Legislative battle looms over Colorado disclosure laws

By David O. Williams
Real AspenDecember 1, 2010
Colorado Sen. Gail Schwartz was named chair of the Senate Agriculture, Livestock and Natural Resource Committee on Tuesday. That's exactly the kind of high-profile post the GOP was trying to keep her from when it smeared her with the “most tasteless” mailers of the most recent campaign cycle.

Meanwhile, the head of the conservative nonprofit behind the mailers maintained in an interview Tuesday that “we engaged in no electioneering or 527 activity and always follow the law.”

Colorado Sen. Gail Schwartz

Donald Ferguson, the group's executive director, clarified that the mailers featuring Schwartz’s face on Donald Trump’s body with the tagline “You’re Fired!” were paid for by the registered 501(c)4 “social welfare” nonprofit, Western Tradition Partnership (WTP), not an associated 527 group called Western Tradition Partnership Education Fund. Under federal law, 501(c)4 groups are allowed to engage in political activity up to 50 percent of the nonprofit’s overall purpose, with very few disclosure requirements in terms of funding. There are more stringent requirements for 527 groups in Colorado.

Ferguson also said Western Tradition Partnership Education Fund, registered to an attorney with Colorado Secretary of State-elect Scott Gessler’s law firm, Hackstaff Gessler of Denver, did not engage in any political activity this year.

The office of current Colorado Secretary of State Bernie Buescher, a Democrat, could find no evidence of an independent expenditure or electioneering report filed by Western Tradition Partnership in Schwartz’s hard-fought state Senate District 5 (Aspen area) campaign, which Schwartz narrowly won.

Schwartz, a Snowmass Democrat, and the election watchdog group Colorado Ethics Watch are looking into whether that constitutes a campaign violation and twarrants a formal complaint with the secretary of state. Ethics Watch director Luis Toro yesterday said his organization is still investigating the matter.

Critics say WTP is a coal, oil and gas industry front group targeting Democrats and moderate Republicans who favor alternative energy. On its website, the group characterizes such politicians as “Gang Green” and says it’s “dedicated to fighting environmental extremism.”

Schwartz was instrumental last legislative session in passing the second highest renewable energy standard (RES) in the nation (30 percent by 2020) and the Clean Air Clean Jobs Act, which converts coal-fired power plants to cleaner-burning natural gas. WTP claims those measures will kill high-paying traditional energy jobs.

State Sen. Morgan Carroll last week said that Western Tradition Partnership has been “one of the worst actors” in Colorado politics the last several years, contributing to conservatives 527 groups and hiding behind the cloak of its 501(c)4 nonprofit status.

Named chairwoman of the Senate Judiciary Committee on Tuesday, Carroll said she will pursue a bill to make Colorado the first state in the nation to compel 501(c)4 nonprofit “social welfare” groups to divulge donors contributing to political activity.

“This is simply an attempt by incumbent politicians to silence dissent and deny Coloradans their constitutionally guaranteed right to petition their elected officials,” Ferguson wrote in an e-mail.

Donald Ferguson

“WTP has been forced on more than one occasion to take these kind of officials to court to enforce the law and our constitutional protections,” he added. “Courts have always ruled in our favor for one simple reason — the law and the Constitution are on our side.”

Carroll said she is close to figuring out how the state could compel disclosure of donors whose funds are earmarked for political activities, so that even if a 501(c)4 is “mixed-purpose” — with half of its activities falling under social welfare — the political lobbying side would be subject to public scrutiny. That way the first amendment protections afforded the legitimate social welfare side of the operation would be kept in place.

“One of the things that we have seen out of this election cycle is … I am just going to use the word laundering,” Carroll said last week. “There were a lot of layers of C4’s that were created for purely political purposes and then the C4 would donate to a 527.”

Carroll championed a bill in 2007 that compelled 527 groups to disclose donors and expenditures.

State Sen. Morgan Carroll

“The whole point of that bill that I carried was that you could see the money in and the money out of the 527,” Carroll said. “Well, they will have the good government C4 gave to the 527 and the limited government C4 will give to the 527.”

Carroll argues citizens would then be able to see what groups are behind a particular ad campaign and make informed voting decisions accordingly.


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