Measures to lower all state income taxes, require voters to approve fees could make November ballot
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After Gov. Jared Polis announced Saturday that he would allow petition-gathering by mail and email, the conservative Independence Institute think tank in Denver announced a petition drive Monday to ask voters in November to reduce the state income tax rate from 4.63% to 4.55%.
Initiative 306 is backed by a group called Energize our Economy, and it’s more timely than ever, said proponent Jon Caldara, president of the Independence Institute (and a Colorado Politics contributing columnist). The coalition also includes Colorado Rising State Action, Unite for Colorado and Americans for Prosperity.
The measure runs counter to Initiative 271, which would lower the rate to 4.58% for those earning less than $250,000 and raise it to 7% on earnings above that up to $500,000.
The aim of No. 271, promoted by Carol Hedges of the Colorado Fiscal Institute, is to raise $2 billion a year to balance the state budget, post-pandemic
Supporters of both initiatives will have to collect 124,632 signatures from registered Colorado voters to qualify for the ballot in November.
“We think that a small tax cut for everyone makes a lot more sense than a $2 billion tax increase,” Michael Fields, executive director of Colorado Rising State Action, said in a statement. “And even if both pass, the tax cut only has to win by one vote over the tax hike to be implemented, so we like our chances.”
Caldara said Colorado’s “on fire” economy could be attributed to the state constitution’s Taxpayer’s Bill of Rights and Colorado’s flat state income tax.
“We look forward to giving the voters a real choice between a progressive tax increase, which will be billed as a middle-class tax cut, and a real tax cut for every Coloradan,” he stated. “Question is: which one is actually the tax cut? Hint: Not the ballot question that starts “Shall state taxes be increased $2 billion annually.”
State Sen. Jerry Sonnenberg, a Republican from Sterling, is a prime supporter of the measure to lower the income tax rate. Caldara and Sonnenberg officially filed the ballot measure paperwork with the Secretary of State’s office last month.
“Small business owners all over Colorado are feeling the pain of these shutdowns, and their incomes have suffered as a result,” Sonnenberg said in a statement released by the Independence Institute on Monday. “In many rural communities, there are no big-box stores, just small businesses. An across-the-board income tax rate reduction will allow these business owners and their employees to keep and spend more of their own money.
“State government doesn’t need to increase its already bloated budget.”
Jesse Mallory, the state director of Americans for Prosperity, said, “The question is simple: who needs your money most right now, you or the government? Colorado voters should have that choice in November.”
The same coalition also is collecting signatures for ballot initiative to require fees to gain voter approval, the same way they do tax increases under the Taxpayer’s Bill of Rights.
“For too long, politicians have used fees as a way to circumvent taxpayers and grow state government. Large fees pose the same threat to family budgets and our economy as significant tax hikes,” Unite for Colorado CEO Dustin Zvonek said in a statement. “Coloradans have the right to vote on new or higher taxes, we should have the same right when it comes to significant new fees.”
Initiative 295 would apply to new state enterprises of $100 million or more over its first five years.
Colorado Rising State Action tees up ballot initiatives to inoculate TABOR
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If there are still officials trying to get around Colorado’s Taxpayers Bill of Rights by turning to government fees instead of new taxes, a proposed ballot initiative could complicate things.
Next week the Secretary of State’s Office title-setting board is expected hear a pitch for three November ballot measures on three questions, initiatives 273 to 275.
The initiatives seek to require that a “fee-based enterprise” that is put forth by a state government be subject to voter approval.
“The success fiscal conservatives have had on the ballot has forced more deceptions on the liberal side about how do they get more revenue, and that’s why this is so important, because they want to go around TABOR and not go to a vote of the people,” said Michael Fields, the executive director of Colorado Rising State Action, which filed the proposal.
The rule would apply only to large government state enterprises, not local ones, that see to collect fees. The three proposed variations would affect fees that result in $50 million in revenue over three years, as projected by legislative analysts. The two other proposals peg $100 million over five years or $50 million over five years.
