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Campaign Integrity Watchdog LLC v. Colorado Republican Party Independent Expenditure Committee

Court of Appeals of Colorado, First Division

March 9, 2017

Campaign Integrity Watchdog LLC, Petitioner-Appellant,
v.
Colorado Republican Party Independent Expenditure Committee, Respondent-Appellee, and Colorado Secretary of State, Intervenor-Appellee, and Office of Administrative Courts, Appellee.

         Office of Administrative Courts Case No. OS 2015-0020

          Matthew Arnold, Authorized Representative, Denver, Colorado, of Campaign Integrity Watchdog

          Brownstein Hyatt Farber Schreck, LLP, Christopher O. Murray, David B. Meschke, Denver, Colorado, for Respondent-Appellee

          Cynthia H. Coffman, Attorney General, Matthew D. Grove, Assistant Solicitor General, Denver, Colorado, for Intervenor-Appellee

          No Appearance for Appellee

          OPINION

          NAVARRO JUDGE

         ¶ 1 Campaign Integrity Watchdog LLC (CIW) alleges that the Colorado Republican Party Independent Expenditure Committee (CORE) violated various campaign finance laws. An administrative law judge (ALJ) dismissed CIW's claims. CIW appeals, but we affirm the ALJ's order. In doing so, we hold that the applicable campaign finance provisions do not require an independent expenditure committee (IEC) to disclose a donation unless the donation was given for the purpose of making an independent expenditure.

         I. Factual and Procedural History

         ¶ 2 According to CIW's complaint, its claims stem from two earlier campaign finance proceedings against CORE, both initiated by CIW and resolved by an ALJ. In the first case, an ALJ penalized CORE in the amount of $200. In the second case, an ALJ imposed a $600 aggregate penalty and an award of $255 in costs. The Colorado Republican Party paid these penalties and costs on CORE's behalf. CORE did not disclose these payments in its periodic campaign finance disclosure reports. Around the same time, a private person paid $50, 000 to a law firm to settle CORE's legal expenses. CORE disclosed this payment as a "contribution" in its periodic campaign finance disclosure report.

         ¶ 3 CIW filed a complaint alleging that CORE did not comply with the disclosure requirements of article XXVIII of the Colorado Constitution, the Fair Campaign Practices Act (FCPA), §§ 1-45-101 to -118, C.R.S. 2016, and the Colorado Secretary of State's Rules Concerning Campaign and Political Finance. CIW maintained that CORE should have disclosed as "donations" or "contributions" the payments made by the Colorado Republican Party and that CORE should have disclosed as "expenditures" all the payments.

         ¶ 4 CORE moved to dismiss the complaint. The Colorado Secretary of State moved to intervene as a respondent and filed his own motion to dismiss. The ALJ permitted the Secretary to intervene for a limited purpose and considered his motion as an "amicus-style brief."

         ¶ 5 The ALJ dismissed CIW's complaint under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief could be granted. The ALJ decided as follows:

• CORE, as an IEC, was not required to report as "donations" the payments made on its behalf by the Colorado Republican Party because they were made for the purpose of satisfying CORE's fines and costs, not for the purpose of making an independent expenditure.
• CORE was not required to report as "contributions" the payments made on its behalf by the Colorado Republican Party because the statute requiring disclosure of contributions does not apply to an IEC.
• CORE was not required to report as "expenditures" the payments made on its behalf by the Colorado Republican Party and the private person because the payments were for fines, costs, and legal services, not for express advocacy.

         ¶ 6 CIW appeals. Both CORE and the Secretary have filed answer briefs defending the ALJ's decision.

         II. Analysis

         ¶ 7 As it asserted in the administrative proceedings, CIW contends on appeal that CORE was required to report some of the subject payments as "donations" or "contributions" and to report all the payments ...


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