Power lawyer slaps money-in-politics complaint on group backing independents in Colorado

UPDATE: On Oct. 1, the Secretary of State’s office determined the complaint identified potential violations of Colorado’s campaign finance law and alleged “sufficient supporting facts” about the allegations. That means the office won’t dismiss the complaint outright and will continue to review it. The office will then decide whether to turn it over to an administrative law judge within the next 30 days. 

A high-powered Denver attorney who specializes in election law and often represents Democrats has drawn a bead on Unite America, a group seeking to get five independent candidates elected to the legislature in November.

In September, Mark Grueskin filed a 15-page campaign finance complaint with the Colorado Secretary of State accusing Unite America, formerly called The Centrist Project, of improper behavior — allegations a spokesman for the group dismissed as “sloppy” and “misinformed.”

Those involved with Unite America expected to catch heat from Democrats and Republicans when the group moved into Colorado last summer, then under the banner of The Centrist Project. Its aim is to groom candidates who don’t represent either of the two major political parties to run for legislative seats at the state Capitol. The group found fertile ground in Colorado where the balance of power hangs by just one seat in the state Senate.

Can a ‘Centrist Project’ break the power of political parties in Colorado? They’re trying

The plan was to recruit, endorse, help fund, and offer campaign support to unaffiliated candidates, and then run them as a slate. Currently, it’s doing that, backing candidates in a Senate race and four House races. Airline consultant Steve Peterson is running in a south-of-Denver Senate district currently held by Republican Chris Holbert, one of the more conservative members in the chamber. Maile Foster, former president of the Colorado Springs Rotary, is running for an open House seat in her city. Army vet and CU Boulder instructor Jay Geyer is running for incumbent Democrat Matt Gray’s Broomfield House seat. Business incubator leader Thea Chase is running against a Republican for a House seat on the Western Slope, and Paul Jones of Gunnison is taking on incumbent Democrat Barbara McLachlan. 

While centrist efforts have popped up nationally before — think Unity08 or No Labels — this is the first time a national group is making a concerted effort to draft unaffiliated candidates into the Colorado legislature.

Last fall, the group did a trial run by backing a handful of candidates in municipal elections. Its tactics raised eyebrows in Manitou Springs, a small mountain town in the Pikes Peak region, when the group plowed at least $8,000 into the race to back the incumbent mayor with glossy fliers not usually seen in the quiet community. That candidate ended up losing, along with another supported by the group, but the project did back one winner.

Earlier this year, The Centrist Project changed its name to Unite America and calls its legislative candidate slate Unite Colorado. The group said it hoped to raise and spend at least $1 million to get the unaffiliated candidates elected. Its argument is that having lawmakers not beholden to political parties could be a cure for gridlock. 

Now playing in the larger statehouse leagues, how Unite America and groups linked to it operate is coming under scrutiny.

Grueskin’s complaint alleges that a group called Unite America Election Fund is operating as a federal super PAC, which can raise unlimited amounts of money, but has not registered as a political committee in Colorado as he believes it should. Its affiliated groups, Unite America and Unite Colorado, have not either, he says. He wants the groups slapped with fines and required to disclose contributions and expenditures.

“These entities have been spending money to advocate candidates and expressly advocate the election of those candidates without disclosing to the Secretary of State and the voters of Colorado where the money is coming from,” Grueskin said about the complaint he filed on behalf of four Democratic Colorado voters.

Unite America says Grueskin has it all wrong, arguing that it has filed everything properly in Colorado and brushing off the complaint as a partisan attempt to undercut political competition by independents. “We anticipated that the parties and their allies would do whatever they could to stifle competition,” says Unite America director Nick Troiano.

The group points to a website that lays out how Unite America operates and includes links to federal disclosure reports showing some of the group’s donors. Those reports show top givers are Riot Games CEO Marc Merill, who gave $285,000 to Unite America Election Fund, East West Communities president Gary Fenchuck, who gave $75,000, Tenneco Inc chairman Gregg Sherrill, who gave about $35,000, and Scott Mills Sipprelle, founder of Westland Adventures, who gave $25,000.

Last month, the group pushed back on being characterized as a “dark money” group after The Associated Press published a story about its efforts to get independents elected in state legislatures and how its funding was coming into question.

From the AP:

Unite America discloses its donors to its political action committees, which can make independent expenditures on behalf of candidates. Video game company Riot Games co-founder Marc Merrill has contributed $285,000 since last December to Unite America’s political action committee, according to recent federal campaign finance reports. But Unite America does not publicly disclose all of its spending for or its donations to its two nonprofit arms: Unite America Inc. and Unite America Institute. Those nonprofits fund efforts such as polling and voter outreach.

Nonprofits are not required to disclose their donors. Troiano told the AP, however, that one of its nonprofits voluntarily discloses its major donors, going “beyond the requirements of the law and the common practices of partisan political groups in order to operate transparently.”

And he says his group is being transparent here, too.

Grueskin’s lawsuit seeks to test that in Colorado where the state recently revamped how it handles campaign finance complaints. A federal lawsuit recently declared unconstitutional the way the state previously outsourced enforcement to the private sector.

Related: A federal judge just knocked down major parts of Colorado’s privatized system of enforcing money-in-politics laws

Previously, someone who filed a complaint like the one against Unite America would have to prosecute it in front of an administrative law judge, which supporters said saved money but critics decried as a cop-out by the government when it came to enforcing campaign finance laws.

Under new rules adopted following the judge’s ruling, the Secretary of State now screens complaints to determine if they’re frivolous or not. If the office finds substance to a complaint it refers it to the state attorney general’s office to bring before an administrative law judge. Secretary of State spokeswoman Lynn Bartels says the office has until Oct. 1 to make a decision about what it will do.

The two major parties in Colorado view the emergence of a group trying to disrupt their holds on power differently.

Colorado Democratic Party spokesman Eric Walker says voters should be “skeptical” of a group he says is mostly running “spoiler candidates” in Democratic-held seats, and points to Troiano’s GOP roots. “If it walks like a duck and talks like a duck, it’s probably a duck,” he says.

Colorado Republican Party spokesman Daniel Cole says the GOP views all competition as healthy competition. While some might think support for independent candidates in this year’s races could pull votes away from Republicans or Democrats, he says, “Republicans believe in the free market in all its forms, and competition is an essential part of that.”

Grueskin says he wants to know all the ins and outs of who is funding this new experiment in Colorado and how the money is being spent. Troiano says his group is being transparent, he’s confident the complaint won’t go anywhere and views it as a tactic to divert resources away from an effort to give voters another option in a two-party system.

Asked if Grueskin, known as a lawyer who works for Democrats, is worried Unite America will pull votes away from Democrats running for the legislature this year and wants to shut it down, he said no. “I could dress up ‘no,’ if you want me to, but the answer is no,” he said.