Scott Wasserman, president of the Bell Policy Center think tank in Denver, said the idea is rife with long-term problems for a prosperous state struggling to keep up with growth and support basic services.
“These measures are either designed to be a political distraction or to cause real pain,” he said. “Our fiscal ship is sinking and some of us are working our hearts out to keep it afloat. These guys are busy burning the lifeboats.”
Only one of the three variations would ultimately make it on the ballot, if proponents can collect 124,632 valid signatures from registered voters.
Those who contend the state is cash-strapped by TABOR — which sets a spending cap based on inflation and population growth — have tried and failed repeatedly over the years to get voters to subvert it, with an outright repeal vote in the works behind the scenes.
Fields is confident voters will support it the same way they’ve rejected previous attempts on TABOR.
“This just allows voters to weigh in,” he said. “Whether it’s taxes or big fees, people don’t really care; it still impacts them and they want to vote on it.”
The proposed measure this year would be a statutory change, not constitutional.
If proponents had chosen to try to amend the state constitution, they would have had a more difficult bar, because of Amendment 71 passed by voters in 2016. A constitutional amendment now requires valid signatures from at least 2% of the total registered electors in each of the 35 Colorado state Senate districts. The measure also would have had to pass with 55% instead of a simple majority.
The lower bar, however, leaves the measure vulnerable to future changes by the legislature, which could undermine the purpose if Democrats continue to win majorities in the House and Senate and maintain their grip on the governor’s office.
Fields said he was confident that the will of the voters would, or should, prevail.
Kafer: I’m beginning to believe Democrats want Colorado’s drivers to be miserable
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Deep within the bowels of Denver International Airport the Illuminati gather for their secret meetings. A bloodthirsty Chupacabra stalks sleeping cattle in the San Luis Valley to gorge upon their entrails. Aliens or government spy drones or both wander the night sky in northeastern Colorado. Centennial State conspiracy theories abound, but I’ve never given them credence. And yet, while languishing in the daily bottleneck at the Santa Fe Drive and Interstate 25 interchange, breathing the smog from idling cars, I have discovered a real conspiracy in our state: Democrats in the legislature have no interest in fixing our transportation problems, and they intend to exploit our frustration to raise taxes.
Let’s examine the mounting evidence.
As part of a 2018 bipartisan agreement to fund transportation about $500 million will be spent this year from the general fund. That will barely touch the multi-billion dollar backlog in unfunded projects. Republicans would like to make an additional $300 million investment in roads this year. Democrats oppose allocating more money from the $12 billion general fund for transportation because they say it would divert funds from other priorities — prisons, schools, public health, and the like. Yet, they had no problem authorizing an expansion of full-day kindergarten in the last session. At nearly $200 million, the program will cost more than lawmakers budgeted.
Democrats also blew $800,000 to study how the government can “increase the amount of retirement savings by Colorado’s private-sector workers.” Have they heard of an IRA and or a savings account? These savings strategies already exist. Those of us in the private sector who save for retirement could have told them all about it without spending a dime of taxpayer money. Likewise, research on the problems plaguing government retirement plans like PERA and Social Security are available on the internet for free. Imagine that.
Although Democrats have no additional money for roads, the governor has proposed spending $27 million to expand subsidized preschool programs, $10 million for a family leave benefit for state employees, and other new programs.
It’s obvious: progressive pet projects are the priority, not congested roads.
Democrats say they don’t want to act unless there is another dedicated funding source for transportation. When Republicans proposed reallocating such a source, Democrats killed the bill. Senate Bill 44 would have dedicated 10% of vehicle sales and use taxes to highway projects. Next year the state would have spent $366 million on roads.
So what is their solution? Raise taxes directly or in the form of new fees. Never mind that Coloradans already pay a driver’s license fee, commercial license fee, vehicle registration fee, public highway authority fee, emissions control fee, additional highway fee, emergency medical services fee, additional registration fee, motorist insurance identification fee, motorcycle surcharge fee, diesel fee, peace officers standards and training board fee, county road and bridge fee, plug-in electric vehicle fee, road safety surcharge fee, and a bridge safety surcharge fee. The advantage of calling a tax a fee is that the legislature doesn’t have to seek permission from voters.
