Politics in Colorado have a reputation as being clean and corruption-free. An ongoing investigation by the Colorado Times Recorder into the personal financial disclosures of the state legislature, however, calls this reputation into question.
“Colorado politics are boringly clean,” longtime political columnist Mike Littwin said in 2015, echoing the sentiment of lawmakers and commentators who often point to the state’s budgeting process, online campaign finance database, and open meeting laws as the gold standard for ethics in government.
The reputation is not entirely unearned. The state budget process is noteworthy for its transparency — the Center for Public Integrity article linked above rates the process as a B+ — and Colorado can lay claim to passing the nation’s first Sunshine Law for open meetings in 1972.
Defenders of the state’s ethics and transparency standards can also point to the creation of the Independent Ethics Commission in 2006, or to the personal financial disclosure forms filed by every lawmaker every year, or to the fact that Colorado has never been subject to the steady drumbeat of public corruption trials and convictions that people associate with states like Illinois, New York, and New Jersey.
Far from substantiating Littwin’s claim that Colorado politics are “boringly clean,” though, the Colorado Times Recorder’s investigation — which will unfold over a number of stories — found that members of the state senate currently own thousands of acres of land, millions of dollars worth of real estate, and at least 13 separate companies that have never been declared to the public.
All of this — every filing of a false or incomplete disclosure form, every omitted business interest or piece of property — is technically illegal, but there’s no cop on that beat. There isn’t even a police station in that neighborhood.
Instead, what the Colorado Times Recorder’s investigation found is a system suffering from bigger problems: an understaffed ethics commission, an unaudited financial disclosure system, and no meaningful defense against corruption by elected officials other than the honor code.
A History of Sunlight
Transparency in government has been understood as a central feature of democracy for centuries and has a long tradition as an American ideal. Patrick Henry said that a people could never be free “when the transactions of their rulers may be concealed from them,” while Chief Justice of the U.S. Supreme Court, Louis Brandeis, famously referred to sunlight as “the best of disinfectants.”
Despite the long history of reverence for the concept of transparency, however, its actual practice has often lagged behind. Political fundraising and spending, for instance, were not tracked or monitored in the United States until 1974. The stocks, real estate holdings, and business interests of members of Congress were not required to be disclosed to the public until four years after that.
“[Legislators] are charged with making decisions which are supposed to be in the public interest, not in their own personal interest.”
The era of politicians disclosing their personal financial interests to the public began in large part due to the prolific malfeasance of Richard Nixon. The revelations of the Watergate scandal led to a wave of ethics laws at the state and federal levels.
Colorado led the way in the post-Watergate reforms, passing the nation’s first Sunshine Law to mandate open meetings, in addition to the Public Official Disclosure Act of 1972. Democratic majorities in DC, meanwhile, passed the Ethics in Government Act of 1978, which required members of Congress to file personal financial disclosures. The federal act was then emulated in a number of other states.
“The statute exists,” says Jeffrey A. Roberts of the Colorado Freedom of Information Coalition, regarding the Colorado law mandating personal financial disclosures, “because state legislators and other elected officials in Colorado are charged with making decisions which are supposed to be in the public interest, not in their own personal interest.”
Indeed, that is the reasoning behind most transparency and anti-corruption laws: citizens need to be able to trust that the people operating the levers of power are doing so for the common good, not simply to enrich and empower themselves.
If trust in government was the goal, though, the post-Watergate reforms have fallen short. A Pew Research poll conducted in late 2018 shows that Americans’ confidence in government is near an all-time low and that 64% of Americans struggle to trust what elected officials say.
Despite the general level of distrust in the federal government, though, Colorado has long maintained its reputation as, in the words of Mike Littwin, “boringly clean.”
But is it?
“Nobody really knows,” says Jane Feldman, former executive director of the state’s Independent Ethics Commission and a current member of the Denver Board of Ethics.
