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The engraving outside Colorado PERA headquarters in the Capitol Hill neighborhood of Denver on Sept. 18, 2018. (Eric Lubbers, The Colorado Sun)

Heading into his eighth and final year as Colorado’s state treasurer, Walker Stapleton could finally say, “I told you so.”

The term-limited Republican had spent his entire tenure on a lonely crusade for public pension reform, warning that a “long-term fix” passed in 2010 hadn’t really fixed anything at all.

So when the Public Employees’ Retirement Association last year acknowledged that the pension’s deteriorating finances were in urgent need of repair, he said it felt like vindication.

“Everything I said about the need to fix this problem seven or eight years ago I think has been borne to be true,” he told The Colorado Sun in an interview. “I’m proud of the fact that I was right on a lot of the things that I said were wrong.”

But when it came time to actually fix it? Stapleton — by his own admission — was largely absent from the public debate.

Walker Stapleton

Now the Republican nominee for governor, Stapleton’s tenure on PERA’s board is perhaps his most significant political legacy, providing insights into his policy convictions and how he would govern if elected the state’s top executive.

On the one hand, he’s been a consistent advocate for reining in pension costs in the face of steep opposition, warning of trouble to come at a time when PERA officials insisted — wrongly, it would turn out — that everything was fine.

On the other, his effectiveness was often undermined by an approach that critics viewed as unproductive at best — and toxic at worst. Many public sector workers — and the unions that represent them — would come to view his vocal criticisms of PERA not as that of a financial watchdog, but as a politically motivated attack on their livelihoods.

In the boardroom, Stapleton’s influence was diluted by sheer numbers — he was only one vote out of 15. But even those who agreed with some of his concerns about the plan’s financial health told The Sun they found his leadership lacking.

The bottom line: Stapleton leaves behind a complicated record, effectively raising awareness through his use of the bully pulpit, but with few policy victories he can point to as his own.

Stapleton v. PERA

After narrowly defeating incumbent Democrat Cary Kennedy in 2010, Stapleton came out swinging in his first year as treasurer, suing the pension and its board, which had refused to release the benefit records of Colorado’s highest earning pension recipients.

The lawsuit would launch his tenure on a polarizing foot, earning praise from fellow conservatives and newspaper editorial boards, but infuriating retiree groups and alienating some of his fellow board members.

Today, Stapleton says he was simply trying to understand the impact of a policy adopted under Republican Gov. Bill Owens that allowed public employees to buy a better retirement package at a steep discount, a scheme that’s now widely viewed by both parties as a financial disaster for the retirement system. The practice added $1.5 billion to the system’s unfunded debt, according to a PERA analysis.

“It was like, ‘Hey, this system is already deeply in debt, it’s taxpayer funded and yet we don’t have the transparency that we need to have in terms of a collective financial understanding of what the liability was of this process specifically to the system,’” Stapleton said.

MORE: Colorado’s PERA board may ditch its longtime financial adviser after $1.3 billion mistake

Retiree groups suspected something more nefarious — that he’d use the information on the top 20 percent of earners for political purposes to gin up public outrage against the pension system and justify deep cuts to benefits.

Whatever his reasons, the lawsuit failed.

Two courts rejected his request for transparency as an unwarranted invasion of privacy. But it would set a tone for the remainder of his tenure, bolstering his credentials among conservatives critical of the pension, yet damaging his ability to build the bipartisan coalitions needed to achieve results.

In an interview, board member Susan Murphy — who consistently agreed with Stapleton’s view that PERA should adopt more conservative financial assumptions — said she never had a problem working with Stapleton, describing him as friendly and professional. But the treasurer’s relationship with the bulk of the board never seemed to recover from the adversarial start.

The lawsuit didn’t just target PERA as an entity, it named his 14 board colleagues individually, accusing them in court of violating their fiduciary duty by refusing Stapleton’s request. That’s a serious charge that would have ramifications in the personal lives of a number of board members, whose day jobs as financial advisers required them to disclose such accusations, even if they hadn’t been proved in court.

“In general, certain people on the board perceived a contentious relationship, and maybe that’s where it started,” said Murphy, a gubernatorial appointee who temporarily lost one of her professional licenses when the lawsuit was filed. “I didn’t take it personally.”