In addition to all these fees, Colorado taxpayers also pay taxes for transportation including sales taxes on new vehicles, taxes on commercial transportation, and a 22 cent per gallon tax on gasoline, a rate that is midway between the state’s southern and northern neighbors.
Democrats believe Coloradans are open to a new tax on top of all of the taxes, fees, surcharges, and tolls we already pay. Did the politicians not notice the results of the past two elections? Voters rejected tax increases not once but twice. The message is pretty obvious: we already pay enough taxes and expect the legislature to spend what we give them on essential government serves like roads.
Perhaps they think that if we sit long enough at the Santa Fe and I-25 interchange breathing fumes that we’ll beg them to raise taxes. That appears to be the plan: refuse to fund roads with the money available, provoke frustration, then raise taxes. While not worthy of a Dan Brown novel, it’s a conspiracy theory worth contemplating while you’re wasting time in traffic.
Krista Kafer is a weekly Denver Post columnist. Follow her on Twitter: @kristakafer.
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Hickenlooper faces renewed pressure and questions about his administration’s spending in final months
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A little-noticed government account that is paying ongoing legal bills related to an ethics complaint against U.S. Senate candidate John Hickenlooper is facing renewed scrutiny even as the Democrat’s allies continue to block requests for an audit of the spending.
In its final months, the former governor’s administration used federal funds from a 2003 account to cover a prominent Democratic attorney $525-an-hour fee and spent $13,385 for a legacy website designed to tell the story of how the governor and his team “paved the way for Colorado’s journey and growth.”
A Republican state senator requested an investigation of the spending in December and again Tuesday at the Legislative Audit Committee only to see Democratic lawmakers defeat both attempts in party-line votes.
But the questions surrounding the spending continue. Hickenlooper’s top rival in the Democratic U.S. Senate primary is joining the call for the audit. And now a Democratic lawmaker is pursuing legislation to get better answers about the off-budget spending by the executive branch.
State Sen. Dominick Moreno, D-Commerce City, told The Colorado Sun and CBS4 Denver that the Joint Budget Committee would draft a bill this year to require the governor’s office and state agencies to disclose millions in spending from dozens of federal accounts that exist outside the normal appropriations process.
One of those accounts is the Jobs and Growth Tax Relief Reconciliation Act account that the Hickenlooper administration used. The fund started in 2003 with $146 million in federal stimulus money designed to help the state balance its budget after the 2001 recession. The Hickenlooper administration planned to close it, but new details show it remains active with a nearly $1 million balance.
“We can certainly debate all day whether (Hickenlooper’s spending) was an appropriate use of funding — that’s a valid debate,” Moreno said. “My concern is really more about what is the scope of all these funds and how can we make sure we get a better handle on them.”
A veteran budget writer, Moreno said he didn’t learn about how federal funds were spent under the prior governor until Republicans raised the question before the audit committee in December. Now, Moreno wants answers. The account in question, he said, “is not the only fund that has fallen in this weird purgatory space where no one really has control over it.”
In a December interview, Hickenlooper told The Colorado Sun that he was unaware of how his administration spent the federal funds, despite it being controlled by his chief of staff and a chief administrative officer.
“I don’t know,” he said. “I can’t describe how many different accounts there are. They don’t come to the governor and say, ‘We are going to use this account, going to use that account.’”
An ethics complaint filed by Republicans led to bigger questions
The questions about the Hickenlooper administration’s spending extend from an ethics complaint filed in October 2018 alleging the governor accepted free flights and other travel expenses in violation of the state’s gift ban. The complaint was filed by the Public Trust Institute, an organization founded by a former Republican lawmaker that doesn’t disclose where it gets its funding.
A preliminary investigation by the state’s Independent Ethics Commission found Hickenlooper only repaid the owners of the aircraft in one of the situations in question. And regarding travel to the Bilderberg conference in Italy, a compliance officer reported to the commission, in documents reviewed by The Sun, that the participants did not pay for all the costs.
