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Colorado > Colorado Electoral Code > Fair Campaign Practices Act

1-45-111.5. Duties of the secretary of state – enforcement – sanctions

Overview of Statute

The secretary of state is responsible for issuing rules necessary to enforce and administer any provision of this article. Pursuant to procedural requirements created by both statute and the state constitution, an individual may contest the rules promulgated by the secretary of state. Administrative law judges may also sanction fines and other penalties on parties who fail to abide by this article. Litigation involving any challenges or enforcement must abide by the regulations provided in this statute, including procedural requirements for subpoenas and judicial standard of review.

Statute

(1) The secretary of state shall promulgate such rules, in accordance with article 4 of title 24, C.R.S., as may be necessary to enforce and administer any provision of this article.

(1.5) (a) Any person who believes that a violation of either the secretary of state’s rules concerning campaign and political finance or this article has occurred may file a written complaint with the secretary of state not later than one hundred eighty days after the date of the occurrence of the alleged violation. The complaint shall be subject to all applicable procedures specified in section 9 (2) of article XXVIII of the state constitution.

(b) Any person who commits a violation of either the secretary of state’s rules concerning campaign and political finance or this article that is not specifically listed in section 9 (2) (a) of article XXVIII of the state constitution shall be subject to any of the sanctions specified in section 10 of article XXVIII of the state constitution or in this section.

(c) In addition to any other penalty authorized by article XXVIII of the state constitution or this article, an administrative law judge may impose a civil penalty of fifty dollars per day for each day that a report, statement, or other document required to be filed under this article that is not specifically listed in article XXVIII of the state constitution is not filed by the close of business on the day due. Any person who fails to file three or more successive committee registration reports or reports concerning contributions, expenditures, or donations in accordance with the requirements of section 1-45-107.5 shall be subject to a civil penalty of up to five hundred dollars for each day that a report, statement, or other document required to be filed by an independent expenditure committee is not filed by the close of business on the day due. Any person who knowingly and intentionally fails to file three or more reports due under section 1-45-107.5 shall be subject to a civil penalty of up to one thousand dollars per day for each day that the report, statement, or other document is not filed by the close of business on the day due. Imposition of any penalty under this paragraph (c) shall be subject to all applicable requirements specified in section 10 of article XXVIII of the state constitutiongoverning the imposition of penalties.

(d) In connection with a complaint brought to enforce any requirement of article XXVIII of the state constitution or this article, an administrative law judge may order disclosure of the source and amount of any undisclosed donations or expenditures.

(e) In connection with any action brought to enforce any provision of article XXVIII of the state constitution or this article, the membership lists of a labor organization or, in the case of a publicly held corporation, a list of the shareholders of the corporation, shall not be disclosed by means of discovery or by any other manner.

(f) Any person who is fined up to one thousand dollars per day for a knowing and intentional failure to file under paragraph (c) of this subsection (1.5) shall, if the person has shareholders or members, notify such shareholders or members of the penalty and the adjudicated violations on its publicly accessible web site in a prominent manner for not less than one hundred eighty days after the final adjudication. A copy of this notice, with the web site address used, shall be filed with the secretary of state and shall be a public record.

(2) A party in any action brought to enforce the provisions of article XXVIII of the state constitution or of this article shall be entitled to the recovery of the party’s reasonable attorney fees and costs from any attorney or party who has brought or defended the action, either in whole or in part, upon a determination by the office of administrative courts that the action, or any part thereof, lacked substantial justification or that the action, or any part thereof, was interposed for delay or harassment or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery procedures available under the Colorado rules of civil procedure. Notwithstanding any other provision of this subsection (2), no attorney fees may be awarded under this subsection (2) unless the court or administrative law judge, as applicable, has first considered the provisions of section 13-17-102 (5) and (6), C.R.S. For purposes of this subsection (2), “lacked substantial justification” means substantially frivolous, substantially groundless, or substantially vexatious.

