COLORADO COURT OF APPEALS 2017COA126
Court of Appeals No. 16CA1648
Office of Administrative Courts Case No. OS 2016-0009
Campaign Integrity Watchdog,
Petitioner-Appellee,
v.
Colorado Republican Committee,
Respondent-Appellant.
ORDER REVERSED
Division I
Opinion by JUDGE TAUBMAN
Lichtenstein and Carparelli*, JJ., concur
Announced October 5, 2017
Matthew Arnold, Authorized Representative of Campaign Integrity Watchdog
Brownstein Hyatt Farber Schreck, LLP, Christopher O. Murray, Denver,
Colorado, for Respondent-Appellant
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2017.
¶1 In this campaign finance case, the Colorado Republican
Committee (CRC) appeals part of a final agency decision which
determined that it improperly failed to report three payments for
vendor tables at its 2016 Republican Party assembly and
convention.1 Because we conclude that these payments were not
political contributions, we reverse that part of the order imposing a
fine and sanctions against CRC for failing to report the payments.
We do not review, and thus issue no opinion on, that part of the
agency decision CRC does not appeal.
I. Background
¶2 In April 2016, CRC held its convention to nominate candidates
for state and federal offices and to elect at-large delegates and
alternates to the 2016 Republican National Convention. In
connection with the convention, CRC sold vendor tables for a
minimum of $350 each.2 Although the record is not clear, these
vendor tables apparently were used by individuals and
1 For ease of reference, we will refer to this simply as “the
convention.”
2 Evidence was presented at the hearing indicating that the tables
could cost more than $350, depending on the size of the table and if
the payor was an affiliated organization like a county division of the
Republican Party, or if the payor was an outside group.
1
organizations to promote campaigns, advertise, and share
information. Those who purchased tables could decorate the tables
and provide literature to convention delegates and visitors. The
record also indicates that CRC sold some tables to commercial
vendors.
¶3 Three payments to CRC for these tables are at issue. The first
table was purchased by Jess Loban, a Republican candidate for the
state senate. CRC deposited his payment of $350 into its federal
operations account and reported it in its disclosures to the Federal
Election Commission (FEC). The second and third tables were
purchased by the Party of Choice, LLC. The record does not provide
any more information about the LLC. CRC deposited the Party of
Choice’s two payments totaling $700 into its state operations
account and disclosed them on its state report of contributions and
expenditures.
¶4 In May 2016, Campaign Integrity Watchdog (CIW), through
Matt Arnold, its authorized representative3, filed a complaint with
3 Although Matt Arnold is not an attorney, he may represent CIW in
this case because he has established that he has met the
requirements of section 13-1-127(2), C.R.S. 2017. See Campaign
2
the secretary of state. As relevant to this appeal, CIW argued that
CRC failed to report in its state report of contributions and
expenditures the payment from Loban as a contribution. It also
argued that, with respect to the payments from the Party of Choice,
CRC failed to follow all of the reporting requirements for a
contribution from an LLC, including failure to file what is known as
an LLC “affirmation” pursuant to section 1-45-103.7, C.R.S. 2017.4
¶5 An administrative law judge (ALJ) held a hearing on these and
other issues in August 2016. During the hearing, CRC argued that
the three payments were not reportable contributions under the
Fair Campaign Practices Act (FCPA), sections 1-45-101 to -118,
C.R.S. 2017. In his final order, the ALJ ruled that (1) the three
payments by Loban and the Party of Choice were all reportable
contributions under state law; (2) CRC did not properly disclose
these contributions; (3) CRC must pay a $4600 fine for failure to
Integrity Watchdog v. Coloradans for a Better Future, 2016 COA 51,
¶ 2 n.1, ___ P.3d ___, ___ n.1 (cert. granted Sept. 12, 2016).
4 When a political party receives a reportable state contribution
from an LLC, the LLC must prepare an affirmation containing the
names of the LLC members and apportionment of the contribution,
and the party must file the affirmation when it reports the
contribution. See § 1-45-103.7(5)(d), C.R.S. 2017.