Earlier, Hickenlooper said that he paid for the travel, or accepted them as gifts from friends which are exempt from disclosure. Asked about the contradiction, Hickenlooper told The Sun in December that he believed he paid all the costs related to the Bilderberg trip and suggested the complaint amounted to a “clerical error.”
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“The question I tried to ask myself anytime that I was in any of these (situations): Is this somehow a special benefit to me, and am I going to benefit or make money out of this?” he said. “In this case, I don’t see any special benefit to me. I tried to (comply with the rules) — I did everything the best I could.”
His case is scheduled for a hearing that starts March 24, right in the middle of the Democratic caucus nominating process in which Hickenlooper is competing with a handful of rivals to qualify for the party’s U.S. Senate primary in June. A spokeswoman for the Public Trust Institute told The Sun on Thursday that they plan to call Hickenlooper to testify at the hearing.
The cost of Hickenlooper’s ethics defense adds to the controversy surrounding ethics case
The cost of Hickenlooper’s defense against the complaint became an issue after The Denver Post reported in late 2019 that the remaining money in the federal recession recovery fund was tapped to pay his legal bills and cover the cost of his legacy website.
The legal bills from Mark Grueskin, a prominent Democratic attorney at the law firm Recht Kornfeld, topped $40,000 through mid-November, according to records reviewed by The Sun, and are expected to increase significantly as the case continues.
Because the complaint related to the governor’s official duties, the state became obligated to pay for his defense. Then-Attorney General Cynthia Coffman, a Republican, appointed Grueskin as a special assistant attorney general in October 2018, instead of assigning one of her lawyers to handle the case. The hiring of outside counsel is a common arrangement.
A week later, Hickenlooper’s office agreed to pay the $525-an-hour rate as part of a contract with Grueskin, who declined to comment on the matter Thursday.
A review by The Sun and CBS4 discovered the rate is well above what it would have cost the state to assign a deputy attorney general. For the current fiscal year, the estimated cost for legal representation from the attorney general’s office is $111.93 an hour, according to an agency spokesman. The General Assembly caps outside attorney fees at $200 an hour, which the chief legislative attorney says is below the current market rate.
Asked if the $525-an-hour rate was appropriate, a Hickenlooper spokeswoman did not respond directly to the question.
Hickenlooper ally comes to his defense as source of spending questioned
In addition to the cost, Republican lawmakers are raising issues about the source of the payments to Hickenlooper’s attorney.
Colorado received the money from the federal tax relief in 2003, and the law gave then-Gov. Bill Owens, a Republican, the ability to spend it on “essential government services” or the costs to comply with federal mandates — requirements that were codified in an executive order. The only limitation outlined in the federal law restricted spending to “types of expenditures permitted under the most recently approved budget for the state.”
The federal dollars went to a litany of miscellaneous expenses in the past two decades, according to a Sun/CBS4 review of the spending, including salaries, travel, technology and membership dues to organizations like the National Governors Association.
Henry Sobanet, who served as budget director for Owens and Hickenlooper, said it all fell within the parameters of the law. In addition, the timing of the payments to cover the governor’s legal bills came in between appropriations cycles.
“I think when you look at the federal enabling statute, and take into consideration the direction in the executive order, general government expenses are allowed in the provisions in law,” he told The Sun. “The flexibility here is unique, and concerns about the choices don’t equate to cheating or violating the law.”
But state Sen. Paul Lundeen, R-Monument, wants a more thorough review of the spending. In December, he requested an audit of the spending from the federal account, but the evenly split audit committee rejected it on a 4 to 4 vote.
At the meeting, a vocal critic of the audit was Sen. Rhonda Fields, an Aurora Democrat. Fields is a key ally of Hickenlooper who spoke at the launch of his now-abandoned presidential bid. As The Sun reported previously, her daughter, Maisha Pollard-Fields, worked for Hickenlooper’s presidential campaign as a paid staffer and remains a member of the team for his U.S. Senate bid.
