May 22, 2019

Colorado Court of Appeals: Costs of Defending Lawsuit Not Campaign Expenditures

The Colorado Court of Appeals issued its opinion in Campaign Integrity Watchdog v. Coloradans for a Better Future on Thursday, April 7, 2016.

Reporting Contributions and Spending—Fair Campaign Practices Act.

In 2012, Arnold lost the Republican primary election for University of Colorado Regent to Davidson. During the run-up to the election, Coloradans for a Better Future (CBF) purchased a radio advertisement supporting Davidson and other radio advertisements unfavorable to Arnold. After the election, Arnold, and later Campaign Integrity Watchdog (CIW) with Arnold as its principal officer, filed a series of complaints with the Colorado Secretary of State (Secretary) alleging violations of Colorado’s Fair Campaign Practices Act (FCPA). This is the third such complaint.

Specifically, CIW challenged CBF’s failure to report funds donated to CBF to pay Arnold’s court costs from an earlier case, arguing those funds were a contribution and spending and were incorrectly reported in CBF’s initial January 2014 contributions and expenditures report. The administrative law judge (ALJ) dismissed the complaint. The ALJ found that on January 22, 2014, CBF filed a contribution and expenditures report with the Secretary. Its report wasn’t due until May 5, but it intended to terminate its activities as a political organization and thus filed early. On the same day, CBF’s legal counsel sent an email to the Secretary seeking to amend the report to show that Colorado Justice Alliance (CJA) contributed $200.20 to pay Arnold’s court costs. The Secretary’s electronic reporting system didn’t allow the change to be made by CBF, and the Secretary’s staff couldn’t change the report either. CIW filed its complaint on March 3, 2014 and CBF’s report was publicly amended on March 6, 2014. The ALJ concluded that CBF had already reported the CJA contribution to the Secretary when CIW filed its complaint and that the complaint was premature because the report was not due until May 2014. The ALJ further concluded that the payment of Arnold’s court costs did not meet the FCPA definition of spending and did not have to be reported as such.

On appeal, CIW contended that the $200.20 CJA donated to help CBF satisfy its obligation to pay Arnold’s court costs was a contribution that was incorrectly reported on the initial report. Specifically, CIW argued that the ALJ (1) invented findings of fact, (2) misrepresented facts regarding CBF’s request to amend its report, and (3) erred in concluding the complaint was premature. As to the first argument, CIW failed to cite specific findings or record support; as to the second argument, the allegation concerned a question of law rather than fact; and as to the third argument, the court concluded the report was corrected on January 22, when CBF notified the Secretary of its mistake. CIW also argued that CBF violated the FCPA because it listed the payee of the $200.20 as the Denver District Court rather than Arnold; the court found this too insignificant to amount to a violation of the reporting law. Thus, the Court concluded that the ALJ did not err when he concluded CBF correctly reported the $200.20.

CIW also argued that the $200.20 CBF paid to Arnold constituted spending and should have been reported. The court found the funds were not “expended influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any state or local public office in the state,” and thus concluded they were not reportable spending.

CIW’s request for costs and fees was denied. CBF’s request for attorney fees was denied, but its request for costs was granted.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

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