If by “boringly clean,” Littwin means that Colorado politicos have a short track record of being caught with their hands in the proverbial cookie jar, then he is correct. The recent history of political malfeasance in Colorado is sparse. In 2015 then-Senate President Bill Cadman (R-Colorado Springs) was accused of improperly disclosing his role as a board member for the American Legislative Exchange Council — though the secretary of state later ruled that the role was not required to be disclosed because Cadman was not compensated for it and he subsequently added the position to his form. There was also a small dustup in 2016, when then-state senator Jon Keyser (R-Morrison) failed to file his 2016 disclosure, and omitted his personal residence from the assets listed on his 2015 disclosure. In the aftermath of that scandal, Denver7 discovered that twelve other lawmakers had also failed to file the required disclosures. None of these omissions resulted in charges, fines, or other consequences beyond being named in a news story.
In the six years since, the personal finances of state legislators have failed to pique much interest or discussion, and no one has been caught with their hands in the cookie jar. What the Times Recorder’s investigation uncovered, though, is that no one is watching the cookie jar in the first place.
A Paperwork Problem
The personal financial disclosures filed annually by elected officials in Colorado are, in effect, a showpiece.
Theoretically, the personal financial disclosure system is intended as a means of monitoring conflicts of interest, building public trust, and determining which legislators are required by personal interest to recuse themselves from which votes. In reality, though, the current system is unequipped for those tasks.
The theory works like this: every year, candidates and incumbent officeholders fill out and submit a form declaring assets, debts, business interests, and various sources of income, which are then submitted to the Secretary of State and available to the public. If malfeasance is suspected or detected, the Independent Ethics Commission will investigate and make a ruling.
But that’s not how it works at all.
When it leaves the realm of theory and enters practice, the process is remarkably flawed. It’s true that candidates and incumbent officeholders submit a form each year. But it is also true that most incumbents opt to submit a one-page version of the form which consists entirely of a checked box reading “ANNUAL UPDATE – NO CHANGE” — and that many incumbents submit this abbreviated version of the form even when there were changes to their financial situation in the previous year.
It is also true that these forms are submitted to the Secretary of State’s office and enter the public record. They are not, however, available for access on the Secretary of State’s website for easy public review. Nor, as it turns out, does the Secretary of State have the authority to investigate or enforce false or incomplete filings -– though the office does penalize late filings with a fine of $50 per day.
Worse still, the Independent Ethics Commission does not have the authority to initiate investigations into false or incomplete filings either — and, in fact, cannot take any action before a private citizen files a complaint. Even if the IEC did have the authority to investigate the elected officials’ personal financial disclosures, it would struggle to do so due to its staffing levels. In one small bit of good news, though, a budget appropriation from the 2022 legislative session is set to double the Independent Ethics Commission’s staff — from one to two.
In reality, the personal financial disclosures filed annually by candidates and elected officials are never checked, never audited for accuracy and completeness, and never subject to any level of enforcement even though the filing of a false or incomplete financial disclosure is a misdemeanor under Colorado law. Technically, local law enforcement could charge a legislator with criminal conduct under the Public Official Disclosure Act, but there is no history of that happening.
Many other states have mechanisms for auditing and investigating disclosures. Some, like Kentucky, have “legislative ethics committees” which monitor the need for legislators to recuse themselves from certain votes. Others, like Connecticut, have independent ethics offices with the necessary staff and budget to provide meaningful oversight.
Colorado doesn’t do any of that.
Taken together, what this means is that accurate disclosure of the personal financial interests and entanglements of elected officials in Colorado is guaranteed only by the conscience of each individual, because there is no one to check to see if they lied, and no one likely to enforce penalties if they did.
“Really, on $35,000 a year you have a big house in Park Hill? There’s something that needs to be explained.”
Even if everyone filled out the required form with perfect accuracy and honesty, though, the people of Colorado would be deprived of certain necessary information. For instance, many members of the General Assembly report owning companies — from large corporations to personal LLCs — but are not required to disclose what kind of work those companies are engaged in.