Fields said the audit request was “out-of-bounds” and not appropriate. “I don’t think we should be using our audit professionals in that department to do this kind of investigation,” she told The Sun and CBS4 in an interview this week.
Likewise, she defended her vote, saying she didn’t consider it a conflict. “This is not about her, it’s not really about her occupation. It’s about me, and my ability to be able to make very good decisions and judgments for the state of Colorado,” she said.
Fields declined to comment about whether Hickenlooper’s spending was appropriate, and she dismissed other questions. “This topic is just not all that important to me because people are struggling on all sides,” she said.
GOP lawmaker renews call for audit, saying “where there is smoke, there is fire”
The question about Hickenlooper’s spending from the account reemerged this week as Lundeen made another request for an audit at Tuesday’s committee meeting, citing new details and a call from The Post’s editorial board for transparency.
“I am somewhat embarrassed that we, as the representatives of the people at the helm of leadership of the state government, are not necessarily doing our job … to be accountable and transparent in what’s going on in state government,” Lundeen said. “I believe that in fact, that government must police itself first and foremost.”
Fields did not attend the meeting because she was leading a different committee hearing at the same time. But Democrats rejected it by the same split vote.
The new spending details Lundeen referenced involved the more than $13,000 paid to a Denver marketing firm, Merritt and Grace, to develop Listenharderco.com, a website that no longer exists.
In Hickenlooper’s final full day in office in 2019, a Hickenlooper spokeswoman touted it as a “legacy website” that provides you “just the tip of the iceberg, as the governor says, but hopefully it serves as a case study for how to listen and bring people together to make progress, all while restoring our faith that government can be a force for good.”
Lundeen suggested the spending did not meet the fund’s requirements and questioned what else an audit would find. “I think sometimes where there is smoke, there is fire,” he said.
The audit becomes a political point in U.S. Senate primary
In 2018, the Hickenlooper administration planned to close the tax relief account after 15 years, and state lawmakers gave him $562,000 in state tax dollars in the 2019 fiscal year budget to cover payroll and operating expenses that were once paid by federal dollars.
The task remained for Gov. Jared Polis’ administration when it took office in January 2019. A review of state records shows the Polis’ office took steps to move the money spent on the legacy website and other operating expenses to a new account.
But a memo to state budget writers issued Wednesday indicates the federal tax relief account still remains operational and the current balance is $845,619. It continues to cover the cost of Hickenlooper’s legal bills from the ethics complaint.
Polis sidestepped a question Tuesday about whether he supports an audit. “This is a legislative prerogative,” he said at the Big Ideas forum hosted by The Sun, CBS4 and the University of Denver. The governor added: “They of course can audit whatever they want, and we fully respect their right to do that.”
One of Hickenlooper’s Democratic rivals in the U.S. Senate primary is more definitive. Andrew Romanoff, the former state House speaker, said Hickenlooper should call for the audit himself because the questions only benefit Republican incumbent Cory Gardner.
“If I were in John’s shoes, I would welcome an audit — request an audit and put this to rest,” he said in an interview this week. “Transparency is in the taxpayers’ best interest, and we should all be open and accountable for how public dollars should be used.”
Even though it’s appropriate for the state to pay for the defense of a governor acting in their official capacity, Romanoff said other elements are questionable. “You can ask how much we ought to be paying for that legal defense … that’s one question, and the second is whether (the website) is the kind of essential service this fund had in mind,” Romanoff said.
When asked if Hickenlooper supports an audit, his campaign spokeswoman Melissa Miller said the decision is “up to the legislature.”
“Anyone who looks at the federal flex funds will see that 94% were spent by Republican and Democratic governors before John Hickenlooper took office and that, of the small amount spent by Hickenlooper, the majority went to cover payroll-related expenses for state employees,” she said in a statement.
Staff writer Eric Lubbers contributed to this report.
Shaun Boyd is a political specialist at CBS4 in Denver, a reporting partner of The Colorado Sun.