3
disclose these contributions; and (4) CRC must file amended reports
of contributions and expenditures and return those contributions.
Consequently, he assessed a fine and a sanction in the alternative
against CRC and ordered that CRC amend its reports of
contributions and return the contributions.
II. Interpretation of Section 1-45-103(6)(b) of the FCPA
¶6 CRC contends that the ALJ erred in determining that the three
payments for vendor tables at the convention were reportable
contributions under state law and not properly reported by CRC.
We agree.
¶7 At the hearing, Shana Kohn Banberger, the Executive Director
of CRC, testified that vendors purchase tables at the convention to
present a display to roughly 4000 delegates and around 2000 to
3000 alternates — an attendance of roughly 6000 to 7000 people.
Banberger also stated that vendor tables typically sell out.
¶8 Banberger further attested that CRC did not report these
payments for the vendor tables as contributions because the
payments were “a fee for a service. . . . It was a fee for the vendor
tables, as they stated on their check.”
4
A. Standard of Review
¶9 As a matter of statutory interpretation, we review de novo
whether payments to a political party are contributions under the
Colorado Constitution and state law. Campaign Integrity Watchdog
v. Coloradans for a Better Future, 2016 COA 51, ¶ 16, ___ P.3d ___,
___ (cert. granted Sept. 12, 2016). We also review de novo an
administrative agency’s conclusions of law. Id.
B. Applicable Law
¶ 10 As pertinent here, section 1-45-108(1)(a)(I), C.R.S. 2017,
requires political committees to report contributions of twenty
dollars or more that they receive. It also requires them to report
expenditures and obligations.
¶ 11 Under the definitions section of the FCPA, “contribution” has
“the same meaning as set forth in section 2(5) of article XXVIII of
the state constitution.” § 1-45-103(6)(a), C.R.S. 2017. The
Colorado Constitution defines “contribution” broadly as “[t]he
payment, loan, pledge, gift, or advance of money, or guarantee of a
loan, made to any candidate committee, issue committee, political
committee, small donor committee, or political party.” Colo. Const.
5
art. XXVIII, § 2(5)(a)(I). However, section 1-45-103(6)(b) adds the
following:
“Contribution” includes, with regard to a
contribution for which the contributor receives
compensation or consideration of less than
equivalent value to such contribution,
including, but not limited to, items of
perishable or nonpermanent value, goods,
supplies, services, or participation in a
campaign-related event, an amount equal to
the value in excess of such compensation or
consideration as determined by the candidate
committee.
§ 1-45-103(6)(b).
¶ 12 When interpreting a statute or a constitutional amendment,
we must first determine whether it has a plain and unambiguous
meaning. Campaign Integrity Watchdog, ¶ 17, ___ P.3d at ___. “The
plainness or ambiguity of statutory language is determined by
reference to the language itself, the specific context in which that
language is used, and the broader context of the statute as a
whole.” Id. at ¶ 18, ___ P.3d at ___ (quoting Robinson v. Shell Oil
Co., 519 U.S. 337, 340 (1997)). We read the statutory scheme as a
whole to give “consistent, harmonious, and sensible effect to all
parts of the statute.” Id. (quoting Salazar v. Indus. Claim Appeals
Office, 10 P.3d 666, 667 (Colo. App. 2000)); see also People v. Dist.
6
Court, 713 P.2d 918, 921 (Colo. 1986). We will not adopt a
statutory interpretation that leads to an illogical or absurd result or
is at odds with the legislative scheme. People v. Cross, 127 P.3d 71,
73 (Colo. 2006). We also reject interpretations that render words or
phrases superfluous. Id.
¶ 13 Likewise, when interpreting a constitutional amendment, we
must give effect to the electorate’s intent in enacting the
amendment. Campaign Integrity Watchdog, ¶ 19, ___ P.3d at ___.
