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  • Writer's pictureMario Nicolais

Ruling throws Colorado campaign finance system for a loop

Just as primary campaigns wrap up and the general election homestretch begins, the District of Colorado federal court threw the state political class for a major loop. By ruling the private enforcement mechanism for Colorado’s campaign finance system facially unconstitutional, Judge Raymond Moore set the table for a dramatic five months until the election. If he grants the plaintiff’s request for a permanent injunction — a likely outcome given she has already won on the merits of the case — Colorado will be left scrambling to create a whole new system for dealing with campaign finance complaints.

I spent more than a decade practicing campaign finance and election law. I’ve advised candidates, committees, and political parties. I’ve filed a few complaints and defended many more. I have argued before trial courts, appellate courts, and the Colorado Supreme Court under this regulatory framework. While I did not actively take part in this case, I have worked closely with the plaintiff’s attorneys and the Institute for Justice on other matters.

Until a few years ago, I thought Colorado’s system worked pretty well.

To provide transparency, candidates, parties, issue committees, 527s, and similar groups file regular contribution and expenditure reports. In theory, anyone can look up how much any organization took from who and when. It is not a perfect system, but in general, it works. When legitimate questions arose over filings or omissions, Colorado law allowed private parties to file and prosecute a complaint.

Traditionally, complaints revolved around substantive legal questions such as who the laws covered, when filing requirements were triggered, and what limits the government could impose on political speech. The nuances and subtleties of regulating core First Amendment rights make campaign finance laws exceedingly complex. Consequently, skilled advocates and courts shaped election law boundaries through meaningful litigation.

More recently, though, several groups began filing campaign finance complaints solely to line their own pockets and intimidate political opponents. These groups comb through campaign finance filings looking for any small errors and then exploit the complaint system for their own gain. The director for one of these groups, Matt Arnold, coined his work “political guerilla legal warfare (a.k.a. Lawfare).” It has nothing to do with the public good, just private greed.

For example, Arnold’s organization, Campaign Integrity Watchdog, is responsible for more than seventy complaints in the past few years regularly demanded “settlement” payments in order withdraw its lawsuits. Because of the byzantine procedure through which Colorado’s campaign finance penalties compound and accrue on a daily basis, the potential fines threatened by the group regularly reached into the tens and hundreds of thousands of dollars. Even when the only errors involved a couple omitted $3.00 transactions. Consequently, the group knew it could demand payments for $4,500 or $10,000. When defendants didn’t pay, the group threatened that “the beatings will continue until morale improves.”

Making matters worse, through a loophole in the law, the individuals “prosecuting” the claims do not need to be attorneys and cannot be held to the same ethical and professional accountability standards. Consequently, the state’s most prolific complaint filer has lied to federal courts and dropped F-bombs before the Colorado Supreme Court. It only cost him a small fine. As an attorney, if I did that, I would lose my license to practice law.

These abuses imposed such a significant toll on political speech that people like Tammy Holland, the plaintiff before Judge Moore, would rather stay silent than risk a another campaign finance lawsuit. But silence is antithetical to democracy. And as Moore ruled, imposing silence under threat of private-enforcement action is unconstitutional.

How the state will deal with Moore’s decision is anybody’s guess. Maybe emergency rules from the Secretary of State will suffice. Or maybe a special session of the legislature will be necessary. Regardless, it will be another big bump in the road as Colorado hurls toward the polls in November.

Mario Nicolais is an attorney and Denver Post columnist who writes on law enforcement, the legal system and public policy. Follow him on Twitter: @MarioNicolaiEsq

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