(3) Upon a determination by the office of administrative courts that an issue committee failed to file a report required pursuant to section 1-45-108, the administrative law judge shall direct the issue committee to file any such report within ten days containing all required disclosure of any previously unreported contributions or expenditures and may, in addition to any other penalty, impose a penalty not to exceed twenty dollars for each contribution received and expenditure made by the issue committee that was not timely reported.

(4) (a) Upon failure of a witness or party to comply with an administrative subpoena issued in relation to an alleged campaign finance violation pursuant to article XXVIII of the state constitution or this article, the party that requested the administrative subpoena or the issuing agency may petition the district court ex parte with a copy of the petition sent to the subpoenaed witness or party and the administrative law judge by regular mail, for an order directing the witness or party to comply with the administrative subpoena.

(b) If the petition required by paragraph (a) of this subsection (4) shows to the district court’s satisfaction that the administrative subpoena was properly served pursuant to rule 4 of the Colorado rules of civil procedure, the district court shall order the subpoenaed witness or party to appear before the district court and show cause why the witness or party should not be ordered to comply with the administrative subpoena. A copy of the petition and the court order shall be served, pursuant to rule 5 of the Colorado rules of civil procedure, on the witness or party at least fifteen days before the date designated for the witness or party to appear before the district court.

(c) At a show cause hearing ordered by the district court pursuant to paragraph (b) of this subsection (4), the court shall review the administrative subpoena and any evidence presented by the parties to determine compliance with the Colorado rules of civil procedure. The subpoenaed witness or party shall bear the burden of showing good cause as to why he or she should not be ordered to comply with the administrative subpoena.

(d) If the court determines that the subpoenaed witness or party is required to comply with the administrative subpoena:

(I) The district court shall order compliance forthwith and may impose remedial and punitive fines, including attorneys’ fees and costs, for the witness’s or party’s failure to comply with the administrative subpoena; and

(II) The administrative law judge shall schedule a hearing on the complaint to occur on a day after the occurrence of the required deposition and such other discovery as may be warranted due to such deposition.

(e) If the subpoenaed witness or party fails to appear at the show cause hearing, the district court may issue a bench warrant for the arrest of the subpoenaed witness or party and may impose other sanctions pursuant to the Colorado rules of civil procedure.

 

 

ource: L. 2003: Entire section added, p. 2160, § 6, effective June 3.L. 2005: (2) amended, p. 852, § 4, effective June 1.L. 2008: (1.5) added and (2) amended, p. 349, § 1, effective April 10.L. 2010: (1.5)(c), (1.5)(d), (1.5)(e), and (1.5)(f) added, (SB 10-203), ch. 269, p. 1236, § 6, effective May 25; (3) added,(HB 10-1370), ch. 270, p. 1242, § 7, effective January 1, 2011.L. 2011: (4) added, (HB 11-1117), ch. 35, p. 97, § 1, effective March 21.

 

Cross references: (1) For the legislative declaration in the 2010 act adding subsections (1.5)(c), (1.5)(d), (1.5)(e), and (1.5)(f), see section 1 of chapter 269, Session Laws of Colorado 2010.

(2) For the legislative declaration in the 2010 act adding subsection (3), see section 1 of chapter 270, Session Laws of Colorado 2010.
 
ANNOTATION

District court did not abuse its discretion by entering preliminary injunction against secretary of state enjoining implementation of administrative rule defining “member” for purposes of constitutional provisions governing small donor committees. Proposed rule would force labor and other covered organizations to get written permission before using an individual’s dues or contributions to fund political campaigns. Plaintiffs demonstrated reasonable probability of success on the merits in challenging secretary’s authority to enact proposed rule. Secretary’s “definition” of term “member” in proposed rule is much more than an effort to define term. It can be read effectively to add, modify, and conflict with constitutional provision by imposing new condition not found in text of article XXVIII. Secretary’s stated purpose in enacting proposed rule not furthered by “definition” contained in proposed rule. Proposed rule does not further secretary’s stated goal of achieving transparency of political contributions. Sanger v. Dennis, 148 P.3d 404 (Colo. App. 2006).

