Oil-and-gas group failed to file finance reports in Loveland fracking election

 
LOVELAND, Colo. — The oversized glossy mailers and robo-calls came in waves over the course of weeks to residents of this small Front Range city, asking them to protect their children, property and low tax rates by voting against a proposed city moratorium on the oil-and-gas extraction method known as hydraulic fracturing, or fracking.

The group behind the campaign calls itself “Protect Colorado,” short for “Protecting Colorado’s Environment, Economy and Energy Independence.” It’s a politics issue committee organized by a public-relations group called Coloradans for Responsible Energy Development, or CRED, which is funded by the two most active Front Range oil-and-gas companies, Anadarko Petroleum and Noble Energy.

Protect Colorado is registered with the state to engage in political messaging but it is not registered with Loveland. It should be, according to city attorney Judy Schmidt.

“If the group accepted donations and made direct appeals to voters to support or oppose the initiative, then they fall under the requirements of the city charter and should have filed reports with the city,” she told the Independent the day after the election.

Protect Colorado filed none of the required issue committee documents with Loveland that would have detailed its contribution totals and spending activity.

Yet Protect Colorado pulled no punches in its Loveland campaign, which was aggressive and direct. “Vote No on Question 1,” read a seal on each of its mailers.

“Question 1 will hurt Loveland’s most precious resource: our children,” one of the group’s mailers warned voters. “Your property. Your right to call the shots. Don’t let government bureaucrats take control,” read another.

Although the oil and gas industry has pushed back hard with expensive campaigns against local moratoriums and bans on fracking on the Front Range, it has had lost five out of five elections over the last few election cycles to city-based grassroots movements. But the companies won at last in Loveland.

Two weeks ago tomorrow, the Loveland fracking moratorium was voted down by 902 votes, or 4 percent of 21,000 votes cast. As analysts noted after the election, it was a close vote and the deck was stacked. The moratorium, or Question 1, appeared on the same ballots voters were casting in party primary elections, in which there were no high-profile statewide Democratic races but in which the race for governor on the Republican side featured an anyone’s-guess four-candidate showdown.

Loveland residents said that the mail and phone calls from Protect Colorado came constantly and with increasing intensity as the campaign heated up. Some said they were getting three calls a night and that they didn’t know who was behind the calls and the mailers.

Loveland resident Blanca Stewart said she has a bag-full of the the mailers that she hoped to return to Protect Colorado. “Big fat flyers,” she said. “More and more came every day.”

Residents in nearby towns reported receiving mailers and phone-calls, too.

“I was so sick of the phone calls. They were coming three times a night,” said Rita, a resident of Firestone, who didn’t want to give her last name. She said she had somehow landed on a call-list, even though she’s not a Loveland-registered voter. “The calls… it was just a computer. No people, ever. It made me want to become a liberal and get on the other side of the issue.”

A bare-knuckle dry run

Protect Colorado’s campaign in Loveland was the bare-knuckles elections version of the softer educational campaign launched last September by CRED. The Loveland contest was seen as a dry-run for the general election in November, when initiatives aimed at winning greater regulatory control for local authorities over drilling are expected to appear on ballots across the state.

Protect Colorado spokeswoman Karen Crummy said it was unclear whether her group had to register with the city in addition to registering with the state.

“Our lawyers reached out to the Loveland City Clerk’s office a couple of weeks ago to make sure Protect Colorado was in compliance, but have not heard back from them. But Protect Colorado has been fully transparent since it registered with the state months ago and has disclosed all its contributors and campaign expenditures,” Crummy wrote in an email on election day.

A day later, Loveland City Attorney Schmidt told The Colorado Independent that she had never heard of Protect Colorado, nor anything about its campaign around Question 1.

Loveland is one of Colorado’s 96 home-rule municipalities. All of those home-rule cities and towns make their own election and campaign finance laws. Loveland’s city charter is clear on the fact that issue groups campaigning in city elections have to register and file reports.

Schmidt pointed to Section 17 of the Loveland charter as plainly relevant:

SECTION 17-4 — REGISTRATION OF COMMITTEES
All candidate committees, political committees and issue committees shall register with the City Clerk before accepting or making any contributions…

SECTION 17-6 — DISCLOSURE; FILING OF REPORTS
(a) All candidate committees, political committees and issue committees shall report to the City Clerk their contributions and contributions in kind received, including the name, address, occupation and employer of each person who has made contributions or contributions in kind in the amount equal to or greater than twenty dollars ($20.00) or more; expenditures made; and obligations entered into by the committee…

Campaign Finance reports were due at the Loveland clerk’s office 14 days before election day and another set is due 30 days after the election, July 25. Only two issue committees ever registered with the city to campaign around Question 1.

The local group that supported the moratorium, “Protect Our Loveland,” has so far reported spending just under $8,000.

The Loveland Energy Action Project, which is backed by the drilling industry and opposed the moratorium, so far has reported its main expense as a $275,000 tab with a consulting firm located on Sherman Street in Denver, the same office from which a company called iKue Strategies apparently orchestrated the failed media campaigns against the previous area anti-fracking moratoriums or bans that passed in Front Range towns Boulder, Broomfield, Fort Collins, Lafayette and Longmont.

But Protect Colorado also spent money fighting Question 1 — and it spent a lot.

According to the reports it filed with the state the first day of July, the group paid out $2,208,596 the last two weeks of June. The lion’s share of that money, $2,177,904, went to Pac/West, a political messaging firm based in Oregon and run by a former state legislator there named Paul Phillips.

Project Protect

Pac/West is probably best known for the campaign it developed in support of President George W. Bush’s 2003 Healthy Forests Restoration Act, a law written in response to an uptick of devastating western wildfires.

The Bush legislation proposed to combat future blazes by allowing loggers to thin forests. Opponents saw the law as at best misguided and as at worst a giveaway to the logging industry. They argued climate change and unmanaged forest brush and debris were the main factors fueling the fires. Cutting down full-grown trees wasn’t the answer.

In response to criticism of the legislation, Pac/West formed a group called “Project Protect” to work in support of the bill and that media outlets later reported was backed by lumber interests. The group’s campaign featured mailers and phone calls that said environmentalists and their lawyers were putting the lives of firefighters at risk.

“Lawsuits or Lives, which will it be?” read one of the flyers. “It’s time to protect our water, air and critical wildlife habitat, and the lives of our nation’s firefighters.”

Small potatoes

Luis Toro, director at nonprofit Colorado Ethics Watch, said it seems clear that Protect Colorado violated Loveland campaign finance laws.

“As a matter of disclosure, residents looking into a local initiative would look to the city clerk’s website, not the secretary of state’s website — and it’s clear in Colorado law that the secretary of state has no authority regarding home-rule elections.”

Toro says it is up to Loveland to prosecute violations of its election laws. He says it would be a misdemeanor crime that would carry a fine of up to $1,000.

“Probably small potatoes for this group,” he said.