At a 2017 meeting, the tensions boiled over into an outburst from deputy treasurer Jon Forbes, who told the rest of the board, “you guys can all go (expletive) yourselves,” when he was chastised for speaking out of turn.

Forbes would resign at Stapleton’s request. But the treasurer’s apology concluded with a fresh jab at the very people he was apologizing to.

“We don’t condone this language,” Stapleton wrote in a statement to 9News, who first reported the incident. “… But to be clear, if PERA and CEO Greg Smith don’t listen to me and the growing chorus of Coloradans begging them to fix their $30 billion debt, taxpayers across Colorado are going to throw a lot of colorful language around.”

Considerable voice, limited power

This was how it would go for the bulk of Stapleton’s two terms.

In media reports about the pension, he was an ever-present voice of alarm and criticism, offering a gloomy counterpoint to the rosy appraisals from PERA’s staff.

His most significant complaint involved PERA’s rate of return, which in 2010 assumed its investments would grow by an average of 8 percent a year.

The higher the expected return, the more retirement benefits the state can afford at less cost to taxpayers. The lower the actual return, the more the state needs to set aside to meet its obligations. And because of how badly PERA was already underfunded in the wake of the Great Recession, the pension had left itself little room for error if it was wrong.

The sign on Colorado PERA headquarters in the Capitol Hill neighborhood of Denver on Sept. 18, 2018. (Eric Lubbers, The Colorado Sun)

In Stapleton’s conservative view, PERA wasn’t just wrong — it was so far from being right that it was inviting financial catastrophe. That message resonated with Republican lawmakers, who would sponsor more than a dozen bills seeking to put new legislative checks on PERA during Stapleton’s tenure. The legislation went nowhere, but eventually, the PERA board itself would take steps in his direction, lowering the rate to 7.5 percent, and then to 7.25, where it remains today.

“I think in terms of raising awareness he’s been very effective,” said Joshua Sharf, a financial analyst who manages the PERA Project at the Independence Institute, a conservative think tank.

But, he acknowledged, that effectiveness had its limits. “The treasurer has considerable voice,” Sharf said. “What he doesn’t have is considerable power.”

What he also didn’t have were allies among the people he needed to persuade to achieve results. So when it came time to fix the problems he’d spent so much time talking about, his impact was diminished.

In the fall of 2017, he trashed the board’s plan in interviews and editorials. In December, he offered suggestions of his own. But in the spring of 2018, when lawmakers set about to craft the final product, he went uncharacteristically silent.

MORE: Read more Colorado Sun politics and government stories.

He wasn’t at the negotiating table when the bill was drafted. Nor did he testify publicly on the measure, as he’d done on pension-related bills in years past.

“At the time it was really hard to tell whether he was a critic of what was being proposed or whether he was supporting it,” said Terry Campbell, PERA’s lead lobbyist.

Stapleton told The Sun it was a deliberate choice on his part to stay out of the public eye on an issue fraught with political ramifications. Because he’d been so “adamant and outspoken,” he said, “I’m as a result somewhat radioactive in terms of actually getting a deal done, and I didn’t want that to be the case in terms of this particular deal.

“I wasn’t asked to be at the table, and I wasn’t necessarily offended by that,” he said.

But he wasn’t completely disengaged, either. House Majority Leader KC Becker, D-Boulder, confirmed she met with him early in the session to get his thoughts. Republican lawmakers said they relied on his expertise throughout the months-long negotiations, but wouldn’t offer specifics on his contributions.

East view of Colorado Capitol building on Saturday July 21, 2018. Walker Stapleton told The Colorado Sun it was a deliberate choice on his part to stay out of the public eye as state lawmakers worked to fix PERA in 2018 — an issue fraught with political ramifications. (Jeremy Martinez, Special to The Colorado Sun)

Still, Stapleton’s disappearing act resurfaced a longstanding criticism about his involvement that’s been levied against him by Republicans and Democrats alike.

“I think Walker was trying to make political hay out of his position on the PERA board, when he could have been working together with the board to actually make PERA stronger,” said Lynea Hansen, the executive director of SecurePERA, an advocacy group that represents public workers and retirees. “But he didn’t take that approach. Him not showing up (at board meetings) was a great example.”