Plaintiffs demonstrated reasonable probability of success on the merits in alleging that administrative rule promulgated by secretary of state violated their constitutional rights to freedom of association as applied to them. Secretary’s immediate enforcement of administrative rule forcing labor and other covered organizations to get written permission before using an individual’s dues or contributions to fund political campaigns would have effectively prevented plaintiffs from exercising their first amendment rights in general election. Administrative rule was not narrowly tailored. Rationale justifying administrative rule was based upon speculation there would be dissenters, thereby impermissibly penalizing constitutional rights of the many for the speculative rights of the few. Accordingly, district court did not abuse its discretion by entering preliminary injunction against implementation of administrative rule. Sanger v. Dennis, 148 P.3d 404 (Colo. App. 2006).

Adoption of Rule 9.3 of the Colorado secretary of state’s rules concerning campaign and political finance requiring the name of the candidate unambiguously referred to in the electioneering communication to be included in the electioneering report, was within the rulemaking authority of the secretary of state under § 9(1)(b) of article XXVIII of the state constitution and subsection (1) of this section. Colo. Citizens for Ethics in Gov’t v. Comm. for the Am. Dream, 187 P.3d 1207 (Colo. App. 2008).

ALJ had jurisdiction to impose penalty for violation of Rule 9.3 and did not err by imposing a $1,000 penalty on political committee. Section (2)(a) of article XXVIII of the state constitution grants an ALJ authority to conduct hearings on alleged violations of the article and the “Fair Campaign Practices Act” and to impose penalties if a violation has occurred. Rule 9.3 is necessary to implement former § 1-45-109 (5), and, under § 10(2)(a) of article XXVIII of the state constitution, sanctions can be imposed for violations of § 1-45-109. Colo. Citizens for Ethics in Gov’t v. Comm. for the Am. Dream, 187 P.3d 1207 (Colo. App. 2008).

ALJ did not err in determining that membership contribution claim was groundless and in awarding attorney fees against litigant. ALJ did not misinterpret subsection (2) by rejecting litigant’s defense based on voluntary dismissal of its membership contributions claim under § 13-17-102 (5). Although § 1-45-111.5 (2) contains the same operative language and definitions as § 13-17-102 (4), at the time of the action, the FCPA did not incorporate § 13-17-102 (5) and contained no exception for dismissal of a groundless claim prior to hearing. Moreover, although § 13-17-102 applies to any civil action commenced or appealed in any court of record, “court of record” does not include administrative courts. Finally, the record showed that the ALJ considered litigant’s arguments about the efforts it made after the filing of the action to reduce or dismiss claims it found to be invalid. Colo. Citizens for Ethics in Gov’t v. Comm. for the Am. Dream, 187 P.3d 1207 (Colo. App. 2008).

Given that identical terms “substantially frivolous, substantially groundless, or substantially vexatious” are found in this section and in § 13-17-102, case law construing that section may be examined for guidance in construing terms used in this section. Colo. Ethics Watch v. Senate Major. Fund, 275 P.3d 674 (Colo. App. 2010), aff’d on other grounds, 2012 CO 12, 269 P.3d 1248.

A claim is frivolous if its proponents can present no rational argument based on the evidence or the law to support it. A claim is vexatious if it is brought or maintained in bad faith to annoy or harass another. Colo. Ethics Watch v. Senate Major. Fund, 275 P.3d 674 (Colo. App. 2010), aff’d on other grounds, 2012 CO 12, 269 P.3d 1248.