We must give words their ordinary and popular meanings to
ascertain what the voters believed the amendment to mean when
they adopted it. Id. We also must interpret constitutional
amendments and statutory provisions together. See id. at ¶ 38, ___
P.3d at ___.5
C. Analysis
1. Interpretation of Section 1-45-103(6)(b)
¶ 14 The ALJ correctly noted that section 1-45-103(6)(b) “speaks
only of contributions valued by the ‘candidate committees,’” and
5CIW is not alleging that the FCPA is unconstitutional for
improperly narrowing section 2(5) of article XXVIII of the Colorado
Constitution.
7
posed the question of whether section 1-45-103(6)(b) applies to
political committees such as CRC. We conclude that section 1-45-
103(6)(b) applies to all contributions “for which the contributor
receives compensation or consideration.”
¶ 15 Section 1-45-103(6)(a) states that “‘contribution’ shall have the
same meaning as set forth in section 2(5) of article XXVIII of the
state constitution.” The statute begins by incorporating the
constitutional definitions of “contribution,” which applies, as
relevant here, to payments made to “candidate committee[s], issue
committee[s], political committee[s], small donor committee[s], or
political part[ies].” Colo. Const. art. XXVIII, § 2(5)(a)(I).
¶ 16 According to section (2)(13) Article XXVIII of the Colorado
Constitution, a “‘[p]olitical party’ includes affiliated party
organizations at the state, county, and election district levels, and
all such affiliates are considered to be a single entity for the
purposes of this article.” The CRC, as a state-level affiliated party
organization of the Republican Party, qualifies as a “political party”
to which this section of the Colorado Constitution and the related
statutes apply.
8
¶ 17 Section 1-45-103(6)(b) pertains to the amount of a
contribution when “the contributor receives compensation or
consideration.” It provides that the amount of the contribution is
the value of the contributor’s payment in excess of the
compensation or consideration the contributor receives. For
example, it states that the compensation or consideration might be
“items of perishable or nonpermanent value, goods, supplies,
services, or participation in a campaign-related event.” Id. In this
regard, the statute permits a candidate committee — but not other
entities — to determine the value of such compensation or
consideration.
¶ 18 We conclude that interpreting section 1-45-103(6)(b) as
applying only to payments made to candidate committees that have
determined the value of the goods and services provided while
excluding, as relevant here, payments made to political parties
would lead to an absurd result. See Dist. Court, 713 P.2d at 921. It
is illogical that the General Assembly intended “contribution” to
9
enable only candidate committees to determine the value of goods
and services provided.6
¶ 19 Accordingly, we conclude that section 1-45-103(6)(b) applies to
the payments to CRC at issue here.
¶ 20 While the Colorado Constitution broadly defines a
“contribution,” the plain language of the statute addresses the
determination of the contribution amount when the contributor
receives something of value in the transaction. When a contributor
pays CRC for a good or service, and the amount paid is greater than
6 We have reviewed the legislative history of the FCPA and have
found no explanation as to why section 1-45-103(6)(b), C.R.S. 2017,
refers only to candidate committees. Specifically, we reviewed the
legislative history of H.B. 1194, 62d Gen. Assemb., 2d Reg. Sess.
(Mar. 15, 2000) (adding the definition of “contribution” now codified
at section 1-45-103(6)(b)); H.B. 1132, 64th Gen. Assemb., 1st Reg.
Sess. (June 3, 2003) (recreating and re-enacting the FCPA in
response to the 2002 enactment of Article XXVIII by voter initiative);
and H.B. 1074, 66th Gen. Assemb., 1st Reg. Sess. (July 1, 2007)
(adding the definition of “contribution” codified at section 1-45-
103(6)(c)). Nothing in the legislative history we reviewed suggests
that section 1-45-103(6)(b) applies only to candidate committees
and, as explained above, we conclude that to read it that way would
lead to an absurd result. See Burnett v. State Dep’t of Nat. Res.,
2015 CO 19, ¶ 39, 346 P.3d 1005, 1012 (looking to legislative
history before concluding that an interpretation of a statute
proposed by a party would produce absurd results).
10
its value, only the amount paid in excess of the value is considered
a “contribution.”
