinion in Gessler v. Grossman on Thursday, May 7, 2015.
Breach of the Public Trust—Discretionary Fund Statute.
In August 2012, Colorado Secretary of StateGessler traveled to Florida to attend and present at a two-day program sponsored by the Republican National Lawyers Association (RNLA). The RNLA seminar ended during the day on August 25, and Gessler stayed an additional night at an increased hotel rate and at the state of Colorado’s expense. The next day, he traveled to a different Florida city to attend the Republican National Convention (RNC).
Gessler used his statutorily provided discretionary fund to pay the $1,278.90 in documented travel and meal expenses incurred at the RNLA seminar. In addition, he requested reimbursement of “any remaining discretionary funds” in his discretionary account. He did not provide any documentation, but ultimately received $117.99 as the result of the request.
Colorado Ethics Watch filed a complaint with the Independent Ethics Commission (IEC). It alleged that Gessler had made false statements on travel expense reimbursement requests and misappropriated funds for personal or political uses. The IEC found that Gessler spent $1,278.90 of his discretionary account primarily for partisan—and therefore personal—purposes, in violation of the discretionary fund statute’s requirement that the fund be used in pursuit of official business. Gessler similarly violated the statute by requesting and receiving the balance in his discretionary fund without any documentation. Together, these constituted a breach of the public trust for private gain, in violation of the public trust statute, CRS § 24-18-103. Gessler sought judicial review of the IEC’s findings based on several assertions, each of which the district court rejected in a thorough written opinion.
On appeal, Gessler argued that Colo. Const. art. XXIX, § 5 applies only to gifts, influence peddling, and standards of conduct and reporting requirements that expressly delegate enforcement to the IEC. The Court of Appeals disagreed, noting that § 5 gives the IEC authority “under any other standards of conduct and reporting requirements as provided by law.”
Gessler also argued that the public trust statute does not fall within the ambit of § 5 because it is “hortatory” only and does not provide a specific standard of conduct. The Court disagreed. It found that the statute sets forth specific standards of conduct. It also noted that Colo. Const. art. XXIX, § 6 provides an express remedy for violations of the public trust for private gain.
Gessler contended that the discretionary fund statute does not fall within the ambit of § 5. The Court rejected Gessler’s premise that Article XXIX excludes standards of conduct related to compensation. It also noted that even if compensation were excluded from the IEC’s jurisdiction, the discretionary fund statute does not constitute compensation. Discretionary funds are not received in return for services rendered but may only be used “in pursuance of official business.” It also rejected Gessler’s argument that he had unfettered discretion over the use of discretionary funds as leading to an absurd result, as well as rejecting Gessler’s claim that there is no specific standard of conduct for expenditure of the funds. The Court pointed to the requirement that those funds be used “in pursuance of official business.”
Gessler also argued that the IEC had construed its jurisdiction so broadly as to render § 5 vague and overbroad. The Court rejected this contention by noting it had construed § 5 so as to recognize the applicable limits to the IEC’s jurisdiction.
Gessler contended that if the IEC had jurisdiction, then its decision was arbitrary or capricious. The Court disagreed, finding substantial evidence in the record to support the IEC’s determination that Gessler improperly used his discretionary fund to attend the RNLA seminar and the RNC.
Finally, the Court rejected Gessler’s argument that he was denied procedural due process because he was not given advance and adequate notice of the standards of conduct he was accused of having violated. The Court found that Gessler had received ample notice of the claims asserted against him and, in any event, there was no support for any claim of prejudice to Gessler as a result of the notice he received. The judgment was affirmed.