It’s an environment that frustrates ethics professionals, as watchdog organizations are left with an incomplete and often misleading view of elected officials’ financial entanglements.
“Really, on $35,000 a year, you have a big house in Park Hill? There’s something that needs to be explained,” Feldman said in an interview with the Colorado Times Recorder.
“I think in a perfect world, we would have much more robust financial disclosures,” she said, “and you’d know not just the name of their company, but you’d know what sort of work [they specialize in].”
Foxes Chairing the Henhouse Committee
The gaps in Colorado’s disclosure system have major implications for government ethics and transparency in the state.
The General Assembly has rules requiring members to recuse themselves from voting on issues in which they have a “direct personal financial interest,” but lack specificity as to who is supposed to enforce the recusal rules or when exactly they apply. That ambiguity, when added to a disclosure system without a guarantee of honesty or accuracy, makes the recusal rule little more than an optional courtesy.
This issue is of particular importance given Colorado’s “citizen legislature,” which meets for only five months out of the year, meaning most legislators have other jobs, and other financial interests.
There is a benefit, experts say, to the subject-matter knowledge of citizen legislators who also have separate careers — such as the House Education Committee being chaired by Rep. Barbara McLachlan (D-Durango), who served for more than 20 years as a high school teacher.
“Sometimes their job informs their lawmaking, and it can work to the advantage of the public interest because they know a lot about a certain subject,” Roberts said. But, “obviously they have to be really careful when some piece of legislation could actually pertain to something they might have a financial interest in.”
There is a difference, then, between a legislator who is a teacher helping to craft education policy, and a legislator who owns a mining company helping to craft natural resources policy — or, in between the two and of particular relevance to the Colorado Legislature, a legislator who is a landlord voting on renters’ rights legislation. The gaps in the disclosure system, and on the form itself, make it much more difficult for ethics professionals to draw a line between these behaviors and render effective enforcement impossible.
What could improve the system? Oversight, says Feldman.
“There needs to be a lot more transparency, and I think someone needs to be going through saying, you know, ‘You’re voting on giving contracts to a construction company and you have a financial interest in that construction company,’” she said.
An Ongoing Investigation
As it stands, there is no one tasked with doing what Feldman suggests, and what many other states do — and it would likely require legislation to change that status quo, meaning the legislature would have to vote to apply greater transparency measures to itself.
That is why the Colorado Times Recorder has opened an ongoing investigation into the personal financial disclosures filed by members of the Colorado General Assembly, beginning with the state senate.
The investigation, which has involved comparing each senator’s filed financial disclosure against the public record, reveals a broad variety of approaches various senators have taken to the matter of disclosing their personal finances, from the intensely scrupulous to the plainly false.
The investigation also highlights some of the difficulties legislators face in filling out a somewhat ambiguous form: do you need to include your car loan? What about your kid’s tuition? That board you serve on? Many legislators err on the side of caution when it comes to these ambiguities. Sen. James Coleman (D-Denver), for instance, filed an addendum earlier this year when he paid off an auto loan, making sure to shift his truck from the liabilities category to the assets category.
Others seem to submit the form as an afterthought — hand-scrawled in pencil, clearly done in a hurry, but largely accurate.
Our investigation is not concerned with those who have done their best to scrupulously report their finances, nor with those who have reported them sloppily but accurately. Rather, our investigation focuses on the others: the handful of members of the state senate who have failed to disclose homes, businesses, and thousands of acres of land to the public, amounting to millions of dollars in concealed assets and interests.
The findings of this investigation will be published over the coming weeks, revealing those concealed assets in detail and asking the public to reassess whether or not Colorado’s political scene has really earned–or simply laundered–its corruption-free reputation.
“They keep saying, ‘Oh, it’s a relatively clean state,’” Feldman remarked of Colorado’s reputation, “But nobody really knows.”
Stay tuned for next week, when the Capitol Gains series will look at the legislature’s most prolific violators of the Public Official Disclosure Act, and will provide a detailed breakdown of the assets and income streams that they have concealed from voters.