¶ 21 The ALJ rejected CRC’s interpretation and instead relied on
the broader definition of “contribution” found in article XXVIII and
adopted by section 1-45-103(6)(a). However, to ignore the plain
language of section 1-45-103(6)(b) would render it superfluous. See
Cross, 127 P.3d at 73; see also Dist. Court, 713 P.2d at 921 (“If
separate clauses within a statute may be reconciled by one
construction but would conflict under a different interpretation, the
construction which results in harmony rather than inconsistency
should be adopted.”); Campaign Integrity Watchdog, ¶ 18, ___ P.3d
at ___.
¶ 22 Section 1-45-103(6)(a) supports our conclusion because it
states that the FCPA defines “contribution” the same as article
XXVIII, in addition to identifying an exception for payments that
exceed the value of those goods and services. See § 1-45-103(6)(a),
(b). Further, basic rules of statutory construction dictate that a
more specific provision prevails over a general provision. § 2-4-205,
C.R.S. 2017; see also Campaign Integrity Watchdog, ¶ 38, ___ P.3d
at ___.
11
¶ 23 CIW asserts that the federal and state definitions of
“contribution” are indistinguishable. We disagree. The federal
definition broadly considers all “payments” as contributions, while
the state definition indicates that parts of some payments are not
included in the definition of “contribution” found in the Colorado
Constitution.
¶ 24 Thus, we conclude that the difference between the federal and
state definitions of “contribution” indicates that only the state
definition excludes the amounts paid equal to the value of goods
and services. In contrast, the Federal Election Campaign Act
provides only two broad definitions of “contribution”:
(i) any gift, subscription, loan, advance, or
deposit of money or anything of value made by
any person for the purpose of influencing any
election for Federal office; or
(ii) the payment by any person of
compensation for the personal services of
another person which are rendered to a
political committee without charge for any
purpose.
52 U.S.C. § 30101(8)(A) (2012). The federal definition does not
mention anything related to contributions for which the contributor
receives compensation or consideration. However, section 1-45-
12
103(6)(b) explains that the amount of a contribution is the
difference between the payment made by the contributor and the
value the contributor received. Unlike the federal law, the state
statute thus addresses situations in which a contributor receives
something of value as compensation or consideration.
¶ 25 Federal case law may be instructive in interpreting state law
when the state law is modeled after a federal law. See Flood v.
Mercantile Adjustment Bureau, LLC, 176 P.3d 769, 772 (Colo. 2008).
However, the corollary is that where state and federal laws differ, we
are not required to follow federal law in construing the state
statutory scheme. See Nicholas v. N. Colo. Med. Ctr., Inc., 902 P.2d
462 (Colo. App. 1995).
¶ 26 Thus, contrary to CIW’s assertion that the definitions in the
state and federal laws are indistinguishable, we conclude that the
General Assembly intended to differentiate between those payments
for services that equal the value of those goods or services, which
are not “contributions,” and those made in excess, which are.7
7 Based on the different federal and state definitions of
“contribution,” CRC reported the payments for the Loban vendor
table at issue to the FEC, but not to the state.
13
¶ 27 Finally, the Colorado Secretary of State’s Campaign and
Political Finance Manual reinforces our conclusion regarding the
interpretation of section 1-45-103(6)(b). The manual states that
[a]ny amount paid for a ticket to a fundraising
event in excess of the value of a meal or other
amenities provided (which is typically stated)
constitutes a contribution to the organization
benefitting from the event. For example, if a
ticket to an event is $100 and the meal costs
$25, the ticket purchaser makes a
contribution of $75 to the entity hosting the
event.
Colorado Secretary of State, Colorado Campaign and Political
Finance Manual 33 (October 2016), https://perma.cc/9CYW-
C9HU. The manual, while not binding authority, demonstrates that
any payment made in excess of the value of a good or service is
considered a “contribution.” See Bd. of Cty. Comm’rs v. Colo. Pub.
