2018 CO 7
Colo.2018Background
- Alliance for a Safe and Independent Woodmen Hills ("Alliance") ran pre-election postcards and social-media activity opposing a board candidate and was adjudicated a political committee under Colorado law.
- Campaign Integrity Watchdog ("Watchdog") complained Alliance failed to register and report contributions/expenditures; an ALJ fined Alliance and ordered registration and reporting.
- Alliance later incurred roughly $42,000 in legal fees defending a post-election defamation suit and for appellate activity; the source/payor of those fees was not reported.
- Watchdog filed a second complaint asserting those legal payments should have been reported as both expenditures/disbursements and contributions, and that contribution limits were exceeded.
- The ALJ held the legal expenses were not "expenditures" but were "contributions," yet concluded the contribution-reporting requirement was unconstitutional as applied to Alliance for those post-election legal expenses.
- Colorado Supreme Court affirmed that the legal fees are contributions (but not expenditures) and reversed the ALJ’s as-applied constitutional ruling, remanding for further proceedings consistent with that holding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payments for Alliance’s legal defense are "expenditures" requiring reporting | Watchdog: Legal payments are committee-related spending and thus reportable as expenditures/obligations under §1-45-108 | Alliance/Secretary: "Expenditures" means express advocacy; post-election legal fees are not for express advocacy and so are not reportable | Held: Not expenditures — "expenditure" limited to express advocacy (Buckley magic-words test); obligations tied to expenditures only |
| Whether payments to third parties for Alliance’s legal defense are "contributions" under Colo. Const. art. XXVIII §2(5)(a)(II) | Watchdog: Payments to law firm/court were payments to third parties for the benefit of Alliance and thus contributions | Alliance/Secretary: Section should be narrowly read to require a purpose of influencing elections; post-election legal fees lack that purpose | Held: Contributions — plain text covers any payment to a third party for the benefit of a political committee; narrow purposive read rejected |
| Whether the reporting requirement is unconstitutional as applied to Alliance for post-election legal fees | Watchdog: Reporting is constitutional; electorate and anti-corruption interests apply | Alliance/Secretary: Reporting burdens First Amendment rights because these contributions are unrelated to electoral advocacy | Held: Not unconstitutional as applied — Buckley/Citizens United justify disclosure for groups whose major purpose is influencing elections; money is fungible and electorate/anti-corruption interests apply |
| Whether statutory phrase "obligations entered into" requires reporting of all obligations (e.g., legal retainer) | Watchdog: "Obligations entered into" sweeps broadly to all committee-related disbursements/obligations | Alliance: Phrase is narrow and should be read consistent with definition of "expenditure"; otherwise absurd to report all obligations but only narrow expenditures | Held: "Obligations entered into" limited to obligations to make expenditures (consistent with statutory definition); broader administrative rule was void to extent it conflicted |
Key Cases Cited
- Buckley v. Valeo, 424 U.S. 1 (upheld disclosure/reporting requirements; adopted "magic words" express-advocacy test)
- Citizens United v. Federal Election Comm'n, 558 U.S. 310 (upheld disclosure for independent electioneering groups; informational interest sufficient)
- McConnell v. Federal Election Comm'n, 540 U.S. 93 (discussed disclosure burdens; later overruled on other grounds)
- Colo. Ethics Watch v. Senate Majority Fund, LLC, 269 P.3d 1248 (Colo. 2012) (Colorado discussion of express-advocacy/magic-words limitation)