Editorial: Hickenlooper’s budget trick with federal dollars is disappointing
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Colorado state agencies, with a few exceptions, are not allowed to have their own rainy day funds to help them weather financial downturns. It’s the job of state lawmakers to make the tough decisions about where cuts will be made and how state savings funds will be used to spare some departments from those trims.
So we were disappointed to learn that the Colorado governor’s office, under the direction of former Gov. John Hickenlooper and possibly under his predecessors, set itself above lawmakers’ budgeting process.
Denver Post reporter Justin Wingerter uncovered a fund of federal dollars, almost 16 years old, that Hickenlooper used to stave off cuts to his office over the 8 years he made budget recommendations to lawmakers. Records show he also used the money to cover expenses that probably would have raised a few eyebrows at the Joint Budget Committee in lean fiscal years.
We will stop just short of calling this a slush fund because despite a few questionable expenses, it seems that most of the money paid for personnel – salaries and benefits – potentially to avoid layoffs during hard budget years early in the governor’s term. We do not know how past governors Bill Ritter and Bill Owens expended the money or why they left so much for future administrations. It seems strange that despite the dot-com bust, and the Great Recession, these one-time federal dollars were able to last for so many years.
Hickenlooper took office with about $10 million remaining in the fund and immediately spent $6 million of it in 2012 when Colorado’s economy was still trying to recover from the Great Recession.
Over the next several years Hickenlooper’s office slowed the spending out of the fund to a trickle, however.
We don’t think it’s appropriate for a governor to use federal money in this way. It would be wise for lawmakers to audit this fund, not only to look back at how it was used, but to learn how to shut down similar funds that may exist throughout the state government.
Hickenlooper is running to be the Democratic nominee for U.S. Senate this year and face Sen. Cory Gardner, a Republican, in the November general election. We suspect that is why Democratic lawmakers on the Audit Committee refused a request for the fund to be audited. They should reconsider and listen to the wisdom of their Republican colleagues.
The slightly sneaky budgeting practice was made public by Denver Post reporters who first broke the news that the attorney representing Hickenloper in an unrelated ethics complaint was being paid out of this fund of federal dollars. The attorney has been paid $43,390.
The Post then used open records to find some questionable expenses — $20,381 to a state-owned aircraft; $33,900 to consulting firms; $13,385 to a firm for a website touting Hikcenlooper’s legacy; $5,000 to the Civic Center Conservancy for an official function; and $2,500 to a four-star hotel in Cherry Creek for an official function.
To be clear, we don’t think anything illegal occurred. The federal funds were sent to states under the Jobs and Growth Tax Relief Reconciliation Act of 2003, which was intended to backfill states for the income tax revenue they would possibly lose under President George Bush’s federal tax cuts.
Gov. Bill Owens spent down 85% of the fund between 2004 and 2006 with expenditures of about $130 million according to budget documents. Gov. Bill Ritter then spent another $14 million.
Moving forward we hope future governors realize these types of accounting tricks erode taxpayer trust in government and can do more harm than the short-term gain of being able to maintain a fully-funded governor’s office. Hickenlooper should own this mistake publicly and commit to doing better if he’s elected to public office in the future.
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Colorado lawmakers vote down request to investigate if Hickenlooper misused federal fund
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A state committee declined, on a party-line vote Monday, to investigate whether former Gov. John Hickenlooper misused a federal fund to pay for his defense of possible ethics violations.
Republicans Sen. Paul Lundeen of Monument and Rep. Rod Bockenfeld of Watkins brought forward a request for the Legislative Audit Committee to conduct the review.
In a letter to the committee, they asked for the investigation “into the inappropriate, perhaps illegal, use of federal funds for the purpose of paying legal bills for former Governor John Hickenlooper.”
A Denver lawyer has received $43,390 so far to defend Hickenlooper in the Colorado Independent Ethics Commission’s investigation into his acceptance of private flights. Beginning during Hickenlooper’s term and continuing this year, the governor’s office paid lawyer Mark Grueskin from the Jobs and Growth Tax Relief Reconciliation Act of 2003, a federal fund.