Definition [Corporation]

A domestic corporation incorporated under and subject to the “Colorado Business Corporation Act”, articles 101 to 117 of title 7, C.R.S., a domestic nonprofit corporation incorporated under and subject to the “Colorado Revised Nonprofit Corporation Act”, articles 121 to 137 of title 7, C.R.S., or any corporation incorporated under and subject to the laws of another state. For purposes of this article, “domestic corporation” shall mean a for-profit or nonprofit corporation incorporated under and subject to the laws of this state, and “nondomestic corporation” shall mean a corporation incorporated under and subject to the laws of another state or foreign country. For purposes of this article, “corporation” includes the parent of a subsidiary corporation or any subsidiaries of the parent, as applicable. C.R.S. § 1-45-103.

Definition [Expenditure]

Any purchase, payment, distribution, loan, advance, deposit, or gift of money by any person for the purpose of expressly advocating the election or defeat of a candidate or supporting or opposing a ballot issue or ballot question. An expenditure is made when the actual spending occurs or when there is a contractual agreement requiring such spending and the amount is determined.

(b) “Expenditure” does not include:

(I) Any news articles, editorial endorsements, opinion or commentary writings, or letters to the editor printed in a newspaper, magazine or other periodical not owned or controlled by a candidate or political party;

(II) Any editorial endorsements or opinions aired by a broadcast facility not owned or controlled by a candidate or political party;

(III) Spending by persons, other than political parties, political committees and small donor committees, in the regular course and scope of their business or payments by a membership organization for any communication solely to members and their families;

(IV) Any transfer by a membership organization of a portion of a member’s dues to a small donor committee or political committee sponsored by such membership organization; or payments made by a corporation or labor organization for the costs of establishing, administering, or soliciting funds from its own employees or members for a political committee or small donor committee.

Section 2(8) of article XXVIII of the state constitution.

Definition [Contribution]

(a) (I) The 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;

(II) Any payment made to a third party for the benefit of any candidate committee, issue committee, political committee, small donor committee, or political party;

(III) The fair market value of any gift or loan of property made to any candidate committee, issue committee, political committee, small donor committee or political party;

(IV) Anything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s nomination, retention, recall, or election.

(b) “Contribution” does not include services provided without compensation by individuals volunteering their time on behalf of a candidate, candidate committee, political committee, small donor committee, issue committee, or political party; a transfer by a membership organization of a portion of a member’s dues to a small donor committee or political committee sponsored by such membership organization; or payments by a corporation or labor organization for the costs of establishing, administering, and soliciting funds from its own employees or members for a political committee or small donor committee.

Section 2(5) of article XXVIII of the state constitution.

 

C.R.S. § 1-45-103 further adds:

(b) “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.

(c) “Contribution” also includes:

(I) Any payment, loan, pledge, gift, advance of money, or guarantee of a loan made to any political organization;

(II) Any payment made to a third party on behalf of and with the knowledge of the political organization; or

(III) The fair market value of any gift or loan of property made to any political organization.

C.R.S. § 1-45-103.

Definition [Issue committee]

Any person, other than a natural person, or any group of two or more persons, including natural persons:

(I) That has a major purpose of supporting or opposing any ballot issue or ballot question; or

(II) That has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question.

(b) “Issue committee” does not include political parties, political committees, small donor committees, or candidate committees as otherwise defined in this section.

(c) An issue committee shall be considered open and active until affirmatively closed by such committee or by action of the appropriate authority.

Section 2(10) of article XXVIII of the state constitution.

 

(b) For purposes of section 2 (10) (a) (I) of article XXVIII of the state constitution, “major purpose” means support of or opposition to a ballot issue or ballot question that is reflected by:

(I) An organization’s specifically identified objectives in its organizational documents at the time it is established or as such documents are later amended; or

(II) An organization’s demonstrated pattern of conduct based upon its:

(A) Annual expenditures in support of or opposition to a ballot issue or ballot question; or

(B) Production or funding, or both, of written or broadcast communications, or both, in support of or opposition to a ballot issue or ballot question.

