of Administrative Courts Case No. OS 2014-0008
Matthew Arnold, Denver, Colorado, Authorized Representative
of Campaign Integrity Watchdog
Cynthia H. Coffman, Attorney General, Frederick R. Yarger,
Solicitor General, Matthew D. Grove, Assistant Solicitor
General, Denver, Colorado, for Amicus Curiae
ORDER AFFIRMED IN PART, REVERSED IN PART, AND CASE
REMANDED WITH DIRECTIONS
1 This is the fourth in a series of complaints brought by
claimant, Campaign Integrity Watchdog (CIW), or its principal
officer, Matthew Arnold, against Coloradans for a Better
Future (CBF), a political organization under section
1-45-103(14.5), C.R.S. 2015, to challenge CBF's alleged
failure to report contributions and spending. In 2012, Arnold
lost the Republican primary election for University of
Colorado Regent to Brian Davidson. During the runup to the
primary election, CBF purchased a radio advertisement
supporting Davidson and other radio advertisements containing
messages unfavorable to Arnold. After the election, Arnold,
and later CIW with Arnold as its principal officer, filed a
series of complaints with the Colorado Secretary of State
(Secretary) alleging violations of the Fair Campaign
Practices Act (FCPA).
2 CIW now appeals the decision of the administrative law
judge (ALJ) concluding that no reporting violations for both
billed and donated legal services had been established on the
part of CBF. Specifically, CIW challenges CBF's
spending on legal fees in 2012 and 2013, as well as donated
legal services in 2013 and 2014. We affirm in part, reverse
in part, and remand to the ALJ for further proceedings.
3 CIW appeals the rejection of its fourth complaint against
CBF. In the first complaint, Arnold v. Coloradans for a
Better Future, No. OS 2012-0024 and No. OS 2012-0025
(O.A.C. Jan. 11. 2013), the ALJ imposed a penalty of $4525
for CBF's failure to report certain electioneering
4 In the second complaint, Arnold v. Coloradans for a
Better Future, No. OS 2013-0007 (O.A.C. Dec.
26, 2013), Arnold alleged that CBF did not report in April
2013 the legal services it received to defend the first case
as either contributions or expenditures. An ALJ found that
Arnold did not prove any violation because there was no
evidence that CBF paid for legal services as part of any
express advocacy. A division of our court affirmed in
Arnold v. Coloradans for a Better Future, (Colo.App.
No. 14CA0122, Feb. 5, 2015) (not published pursuant to C.A.R.
5 In the third complaint, Campaign Integrity Watchdog
v.Coloradans for a Better Future, No. OS 2014-004
(O.A.C. Feb. 25, 2015), CIW alleged that CBF failed to
accurately report contributions it had received and expenses
it had incurred to pay Arnold's court costs from an
earlier case. The case was continued pending CBF's
response to a subpoena duces tecum.
6 In the fourth and present case, CIW alleges that CBF did
not report in April 2013, July 2013, October 2013, and
January 2014 legal services it had received as either
contributions or spending. An ALJ held a hearing on September
2, 2014, at which CBF did not appear. Nevertheless, the ALJ
found in favor of CBF.
7 CBF did not file an answer brief in this appeal, but the
Secretary filed a brief as amicus curiae in support of the
8 We ordered CIW and the Secretary to show cause why we
should not dismiss the appeal as moot. The record indicates
that CBF was terminated as a political organization on March 6,
2014 (before the ALJ issued his decision), and it was not
clear to us that there was any practical relief that we could
afford the organization if CIW were to prevail on appeal.
Accordingly, we must first address whether this appeal is
9 A political organization may only terminate by filing a
termination report if the organization's
TRACER account has a zero balance, indicating
that it has no cash or assets on hand and that there are no
outstanding debts, penalties, or obligations. Dep't of
State Reg. 1505-6, 8 Colo. Code Regs. 1505-6:12.
10 We normally refrain from addressing issues that have
become moot because any opinion would not have a practical
effect on an alleged controversy. Trinidad Sch. Dist. No.
1 v. Lopez By & Through Lopez, 963 P.2d 1095, 1102
11 CIW contends that to conclude that a political
organization that had filed a termination report could not be
sued would lead to the absurd result that entities which were
potentially liable for violating the FCPA could escape
accountability by "terminating." We agree. Although
CBF terminated its existence as a political organization
before CIW filed its fourth complaint, we conclude the appeal
is not moot.
12 The primary campaign finance law in Colorado is Article
XXVIII of the Colorado Constitution, which was approved by
the voters in 2002. Article XXVIII imposes contribution
limits, as well as reporting and disclosure requirements, and
creates an enforcement process for violations of its
provisions. Colorado also has the FCPA, §§ 1-45-101
to -118, C.R.S. 2015, which was originally enacted in 1971,
repealed and re-enacted by initiative in 1996, substantially
amended in 2000, and again substantially revised by
initiative in 2002 as the result of the adoption of Article
XXVIII. The Secretary further regulates campaign finance
practices. See Dep't of State Reg. 1505-6, 8
Code Colo. Regs. 1505-6.
13 Neither the regulations nor the Colorado Campaign and
Political Finance Manual, a manual produced by the Secretary
which provides guidelines for proper compliance with campaign
finance laws in Colorado, permits an entity to avoid
potential liability for campaign finance violations by filing
a termination report. See Colo. Sec. of State,
Colorado Campaign and Political Finance Manual 34-35
(rev. July 2015), https://perma.cc/D792-UDVK; see
also Dep't of State Reg. 1505-6, 8 Code Colo. Regs.
1505-6:4.4 (issue committees); 1505-6:12.3 (committees
generally); 1505-6:18 (application penalties and violations
for failure to comply). While the regulations and the manual
only apply the term "terminate" to candidates,
candidate committees, and issue committees, the Secretary has
applied "terminate" to political organizations, and
we will do the same.
14 The Secretary notes that he routinely refers complaints
filed against terminated entities to the Office of
Administrative Courts (OAC), and the OAC typically resolves
those cases on the merits. Indeed, section 9(2)(a) of article
XXVIII states that "[a]ny person . . . may file a
written complaint with the secretary of state no later than
one hundred eighty days after the date of the alleged
violation" and makes no distinction between active
entities and terminated ones. While penalties imposed against
a terminated political organization may prove difficult to
collect, they are not mooted by a political
organization's termination. Cf. W. Spring Serv. Co.
v. Andrew, 229 F.2d 413, 420 (10th Cir. 1956) (under
Colorado law, judgment against dissolved partnership is
permissible). Concluding the appeal is not moot, we turn to
the merits of the appeal.
Interpretation of Article XXVIII and FCPA
15 CIW raises two contentions on appeal: (1) the ALJ erred
when he concluded that CBF did not need to report certain
legal services as spending and (2) the ALJ erred when he
concluded that CBF only needed to report contributions that
were for the purpose of promoting a candidate's
nomination or election. We disagree with the first contention
but agree with the second.
Standard of Review
16 We review de novo (1) statutory provisions, Bryant v.
Credit Union, 160 P.3d 266, 274 (Colo.App. 2007); (2)
constitutional provisions, Rocky Mountain Animal Def. v.
Colo. Div. of Wildlife, 100 P.3d 508, 513 (Colo.App.
2004); and (3) an administrative agency's conclusions of