Hickenlooper, who is running for the Democratic nomination to challenge U.S. Sen. Cory Gardner, has dismissed the allegations.
“Independent observers have called the complaints against Governor Hickenlooper ‘politically-motivated lies’ — it’s no surprise this latest partisan stunt failed,” Melissa Miller, Hickenlooper campaign spokesperson, said in a statement.
Lundeen told The Denver Post that the 2003 federal fund had specific guidelines for what the money can be used for and he believe it’s clear that Hickenlooper’s defense isn’t one of them.
“The argument cannot be made that paying John Hickenlooper’s legal bills is an essential government service or an unfunded federal mandate,” the legislators’ letter stated.
The letter references reporting by The Denver Post about the federal fund as well as the redaction of Grueskin’s firm’s name on payments in the state’s financial transparency database.
Lundeen agreed with the state auditor’s recommendation to make the investigation part of the state’s ongoing financial audit said the review should be a nonpartisan issue.
“It’s simply a matter of good government to be transparent and to understand how the taxpayer dollars are being used, and the audit would have revealed that,” Lundeen said.
But Sen. Rhonda Fields, D-Aurora, called the request inappropriate, saying it wasn’t the audit committee’s place to investigate because it’s not a legal entity.
“We can’t press charges for fraud,” she said. “We can’t charge anyone with fraud.”
Hickenlooper’s attorney in ethics investigation is paid for by post-9/11 economic recovery fund
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DENVER — A taxpayer-funded attorney is defending former Colorado Governor John Hickenlooper during an ethics investigation into trips he made in 2018.
The state attorney general’s office hired Mark Grueskin, a well-known Democratic elections attorney, to defend Hickenlooper. According to current Governor Jared Polis’ office, Grueskin has billed the state for $43,390 so far, charging $525 per hour.
It’s not unusual for an official to get a taxpayer-funded attorney when facing a legal challenge for something that happened in office. But as first reported by the Denver Post and confirmed by Next with Kyle Clark, the money is coming from a post-9/11 economic recovery fund called the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Colorado received approximately $146.3 million from the relief plan to spend on “essential government services.”
More than $142 million was spent immediately. Through an executive order from then-Governor Bill Ritter, the initial spending went to more than a dozen items like the Colorado Department of Transportation ($60 million), jobs training programs ($2.5 million), improving the state’s DNA testing system ($2.1 million) and dental care for low-income children ($2 million).
The rest was passed along to subsequent administrations. Currently, $953,751 remains, according to a Polis spokesperson, and it’s available “to cover unexpected expenses i.e. legal fees.”
Hickenlooper’s campaign for the Democratic Senate nomination told Next he was unaware of the source of the funding.
Ethics investigators haven’t ruled on whether former Hickenlooper violated Colorado’s gift law by accepting free jet travel from wealthy interests. They released a report on their findings earlier this month.
Hickenlooper has held that there was no wrongdoing, and in a previous interview with Next, he told political reporter Marshall Zelinger that journalists should be defending him.
“You guys should be protecting me on stuff like this,” he said. “Where there is no — what’s the confusion, that I had a private meeting? No, there are no private meetings. That I somehow saved money myself, I wasn’t going to pay for that plane ticket – I saved the state money.”
Next attempted to ask Hickenlooper more questions about the investigation at an event Thursday, and ask in person if he knew about the source of his attorney fees. He left without taking questions.
Colorado’s Independent Ethics Commission will rule on the complaints at a later date.
It’s common for Colorado elected officials to be represented by government lawyers, or by private attorneys enlisted by the government, but in this case, the recipient of the money was hidden and the money came from a federal fund meant to help the state after 9/11.
Mark Grueskin, a high-powered private lawyer in Denver, was appointed “special assistant attorney general” in October 2018, when Hickenlooper first faced an ethics complaint into private flights that critics say violated a government gift ban.