“It’s unfortunate he wasn’t there”

By his political opponents’ count, Stapleton has attended about half of PERA’s meetings since he took office. By his campaign’s count, his office was represented at closer to 90 percent of meetings — when you include the times he sent a deputy to attend in his place.

U.S. Rep. Jared Polis, a Boulder Democrat who’s running against Stapleton in the governor’s race, has seized on the attendance questions as a major line of attack, launching a website this month that lampoons the treasurer, depicting him as the elusive character from the “Where’s Waldo?” comics.

To Murphy, who has served on the board since 2007, the number of absences wasn’t a big deal. PERA board policy has long allowed state treasurers to send a representative in their place.

“I didn’t see this as out of the ordinary,” she said. “If Walker wasn’t there, I presumed he had important business that trumped being at the meeting. There’s always been a deputy treasurer there when he wasn’t there. I can’t remember an instance where there wasn’t.”

But there was one absence that stood out — the Sept. 22, 2017 meeting in Colorado Springs where the board took its most significant vote in a decade, to propose the reform package that would become the template for Senate Bill 200. The plan cut benefits and raised the retirement age, while boosting contributions from employees and taxpayers. It also established a first-of-its-kind failsafe that would automatically adjust contributions and benefits if the system veered off financial track.

Senate Bill 200, which reformed PERA, was passed by Colorado lawmakers during their 2018 legislative session. Walker Stapleton was absent when the pension board in September 2017 voted to propose the reform package that would become the template for Senate Bill 200. (Screenshot)

In Stapleton’s absence, his deputy voted no. But Murphy said his voice was missing from the discussion.

“He did not share with the board why he did not support the plan or what he would propose instead,” Murphy said. “And so the conversation proceeded without his thinking contributing to it.

“So much work went into that day,” she added. “It’s unfortunate he wasn’t there for any of it.”

Other board members contacted by The Sun declined to be quoted, citing political concerns. A Stapleton campaign spokesman said the treasurer missed the vote to attend an event involving one of his children, but pointed out that Stapleton did attend part of the meeting and much of the planning sessions in the days leading up to it.

Later that year, Stapleton would offer a conservative counter-proposal that would have eliminated the higher taxpayer contributions and replaced them with deeper cuts to benefits, denying retirees any cost-of-living raises until the fund was in better financial shape. He also sought to lower the rate of return to as low as 5 percent — a decision that would have added as much as $18 billion to the $32 billion funding gap the reforms were seeking to close, requiring retirees to forego raises for that much longer.

“That obviously was treated like a bad fart in the wind by people and policy makers,” Stapleton says now. “It just wasn’t going to happen. But from an actuarial standpoint, the reason that interested me is it’s the way to heal the plan and get to an 80 percent funded status the quickest.”

In a column published in The Denver Post in 2017, he also made clear how he felt about PERA’s plan. “The expected rate of return is the lynchpin of the entire funding equation for PERA, and … expecting an average return of 7.25 percent per year is not just unrealistic, it’s insane.”

So it was a surprise when, months later, he came out in tepid support of a bill that had more in common with PERA’s proposal than his own. The bill called for more taxpayer dollars, including $225 million a year from the state. Benefit cuts were nearly indistinguishable from the PERA plan.

And the financial foundation, the rate of return he’d called “not just unrealistic, but insane”?

That was intact, too. The bill passed by the legislature was designed to fix a $32 billion problem that he believed was closer to $50 billion.

So why support a plan so similar to one he opposed? After eight years, he was no longer the only one alarmed by the pension’s finances.

“We had a meeting set up with one of the ratings agencies, and I am fairly certain that they were going to issue a downgrade of Colorado’s credit rating as a result of the pension liability,” Stapleton said. “And that would’ve increased the cost of borrowing across all of our state agencies. And there’s no telling how that would impact the state.”

Stapleton’s lukewarm endorsement was an anticlimactic end to an eight-year crusade, and his decision to remain on the sidelines raises as many questions as it answers about how he would lead as governor. As the state’s top executive, he’d have added influence in the form of three pension board appointments and a bigger megaphone. But with few clear policy victories under his belt, it’s unclear how he’d navigate Colorado’s often divided legislature.

Special to The Colorado Sun Twitter: @brianeason