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Campaign Integrity Watchdog v. Colorado Republican Committee

Court of Appeals of Colorado, First Division

October 5, 2017

Campaign Integrity Watchdog, Petitioner-Appellee,
Colorado Republican Committee, Respondent-Appellant.

         Office of Administrative Courts Case No. OS 2016-0009

          Matthew Arnold, Authorized Representative of Campaign Integrity Watchdog

          Brownstein Hyatt Farber Schreck, LLP, Christopher O. Murray, Denver, Colorado, for Respondent-Appellant


          TAUBMAN JUDGE.

          ¶ 1 In this campaign finance case, the Colorado Republican Committee (CRC) appeals part of a final agency decision which determined that it improperly failed to report three payments for vendor tables at its 2016 Republican Party assembly and convention.[1] Because we conclude that these payments were not political contributions, we reverse that part of the order imposing a fine and sanctions against CRC for failing to report the payments. We do not review, and thus issue no opinion on, that part of the agency decision CRC does not appeal.

         I. Background

         ¶ 2 In April 2016, CRC held its convention to nominate candidates for state and federal offices and to elect at-large delegates and alternates to the 2016 Republican National Convention. In connection with the convention, CRC sold vendor tables for a minimum of $350 each.[2] Although the record is not clear, these vendor tables apparently were used by individuals and organizations to promote campaigns, advertise, and share information. Those who purchased tables could decorate the tables and provide literature to convention delegates and visitors. The record also indicates that CRC sold some tables to commercial vendors.

         ¶ 3 Three payments to CRC for these tables are at issue. The first table was purchased by Jess Loban, a Republican candidate for the state senate. CRC deposited his payment of $350 into its federal operations account and reported it in its disclosures to the Federal Election Commission (FEC). The second and third tables were purchased by the Party of Choice, LLC. The record does not provide any more information about the LLC. CRC deposited the Party of Choice's two payments totaling $700 into its state operations account and disclosed them on its state report of contributions and expenditures.

         ¶ 4 In May 2016, Campaign Integrity Watchdog (CIW), through Matt Arnold, its authorized representative[3], filed a complaint with the secretary of state. As relevant to this appeal, CIW argued that CRC failed to report in its state report of contributions and expenditures the payment from Loban as a contribution. It also argued that, with respect to the payments from the Party of Choice, CRC failed to follow all of the reporting requirements for a contribution from an LLC, including failure to file what is known as an LLC "affirmation" pursuant to section 1-45-103.7, C.R.S. 2017.[4]

         ¶ 5 An administrative law judge (ALJ) held a hearing on these and other issues in August 2016. During the hearing, CRC argued that the three payments were not reportable contributions under the Fair Campaign Practices Act (FCPA), sections 1-45-101 to -118, C.R.S. 2017. In his final order, the ALJ ruled that (1) the three payments by Loban and the Party of Choice were all reportable contributions under state law; (2) CRC did not properly disclose these contributions; (3) CRC must pay a $4600 fine for failure to disclose these contributions; and (4) CRC must file amended reports of contributions and expenditures and return those contributions. Consequently, he assessed a fine and a sanction in the alternative against CRC and ordered that CRC amend its reports of contributions and return the contributions.

         II. Interpretation of Section 1-45-103(6)(b) of the FCPA

         ¶ 6 CRC contends that the ALJ erred in determining that the three payments for vendor tables at the convention were reportable contributions under state law and not properly reported by CRC. We agree.

         ¶ 7 At the hearing, Shana Kohn Banberger, the Executive Director of CRC, testified that vendors purchase tables at the convention to present a display to roughly 4000 delegates and around 2000 to 3000 alternates - an attendance of roughly 6000 to 7000 people. Banberger also stated that vendor tables typically sell out.

         ¶ 8 Banberger further attested that CRC did not report these payments for the vendor tables as contributions because the payments were "a fee for a service. . . . It was a fee for the vendor tables, as they stated on their check."

         A. Standard of Review

         ¶ 9 As a matter of statutory interpretation, we review de novo whether payments to a political party are contributions under the Colorado Constitution and state law. Campaign Integrity Watchdog v. Coloradans for a Better Future, 2016 COA 51, ¶ 16, ___ P.3d ___, ___ (cert. granted Sept. 12, 2016). We also review de novo an administrative agency's conclusions of law. Id.

         B. Applicable Law

         ¶ 10 As pertinent here, section 1-45-108(1)(a)(I), C.R.S. 2017, requires political committees to report contributions of twenty dollars or more that they receive. It also requires them to report expenditures and obligations.

         ¶ 11 Under the definitions section of the FCPA, "contribution" has "the same meaning as set forth in section 2(5) of article XXVIII of the state constitution." § 1-45-103(6)(a), C.R.S. 2017. The Colorado Constitution defines "contribution" broadly as "[t]he payment, loan, pledge, gift, or advance of money, or guarantee of a loan, made to any candidate committee, issue committee, political committee, small donor committee, or political party." Colo. Const. art. XXVIII, § 2(5)(a)(I). However, section 1-45-103(6)(b) adds the following:

"Contribution" includes, with regard to a contribution for which the contributor receives compensation or consideration of less than equivalent value to such contribution, including, but not limited to, items of perishable or nonpermanent value, goods, supplies, services, or participation in a campaign-related event, an amount equal to the value in excess of such compensation or consideration as determined by the candidate committee.

§ 1-45-103(6)(b).

         ¶ 12 When interpreting a statute or a constitutional amendment, we must first determine whether it has a plain and unambiguous meaning. Campaign Integrity Watchdog, ¶ 17, ___ P.3d at ___. "The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Id. at ¶ 18, ___ P.3d at ___ (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)). We read the statutory scheme as a whole to give "consistent, harmonious, and sensible effect to all parts of the statute." Id. (quoting Salazar v. Indus. Claim Appeals Office, 10 P.3d 666, 667 (Colo.App. 2000)); see also People v. Dist. Court, 713 P.2d 918, 921 (Colo. 1986). We will not adopt a statutory interpretation that leads to an illogical or absurd result or is at odds with the legislative scheme. People v. Cross, 127 P.3d 71, 73 (Colo. 2006). We also reject interpretations that render words or phrases superfluous. Id.

         ¶ 13 Likewise, when interpreting a constitutional amendment, we must give effect to the electorate's intent in enacting the amendment. Campaign Integrity Watchdog, ¶ 19, P.3d at . We must give words their ordinary and popular meanings to ascertain what the voters believed the amendment to mean when they adopted it. Id. We also must interpret ...

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