On Oct. 29, 2018, the then-Republican state attorney general’s office sent a letter to Grueskin’s office, appointing him to the new role. That allowed Grueskin to be compensated by the governor’s office for as long as he was representing Hickenlooper, including the time after Hickenlooper left office.
The letter was obtained by The Denver Post from two state agencies via Colorado Open Records Act requests. It states the arrangement will continue until the ethics case is resolved or until it is revoked in writing. The attorney general’s office says there’s no evidence it has been revoked, suggesting Grueskin is still being paid by the state. He did not respond to a request for comment.
In 2018, Grueskin was paid $29,762 by taxpayers for less than three months of work on the case — the ethics complaint was filed Oct. 12 of that year — according to heavily redacted invoices. Because of the redactions, it’s unclear what work was done for that money, at what hourly rate, by whom and exactly when.
Between January and September of this year, when there was little movement in the ethics case, Grueskin was paid $13,628 by the government, according to the governor’s office.
Those payments do not appear to include Grueskin’s work in October and thus far in November, busier months in the ethics investigation. Grueskin did not respond to an email asking how much he has been paid by the state for his work on the case.
“It’s disappointing that a partisan, dark money group initiated this process with what the Denver Post editorial board has called an ‘error-filled’ complaint,” said Melissa Miller, Hickenlooper’s spokeswoman. “They put political attacks ahead of the facts, and it’s at taxpayers’ expense.”
The 2018 and 2019 payments appear in the state government’s transparency database, but Grueskin’s name is entirely redacted, some of only a few expenditures by the governor’s office to not list the recipient of taxpayer money. The Post corroborated those payments were to Grueskin by comparing the dates and dollar amounts on invoices to expenditures in the online database.
The practice of redacting Grueskin’s name from the public database for payments in the ethics case began when Hickenlooper was governor and has continued during the tenure of Gov. Jared Polis, a fellow Democrat. The governor’s office said names are redacted to protect confidentiality, such as attorney-client privilege, in accordance with state law.
According to the transparency database, money paid by the state to Grueskin comes from the Jobs and Growth Tax Relief Reconciliation Act of 2003, a bundle of federal dollars allocated as part of a President George W. Bush-era plan to jump-start the post-9/11 economy.
Then-Gov. Bill Owens signed an executive order in 2003 accepting the federal money and clarifying it should be used “to provide essential government services or to cover the costs of certain federal unfunded mandates.”
Sixteen years later, leftover taxpayer money appears to also be covering Hickenlooper’s legal costs. When asked about this, the governor’s office emailed a copy of the Jobs and Growth Tax Relief Reconciliation Act of 2003 but did not explain why its federal funds are being used in this way. Hickenlooper’s campaign said he did not decide where the money came from or whether to redact payments to Grueskin.
It is common for high-ranking state officials to receive government-paid legal counsel when facing ethics complaints. Former Secretaries of State Wayne Williams and Scott Gessler were both represented by the Colorado Attorney General’s Office as they defended against ethics complaints, in Gessler’s case for several years and at a significant cost to taxpayers.
In March, Colorado Politics reported that Hickenlooper was being represented by the state, but later updated its story after the attorney general’s office told the news outlet it was not paying for Hickenlooper’s outside counsel. A spokesman for the attorney general’s office said this week that his claim then was accurate, since Grueskin is being paid with tax dollars from the governor’s office, not tax dollars from the attorney general’s office.
That spokesman, Lawrence Pacheco, also said it’s common for the attorney general’s office to give private attorneys the title of special assistant attorney general, as it did with Grueskin, when they’re performing work for the government. There were 49 such designations in 2018, and more than 200 in the past decade, he said.
Hickenlooper, a Democrat, is running for U.S. Senate in a crowded primary and is the leading Democratic contender to take on Sen. Cory Gardner, a Yuma Republican, next year. With the ethics case still pending, his opponents on both sides of the aisle have largely refrained from remarking on it publicly in recent weeks.
This story has been changed to clarify that Mark Grueskin is not John Hickenlooper’s personal attorney but rather represents him in his former role as governor.