A deep-pocketed nonprofit that has directed millions of dollars to conservative causes in Colorado over the past two years is heading for a showdown with Democratic Secretary of State Jena Griswold over whether it can keep its donors secret.
Last week, an administrative law judge recommended a $40,000 fine for Unite for Colorado after it spent $4 million to support or oppose three 2020 ballot initiatives, finding that the group should have revealed its donors. The ruling also requires the nonprofit to file as an issue committee and reveal its donors from August 2020 through January.
Unite for Colorado plans to appeal the decision.
Meanwhile, progressive activists filed a new complaint against Unite for Colorado last week centered on the $3.7 million it has donated to two ballot initiatives likely to be considered by voters in November.
Political nonprofits don’t have to disclose their donors as long as their primary purpose isn’t to support or oppose causes and candidates. They’re often called dark money groups, and they are some of the biggest spenders in Colorado elections for both Democrats and Republicans.
National nonprofit Sixteen Thirty Fund, for example, spent $3.6 million on ballot initiatives in 2020. The group traditionally backs liberal causes and Democratic candidates.
Griswold made campaign finance transparency a centerpiece of her 2018 campaign, when she defeated Republican Secretary of State Wayne Williams. Since then, Republicans have accused Griswold of unfairly pursuing conservative groups for campaign finance violations.
The Secretary of State’s Office offered this statement: “While we can’t comment on pending cases, the Colorado Secretary of State’s Office remains committed to transparency and will continue to shine a light on dark money wherever possible under current constitutional law. Coloradans deserve elections they can believe in, which includes donor transparency in political spending.” Griswold is up for re-election next year.
The Colorado controversy is part of a larger national debate over dark money in politics. At the federal level, Congress is considering legislation that would force political nonprofits to disclose their donors.
Unite for Colorado formed in late 2019, and in March 2020 began airing ads critical of former Gov. John Hickenlooper, a Democrat, as he ran for U.S. Senate.
Starting in May 2020, the group paid to gather signatures for two ultimately successful ballot initiatives. Those measures would have cut income taxes and required voter approval of certain fee increases.
The spending caught the eye of progressives, and in August 2020, Bell Policy Center President Scott Wasserman and Castle Rock teacher Katherine Dorman filed a campaign finance complaint against Unite for Colorado alleging the nonprofit should file as an issue committee and report the sources of its money.
Griswold’s enforcement staff members initially recommended dismissing the complaint against Unite. But her deputy secretary of state at the time, Ian Rayder, instead referred it to the Attorney General’s Office, which took the case to an administrative law judge.
That judge, Matthew Norwood, concluded that supporting or opposing political causes was a primary purpose of the nonprofit, thus it should be registered as an issue committee.
The Colorado Secretary of State’s Office will decide whether to accept or amend the judge’s ruling. If approved, the $40,000 fine would be the largest ever resulting from a campaign finance complaint in Colorado, records show.
Unite for Colorado isn’t planning to wait for Griswold’s office. The group’s attorney, Suzanne Taheri, said the group will appeal the judge’s decision to the Colorado Court of Appeals.
“Our hope is that once we get it out of partisan hands it will come to an end,” said Taheri, a Republican and a former deputy secretary of state in Colorado under Williams.
In addition to the two financial ballot issues, Unite for Colorado also opposed a proposition to overturn a law signing the state onto the National Popular Vote Interstate Compact, according to the administrative law judge’s ruling.
The nonprofit spent about $4 million on the three ballot initiatives, the ruling said, out of a total of $17 million it dropped on the 2020 election. Only about $1.7 million of that initiative spending was reported through public campaign finance reports as donations to other issue committees.
So far this year, Unite for Colorado has donated $3.7 million directly to two ballot initiatives likely to be on the November ballot, one that aims to cut property taxes and the other that would require legislative action to spend money received from legal settlements or the federal government.
Last week, Dorman and Wasserman filed another complaint against Unite for Colorado, again arguing that the nonprofit should register as an issue committee and reveal the identities of its donors.
“They essentially are just a dark-money issue committee,” Wasserman told The Colorado Sun. “A primary purpose of this organization is to fund these ballot measures that are closely aligned with the Republican agenda.”
Bell Policy Center is also a nonprofit. It aims to improve the economy for those at the middle and bottom of the scale and often is aligned with liberal policies and Democrats. Wasserman said the group’s funders include philanthropists Merle Chambers and Linda Shoemaker, as well as community foundations and other individuals.
He said Coloradans deserve to know who is behind the tax cuts Unite for Colorado supports.
“These are Trojan horse tax cuts,” he said. “When you really do the math, Coloradans are losing out on public services while the wealthy are getting big cuts on their taxes.”
National nonprofits, including Sixteen Thirty Fund on the left and Americans for Prosperity on the right, have also funded ballot initiatives in Colorado. But Wasserman said there’s a difference between those groups and Unite for Colorado.
“These national players play in many different states with many different laws,” Wasserman said. “It gets a lot harder to prove what we’re proving in this case – that (their spending on ballot initiatives is) a huge percentage of their overall spending.”
But Taheri contended that if last week’s ruling against her client is allowed to stand, it should apply to other groups.
“Under this interpretation, everybody would have to report their donors including Planned Parenthood, including Sixteen Thirty,” she said.
The case against Unite for Colorado isn’t the only one pending for the Secretary of State’s Office when it comes to issue committees and political nonprofits and whether they have to disclose their donors.
The Colorado Union of Taxpayers, a nonprofit that mostly works to cut taxes and isn’t involved in any campaign finance complaints, filed a federal lawsuit in September 2020 claiming state election law and rules on issue committees, particularly for small spenders, are “vague and arbitrary” and violate the First and 14th amendments.
The group’s lawsuit noted that it spent about $4,000 supporting the same tax ballot issues Unite for Colorado worked on in 2020, and $5,000 on another initiative in 2019. State law requires those who spend $5,000 or more directly in support of or opposition to a ballot measure to register as an issue committee.
Dan Burrows, the legal director for the nonprofit Public Trust Institute, is representing the Colorado Union of Taxpayers. Although the Colorado Union of Taxpayers hasn’t faced a campaign finance complaint, he said, there’s no guarantee it won’t in the future, potentially chilling the group’s free speech rights.
He noted that the federal case wouldn’t apply to larger groups such as Unite for Colorado, that spend millions of dollars.
“It’s obvious that the state’s interest in regulating those is different than in regulating small organizations,” he said. “As the amount of money spent increases, the state’s interest in knowing who spent that money increases.”
Two national organizations, the Brennan Center for Justice and the Campaign Legal Center, are filing briefs supporting the Secretary of State’s Office contention that the state law is legal.
The federal case is expected to be decided in the coming months.