Chapter 12 - § 12.2 • COLORADO CAMPAIGN FINANCE LAWS

• Jurisdiction: Colorado

§ 12.2 • COLORADO CAMPAIGN FINANCE LAWS

§ 12.2.1—Background

Colorado's campaign finance reform laws are largely found in the state constitution. In 1996, the voters adopted a comprehensive statutory scheme that was later invalidated, in part, by the federal courts. See Citizens for Responsible Gov't State PAC v. Davidson, 236 F.3d 1174, 1186 (10th Cir. 2000). The Colorado General Assembly subsequently amended the challenged statutes and several others. In response to these legislative changes and on the heels of the congressional debate over the Bipartisan Campaign Reform Act (otherwise known as the McCain-Feingold legislation), 2 U.S.C. §§ 431, et seq., another ballot measure was adopted in 2002. See generally McConnell v. Federal Election Comm'n, 540 U.S. 93 (2003). This time, campaign finance provisions were inserted in Article XXVIII of the state constitution. Amendment 27 was enacted by voters because, according to lawn signs and bumper stickers during the 2002 campaign, this reform would "get big money out of politics."

In 2008, Colorado voters amended the Colorado Constitution to prohibit contributions to state and local candidates and political parties by holders of "sole source government contracts." Colo. Const. art. XXVIII, § 15. A sole source government contract was defined as any agreement with a public entity for more than $100,000 where fewer than three bids were solicited, including collective bargaining agreements. Id. at § 2. Likewise, contributors to committees that promoted or sought to influence the outcome of an election on any ballot issue were prohibited from becoming sole source government contractors related to that ballot issue. Colo. Const. art. XXVIII, § 17(2). However, the 2008 amendments were invalidated as violative of the First Amendment. Dallman v. Ritter, 225 P.3d 610, 640 (Colo. 2010).

The current scheme of election laws is multi-faceted; provisions are contained in the Colorado Constitution (Colo. Const. art. XXVIII, §§ 1, et seq.), the Colorado Revised Statutes (C.R.S. §§ 1-45-101, et seq.), and the rules of the Secretary of State (8 C.C.R. 1505-6 (2018); see Gessler v. Colo. Common Cause, 2014 CO 44 (Colo. 2014) (Secretary of State misinterpreted pertinent case law in promulgating rules and exceeded his authority)). Interpretative guidance is found in several decisions of the state's appellate courts, written decisions rendered by administrative law judges regarding campaign finance complaints, and advisory opinions of the Secretary of State. The ALJ decisions can be found on the Secretary of State's website, www.sos.state.co.us.

The Secretary's interpretations of a number of campaign finance provisions can be found on the Secretary's website and will receive some deference by the courts. Where the Secretary changes the interpretation given to a provision by his or her predecessors, though, the rule requiring deference to the administrative interpretation "is simply inapplicable." Colorado Common Cause v. Meyer, 758 P.2d 153, 159 (Colo. 1988). Similarly, the Secretary has authority to enact rules to administer or enforce the campaign finance laws, Colo. Const. art. XXVIII, § 9(2) and C.R.S. § 1-45-111.5(1), but the Secretary may not substantively add to or change the organic campaign finance laws. Sanger v. Dennis, 148 P.3d 404 (Colo. App. 2006).

Like other voter-approved amendments to the constitution, the provisions of Colorado's campaign finance law must be given their ordinary and popular meaning so that their application reflects the electorate's intent. Where the language is unambiguous, it will be applied as written. Where it is reasonably susceptible to more than one meaning and the intent of the voters cannot be discerned, the amendment should be construed in light of the objective sought to be achieved and the mischief sought to be avoided. Davidson v. Sandstrom, 83 P.3d 648, 654-55 (Colo. 2004). The voters, like the legislature, are deemed to know the law that the amendment seeks to change and the context for that amendment. Common Sense Alliance v. Davidson, 995 P.2d 745, 754 (Colo. 2000). Where the language may appear to create a loophole, it is not up to the courts to fill in any gaps in the law by judicial fiat. Any such remedy must be adopted either by the legislature or the voters. Id. at 755.

§ 12.2.2—Can Nonprofit Entities Participate in Candidate Elections?

Specific Prohibitions on Corporate Campaign-Related Activity

Corporations are prohibited from paying for certain political activities in Colorado. In this regard, nonprofit corporations are treated the same as for-profit corporations. C.R.S. § 1-45-103(7). For instance, no corporation may provide a direct contribution to a candidate's campaign or a political party. Colo. Const. art. XXVIII, § 3(4)(a). No person, including a corporation, may act as a conduit through which multiple contributions are channeled to a candidate. Colo. Const. art. XXVIII, § 3(7). Further, no candidate committee, political committee, small donor committee, or political party is permitted to knowingly accept contributions from a foreign corporation — that is, a corporation organized under the laws of another country. Colo. Const. art. XXVIII, § 3(12)(c).

A contribution is defined to include "[a]nything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate's . . . election." Colo. Const. art. XXVIII, § 2(5)(a)(IV). A contribution must be given "to a candidate," not simply broadly distributed in a manner that may include the candidate, and it must be more than an "indirect benefit" to a candidate. Keim v. Douglas Cty. Sch. Dist., 2017 CO 81, ¶¶ 31-33.

Permitted Uses of Corporate Funds on Political Activities

Corporations may now fund political messages that qualify as electioneering communications and independent expenditures. Citizens United v. Federal Election Comm'n, 558 U.S. 310, 343 (2010) (invalidating federal prohibitions on independent, campaign-related spending by corporations); In re Interrogatories Concerning the Effect of Citizens United v. Federal Election Commission, 558 U.S. ___ (2010) on Certain Provisions of Article XXVIII of the Constitution of the State of Colorado, 227 P.3d 892 (Colo. 2010) (applying Citizens United to Colo. Const. art. XXVII, §§ 3(4)(a) and 6(2) to authorize corporate and union independent spending on candidate-related communications).

Before the U.S. Supreme Court ruled in Citizens United, only a narrow band of nonprofit corporations could spend their funds on candidate advocacy. See, e.g., Colo. Const. art. XXVIII, § 3(4)(b); Fed. Election Comm'n v. Mass. Citizens for Life, 428 U.S. 238, 263-64 (1986). Those distinctions have been effectively erased in the aftermath of Citizens United.

An "electioneering communication" is an advertisement that is intended to influence an election. An electioneering communication unambiguously refers to a candidate; is broadcasted, mailed, printed, delivered, or distributed within 30 days of a primary election or 60 days of a general election; and is directed to an audience that includes persons living in the district who could vote for or against such candidate. Colo. Const. art. XXVIII, § 2(7)(a). Under federal law, electioneering communications share a number of these characteristics but are limited to those messages that are broadcast via television or radio. 2 U.S.C. § 434(f)(3)(A). Under federal law, electioneering communications may present...