Special interest groups will continue to be able to use 501c(4) organizations to donate money to political campaigns anonymously in Colorado for another year, if not longer, after the final gavel fell on this year’s legislative session without a bill being introduced.
Developed under the direction of Sen. Gail Schwartz, D-Snowmass Villiage, Sen. Morgan Carroll, D-Aurora, and Rep. Lois Court, D-Lakewood, the legislation would have forced 501c(4) groups to disclose donors of funds transferred for political purposes. Exactly how they were going to go about that never solidified into one cohesive plan, causing multiple rewrites and the eventual death of the bill.
“One of my greatest frustrations this session was not to be more successful in campaign finance reform legislation,” Schwartz, who had taken over the reins of the legislation from Morgan Carroll during the session, told the Colorado Independent. “So many people were working behind the scenes but still couldn’t arrive at one single direction.”
Carroll told the Colorado Independent in November that she was working on a bill to ensure that the names of those donating to 527s were known, whether an intermediary 501(c)4 “social welfare” group was used or not.
Donors can currently give to a 501(C)4 that in turn can give to a 527 political action committee. In these cases only the name of the 501(c)4 is registered as having contributed to the PAC.
“What has happened is they have basically been able to cloak the identity of who is really driving [a 527],” Carroll said in a previous interview. She said the process essentially amounted to “laundering.”
Would-be House sponsor of the bill Court told the Colorado Independent that creating the legislation proved difficult because contributions in many cases are considered free-speech under the constitution. As a result, she said they were working to find a way to balance First Amendment rights of donors with the right of the people to know who is funding campaigns.
Court said it was imperative to know who supports political campaigns.
Beyond the constitutional issues, however, Court said simple logistics also got in the way. She said one problem was whose name to disclose and who to charge with violations. She said the legislation became bogged down in whether individual owners of companies or company names themselves should be listed in disclosure reports.
Still, the issue was one that Schwartz said they were not giving up on. She said that while redistricting hampered her ability to finalize both the disclosure legislation and other campaign finance reform, with Colorado being one of the top states for out-of-state contributions in the country, both she and Court planned to work over the interim break with state and national groups to come up with a piece of legislation to address the problem.
Court agreed and said they would sit down with experts this summer in an attempt to get the legislation solid enough to present to a committee, a point it never reached this year.
“We knew what to do. Just not exactly how to do it,” Court said. “We just couldn’t get it prepared for thorough debate.”
Still, while both legislators remain dedicated to the cause, Schwartz said that she had been unable to sit down with Secretary of State Scott Gessler on either the specific issue of 401(c)4 / 527 disclosure laws or a spectrum of campaign finance issues she was concerned about this session.
Gessler has previously been cold to the idea of impeding on what he sees as free-speech rights in campaign donations.
Schwartz said that with the change of the legislature to split party rule things may have become more difficult for the disclosure legislation.
“We might have to wait till the numbers change,” Schwartz said. But she said it was of primary importance that a solution be found on behalf of Colorado voters.