(c) The provisions of paragraph (b) of this subsection (12) are intended to clarify, based on the decision of the Colorado court of appeals in Independence Institute v. Coffman, 209 P.3d 1130 (Colo. App. 2008), cert. denied, — U.S. —, 130 S. Ct. 165, 175 L. Ed. 479 (2009), section 2 (10) (a) (I) of article XXVIII of the state constitution and not to make a substantive change to said section 2 (10) (a) (I).

C.R.S. § 1-45-103.

Definition [Political committee]

Any person, other than a natural person, or any group of two or more persons, including natural persons that have accepted or made contributions or expenditures in excess of $200 to support or oppose the nomination or election of one or more candidates.

(b) “Political committee” does not include political parties, issue committees, or candidate committees as otherwise defined in this section.

(c) For the purposes of this article, the following are treated as a single political committee:

(I) All political committees established, financed, maintained, or controlled by a single corporation or its subsidiaries;

(II) All political committees established, financed, maintained, or controlled by a single labor organization; except that, any political committee established, financed, maintained, or controlled by a local unit of the labor organization which has the authority to make a decision independently of the state and national units as to which candidates to support or oppose shall be deemed separate from the political committee of the state and national unit;

(III) All political committees established, financed, maintained, or controlled by the same political party;

(IV) All political committees established, financed, maintained, or controlled by substantially the same group of persons.

Section 2(12) of article XXVIII of the state constitution.

Definition [Small donor committee]

Any political committee that has accepted contributions only from natural persons who each contributed no more than fifty dollars in the aggregate per year. For purposes of this section, dues transferred by a membership organization to a small donor committee sponsored by such organization shall be treated as pro-rata contributions from individual members.

(b) “Small donor committee” does not include political parties, political committees, issue committees, or candidate committees as otherwise defined in this section.

(c) For the purposes of this article, the following are treated as a single small donor committee:

(I) All small donor committees established, financed, maintained, or controlled by a single corporation or its subsidiaries;

(II) All small donor committees established, financed, maintained, or controlled by a single labor organization; except that, any small donor committee established, financed, maintained, or controlled by a local unit of the labor organization which has the authority to make a decision independently of the state and national units as to which candidates to support or oppose shall be deemed separate from the small donor committee of the state and national unit;

(III) All small donor committees established, financed, maintained, or controlled by the same political party;

(IV) All small donor committees established, financed, maintained, or controlled by substantially the same group of persons.

Section 2(14) of article XXVIII of the state constitution.

Definition [Independent expenditure]

An expenditure that is not controlled by or coordinated with any candidate or agent of such candidate. Expenditures that are controlled by or coordinated with a candidate or candidate’s agent are deemed to be both contributions by the maker of the expenditures, and expenditures by the candidate committee. Section 2(9) of article XXVIII of the state constitution.

Definition [Electioneering communication]

Any communication broadcasted by television or radio, printed in a newspaper or on a billboard, directly mailed or delivered by hand to personal residences or otherwise distributed that:

(I) Unambiguously refers to any candidate; and

(II) Is broadcasted, printed, mailed, delivered, or distributed within thirty days before a primary election or sixty days before a general election; and

(III) Is broadcasted to, printed in a newspaper distributed to, mailed to, delivered by hand to, or otherwise distributed to an audience that includes members of the electorate for such public office.

(b) “Electioneering communication” does not include:

(I) Any news articles, editorial endorsements, opinion or commentary writings, or letters to the editor printed in a newspaper, magazine or other periodical not owned or controlled by a candidate or political party;

(II) Any editorial endorsements or opinions aired by a broadcast facility not owned or controlled by a candidate or political party;

(III) Any communication by persons made in the regular course and scope of their business or any communication made by a membership organization solely to members of such organization and their families;

(IV) Any communication that refers to any candidate only as part of the popular name of a bill or statute.

Section 2(7) of article XXVIII of the state constitution.

Definition [Independent expenditure committee]

One or more persons that make an independent expenditure in an aggregate amount in excess of one thousand dollars or that collect in excess of one thousand dollars from one or more persons for the purpose of making an independent expenditure. C.R.S. § 1-45-103.

