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Politics and Government

Dark money and big donors fuel the ballot battle over Proposition CC in Colorado

The 2019 election attracts millions in money from nonprofits, whose donors remain hidden despite a new state disclosure law

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Big money is pouring into the Proposition CC campaign – and Colorado voters may never find out where much of it is coming from.

That’s because dark-money nonprofits are contributing heavily to supporters and opponents of the 2019 ballot question to end TABOR revenue limits. That dark money — totaling nearly $3 million — is fueling an advertising battle on radio, TV and elsewhere. 

And a new law aimed at identifying donors behind dark money doesn’t apply to issue committees involved in ballot questions or recall elections. The Clean Campaign Act — championed by Secretary of State Jena Griswold and signed in May by Gov. Jared Polis, both Democrats — requires disclosure of donors to nonprofits only when they contribute to committees involved in candidate campaigns. 

MORE: Colorado Voter Guide 2019: What you need to know about propositions CC and DD before you vote

Griswold defended the law but acknowledged that it was just a first step in improving the state’s campaign-finance laws.

But she noted that court cases involving issue committees present challenges.

“When it comes to issue committees … the constitutional barriers are heightened as to money being directly spent on candidates,” Griswold said. The federal courts have said “the concern of corruption or the concern of quid pro quo is not there with ballot initiatives. I disagree.”

One of the measure’s sponsors, Sen. Mike Foote, D-Lafayette, acknowledged that more work needs to be done to improve Colorado’s campaign-finance laws. “Transparency is the ultimate goal,” Foote said in a statement. “We made some good first steps, but we still have more work to do.”

Colorado Secretary of State Jena Griswold, a Democrat, speaks at a press conference Oct. 16, 2019. (Jesse Paul, The Colorado Sun)

A look at the dark money for and against Prop. CC

Most of the dark-money flowing to supporters of Prop. CC comes from three main groups.

Coloradans for Prosperity, the lead group backing Prop. CC, raised $2 million between Sept. 26 and Oct. 9, according to campaign finance reports filed Tuesday. All told, the group has raised $3.7 million.

The two largest new contributions came from two nonprofits: the North Fund, based in Washington, D.C., and the Strategic Victory Fund, based in North Carolina. Each gave $500,000.

Another nonprofit, Education Reform Now Advocacy, a nonprofit that advocates for low-income students, gave another $300,000 on top of the $100,000 it donated earlier.

Because these groups are nonprofits, they don’t have to disclose the original source of the money to support Prop. CC. And little is known about their specific motivations.

Strategic Victory Fund was created in July, while North Fund was created in late 2018. The latter paid for ads earlier this year advocating statehood for Washington, D.C. 

In an email to The Sun, a North Fund spokeswoman wouldn’t say where the group’s money comes from — just that it “partners with committed community leaders to help make our country a more just, fair and equitable place.”

MORE: The political stakes for Proposition CC are huge. It’s a test case for a major fiscal overhaul in Colorado.

Curtis Hubbard, a spokesman for Coloradans for Prosperity, didn’t answer questions about the nonprofits donating to the pro-CC campaign. He did criticize the group’s primary opponents. “The money that’s coming in from outside groups is far greater on the No (on CC) side than on our side. They won’t even let you see where they’re spending their money.”

In fact, Americans for Prosperity, a national political nonprofit political organization affiliated with billionaire Charles Koch that backs conservatives causes, spent more than $1.1 million to oppose Prop. CC. An affiliated state-level issue committee is reporting the donations from the national group as in-kind services for consultants, advertising, canvassing and more. But there is no detail on what vendors are being paid or who donated the money.

Two other groups involved in the campaign have a mix of donors.

Great Education Colorado, an issue committee, raised $126,000 — most of it from its related nonprofit.

The No on CC committee, affiliated with the Independence Institute, has raised about $88,000. Of that, $23,000 comes from services provided by the nonprofit institute, which supports limits on government spending. Another nonprofit, Colorado Rising Action, put in $10,500 worth of in-kind services. The group has spent only $1,075 beyond those in-kind services. 

The committees working to recall lawmakers also don’t have to report their donors. 

Democracy First Colorado, which is poised to defend Democratic office-holders from recalls, received $150,000 from Education Reform Now Advocacy, $100,000 from Everytown for Gun Safety and $75,000 each from America Votes and Conservation Colorado. All are nonprofits that, under Colorado Law, aren’t required to disclose their donors. 

Groups supporting the recalls mostly received funding from individual donors.

Lisa Weil, center, the executive director of Great Education Colorado, speaks at a kickoff rally Oct. 2, 2019, for supporters of Proposition CC. (John Frank, The Colorado Sun)

Some big donors are public, but other groups don’t even file reports

The groups supporting Prop. CC do have plenty of named big donors. 

Retired University of Denver Chancellor Daniel Ritchie recently gave another $400,000 to the campaign behind the ballot question, bringing his total donations to $750,000. He also donated $50,000 to Great Education Colorado.

Billionaire philanthropist Pat Stryker donated another $150,000, bringing her total to $500,000. Patrick Hamil, CEO of Oakwood Homes, put in $100,000. Several other individuals and businesses also donated to Coloradans for Prosperity.

Meanwhile, two other organizations seeking to influence voters on Prop. CC have not filed any reports about their donors or spending. 

A nonprofit group called Defend Colorado is airing TV ads against the ballot measure. It was created in December, and Republican political operatives Alan Philp and Sean Duffy are listed on advertising documents as organizers.

MORE: Proposition CC explained: What it means to end the spending caps in TABOR and the money at stake

That group’s ad features former GOP Gov. Bill Owens in opposing CC. Defend Colorado also has run Facebook ads on oil and gas issues, which is the group’s primary focus, along with economic viability, Duffy said. He wouldn’t say whose money is behind the group.“It comes from private donors,” he told The Sun.

Colorado Union of Taxpayers is airing radio ads against Prop. CC. The group is spending at least $4,001 on radio ads that with run through Election Day, according to a contract with iHeartMedia.

Stephen Bouey, the campaign-finance manager for the secretary of state, said those two nonprofits wouldn’t have to file as issue committees if opposing a specific ballot initiative isn’t their major purpose. And they wouldn’t need to report spending on advertising because they’re not mentioning candidates.

“The only information you’d have for that group is that ‘paid for’ information” on ads, he said. That requirement was included in this year’s law changes.

Colorado tried to define the “major purpose” at one point, and that definition was overturned by federal courts in one of several decisions against the state over regulation issue committees.

The issue of dark money is one that Patrick Potyondy, policy manager for Colorado Common Cause, said his organization would support addressing strengthening the law.

“Pretty much every campaign-finance law at the end of the day can be strengthened, made a little better,” he said. “Coloradans and Americans deserve to know who’s spending that money.”

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