Political consulting firm Kennedy Enterprises must return about $235,000 it earned gathering signatures intended to get 2018 Republican gubernatorial nominee Walker Stapleton on the primary ballot, a Denver District Court judge ruled on Friday
Stapleton sued the signature-gathering firm after fraud allegations about the more than 21,000 signatures Kennedy collected at a cost of $11 a signature nearly derailed his campaign.
Judge Morris B. Hoffman found that Kennedy, a longtime fixture in Colorado’s GOP campaign circles, breached its contract with Stapleton by failing to adequately investigate claims that one of the people gathering the signatures had done so unlawfully.
“It’s clear to me that Mr. Kennedy had a positive duty” to do more than what he did, Hoffman said of Daniel Kennedy, who owns and operates the firm.
Stapleton rescinded signatures collected by Kennedy that had been submitted to the Colorado Secretary of State’s Office last year after learning about the existence of Daniel Velasquez, a man who said in a recording he collected signatures for the campaign even though he did not meet the legal criteria to do the work.
Stapleton, in the lawsuit and during trial, said it made the claims because Daniel Kennedy repeatedly denied that Velasquez was one of the many subcontractors collecting signatures for the Republican.
But on April 10, 2018, Stapleton revealed to reporters that his campaign had discovered that Velasquez did exist and that he had been collecting signatures even though he wasn’t legally able to do so. At the time, gatherers needed to be Colorado residents and registered to the same political party as the candidate for whom they were working, as well as be signed up with the state.
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Stapleton’s lawsuit argued that Kennedy either knew about or should have done more to find out about Velasquez.
During trial this week, Kennedy’s attorney suggested that Velasquez had not gathered signatures unlawfully because he was under the supervision of a verified, authorized signature gatherer. She also said that Stapleton might have acted too quickly in rescinding the signatures.
But Hoffman said Stapleton really had no choice. If he moved forward with the signatures he had submitted, he was risking political fire from his primary rivals, not to mention his slot on the ballot.
“He did, I think, the only reasonable thing that someone could have done,” Hoffman said.
Stapleton said he felt the ruling Friday cleared his name. He said he hopes the case will give the legislature reason to change the expensive and complicated signature-gathering process many candidates use to get on the ballot.
“I’d like to see if they can make it more equitable for candidates,” Stapleton said. “Because right now, not only is the process becoming more expensive, which precludes candidates who can’t afford it, but also (there’s) an increased desire, I think, to skirt the law. Because when you have more money to be made, you’re willing to do things in a less-thorough process.”
Stapleton said in retrospect, he thinks the signature problems did “untold harm to our campaign,” including driving away donors and giving some the impression that he had dropped out of the race.
“This was never about the money,” Stapleton said, explaining that most of the judge’s award will go toward covering attorneys’ fees. “It was about a deeply flawed process being exposed so that candidates in the future, from both political parties, can benefit from what has taken place over the past week in this courtroom.”
In the end Stapleton made the primary ballot by winning support of delegates in the Republican statewide assembly. He then was chosen as his party’s nominee for governor, but lost by a wide margin to Democrat Jared Polis.
Susan Klopman, Kennedy’s attorney, said her client hasn’t decided whether to appeal the ruling.
“While we are disappointed in the end result, it’s not any statement about the ethics or the longstanding, successful performance of Kennedy enterprises,” she said.
Klopman added: “The court’s decision rested upon assessment of a technical provision in the contract regarding the obligation of cooperation between the parties. Basically, the Court found that Mr. Kennedy could have asked more questions of more individuals.”
Hoffman rejected another claim by Stapleton that Kennedy had committed civil theft, which could have significantly raised the amount he was awarded.
In addition to the $235,000, Kennedy Enterprises is ordered to pay Stapleton interest and costs related to the case.
The ballot-access process through signature gathering has been problematic for a number of candidates in recent years, derailing the 2016 U.S. Senate primary campaign — and arguably the political career — of Republican Jon Keyser and nearly costing U.S. Rep. Doug Lamborn, R-Colorado Springs, his reelection in 2018.
With so many Democrats — more than 10 — running in the 2020 primary for U.S. Senate, it’s likely that candidates will face problems with signature gathering in the coming year.
Updated at 8:10 a.m. on Aug 10, 2019: This story has been updated to correct that Kennedy Enterprises collected more than 21,000 signatures for the Stapleton campaign.