Definition [State]

A state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. C.R.S. § 1-8.3-102.

Definition [Person]

Any natural person, partnership, committee, association, corporation, labor organization, political party, or other organization or group of persons. Section 2(11) of article XXVIII of the state constitution.

Definition [Election]

Any election under the “Uniform Election Code of 1992” or the “Colorado Municipal Election Code of 1965”, article 10 of title 31, C.R.S. C.R.S. § 1-7.5-103.

Definition [Donation]

(a) (I) The payment, loan, pledge, gift, or advance of money, or the guarantee of a loan, made to any person for the purpose of making an independent expenditure;

(II) Any payment made to a third party that relates to, and is made for the benefit of, any person that makes an independent expenditure;

(III) The fair market value of any gift or loan of property that is given to any person for the purpose of making an independent expenditure; or

(IV) Anything of value given, directly or indirectly, to any person for the purpose of making an independent expenditure.

(b) “Donation” shall not include a transfer by a membership organization of a portion of a member’s dues for an independent expenditure sponsored by such membership organization.

C.R.S. § 1-45-103.

Definition [Secretary]

The Colorado secretary of state. C.R.S. § 1-1.5-102.

Definition [Committee]

The committee of signers described in section 1-12-108(2). C.R.S. § 1-12-100.5.

Definition [Candidate]

Any person who seeks nomination or election to any state or local public office that is to be voted on in this state at any primary election, general election, school district election, special district election, or municipal election. “Candidate” also includes a judge or justice of any court of record who seeks to be retained in office pursuant to the provisions of section 25 of article VI. A person is a candidate for election if the person has publicly announced an intention to seek election to public office or retention of a judicial office and thereafter has received a contribution or made an expenditure in support of the candidacy. A person remains a candidate for purposes of this article so long as the candidate maintains a registered candidate committee. A person who maintains a candidate committee after an election cycle, but who has not publicly announced an intention to seek election to public office in the next or any subsequent election cycle, is a candidate for purposes of this article. Section 2(2) of article XXVIII of the state constitution.

Cases

colorado Cases

Case Name: Sanger v. Dennis

Citation: 148 P.3d 404 (Colo. App. 2006)

Year: 2006

Case URL: https://www.ravellaw.com/opinions/e7becf8a66bf389f936c9a662f26ad36

Case Summary: Holding that unions did not have to prove rule was unconstitutional beyond a reasonable doubt, because their challenge was an “as applied” challenge; preliminary injunction was not invalid when it granted unions and members all the relief that could be obtained upon a final hearing; unions and members established that they would likely prevail on their claim that Secretary of State exceeded her rulemaking authority; and unions and members established that they would likely prevail on their claim that the rule violated their freedom of association and speech rights.

Case Name: Colo. Citizens for Ethics in Gov’t v. Comm. for the Am. Dream

Citation: 187 P.3d 1207 (Colo. App. 2008)

Year: 2008

Case URL: https://www.ravellaw.com/opinions/ff6d0c5bea644bbf487ae172deee07cb

Case Summary: Holding that Administrative Law Judge (ALJ) did not abuse his discretion by determining that documents evidencing political committee's production and airing of television commercials opposing reelection of political candidate had been sufficiently authenticated; advertisements were electioneering communications under the Campaign and Political Finance Amendment to the Colorado Constitution, rather than express advocacy; advertisements did not fall under “communication made in the regular course and scope of business” exception to electioneering communication; political committee, which failed to identify political candidate in a separate electioneering report, did not satisfy its reporting requirements through its contribution and expenditure reports; ALJ had jurisdiction to impose a penalty due to political committee's failure to comply with reporting requirements; voluntary dismissal by citizens group of its membership contribution claim was not a defense to political committee's claim for attorney fees; and ALJ did not abuse his discretion by finding that citizen group's membership contribution claim was groundless and awarding political committee attorney fees.

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