Utils. Comm’n, 157 P.3d 1083, 1088 (Colo. 2007) (“We may consider
and defer to an agency’s interpretation of its own enabling statute
and regulations the agency has promulgated.”).
¶ 28 Accordingly, we conclude that, under the plain language of
section 1-45-103(6)(b), political parties are required to report only
that portion of payments for services that exceeds the value of the
services rendered.
14
2. Application of Section 1-45-103(6)(b)
¶ 29 Based on the plain meaning of section 1-45-103(6)(b), and
applying it to political parties, including CRC, we conclude that the
ALJ erred in limiting his analysis to the definition of “contribution”
found in article XXVIII and determining that the payments by
Loban and the Party of Choice for vendor tables were reportable
contributions.
¶ 30 Here, CRC asserted that the value of the vendor tables, $350,
was reasonable because the value the contributor received was
participation in the convention that afforded an opportunity to
display information to 6000 to 7000 convention attendees and
because tables often sold out. The ALJ disregarded this argument
and concluded that regardless of any potential difference between
the amount paid and the actual value, any payments of this nature
must be reportable contributions to prevent organizations from
“shield[ing] all such exchanges from view.” However, the ALJ’s
interpretation “relied on one part of the constitutional definition of
contribution while ignoring the [statutory] definition.” Campaign
Integrity Watchdog, ¶ 38, ___ P.3d at ___. This was error.
15
¶ 31 The amount of a “contribution” includes only payments made
in excess of the value received by the contributor. CIW, as the
complainant seeking an order of violation, had the burden to show
that the three payments at issue were reportable contributions
under the statute. It thus had to provide evidence — pursuant to
section 1-45-103(6)(b) — that the value of the vendor tables was
actually less than the $350 CRC charged. See Colo. Const. art.
XXVIII, § 2(5)(a)(III); § 24-4-105(7), C.R.S. 2017 (“[T]he proponent of
an order shall have the burden of proof.”). Because CIW presented
no evidence contrary to CRC’s assertion, no basis exists to conclude
that the payments by Loban and the Party of Choice are reportable
contributions under section 1-45-103.
¶ 32 CIW nevertheless contends that the payments were otherwise
reportable. We address and reject its contentions.
¶ 33 Relying on the Internal Revenue Code and Colorado law, CIW
first contends that CRC, as a tax-exempt entity, cannot engage in
the commercial sale of goods or services because financial
transactions with political entities “are defined strictly in terms of
‘contributions’ and ‘expenditures.’” See 26 U.S.C. § 527 (2012).
However, this section actually states that political parties are
16
“organized and operated primarily for the purpose of directly or
indirectly accepting contributions or making expenditures, or
both . . . .” 26 U.S.C. § 527(e)(1) (emphasis added). It does not say
that political parties are organized exclusively to accept
contributions and to make expenditures.
¶ 34 CIW next contends that these payments could not have been
payment for “services” as CRC contends, because Loban and the
Party of Choice were not paying for the tables, but rather for access
to the convention, an entirely political function, and not a “service”
activity. However, the exchange between the payors and CRC was
still a “service.” Paying for a vendor table was an opportunity to
display information in front of approximately 6000 to 7000 people.
By paying CRC, Loban and the Party of Choice benefited; there was
an exchange of value between the payors and CRC. See Black’s
Law Dictionary 1576 (10th ed. 2014) (“Service” is “[l]abor performed
in the interest or under the direction of others; specif., the
performance of some useful act or series of acts for the benefit of
another, usu. for a fee.”).
¶ 35 As stated above, the relevant inquiry was then whether the
value of the service (the opportunity to display information at a
17
vendor table at the convention) was less than the $350 payment for
it, because only those services that are worth less than the amount
paid are reportable contributions. Because CIW presented no
evidence on this issue, it cannot prevail. See Colo. Const. art.
XXVIII, § 2(5)(a)(III); § 24-4-105(7).
¶ 36 CIW argues in response that the value of such vendor tables
was incalculable; however, the practice of selling vendor tables at
state assemblies and conventions is not limited to the CRC. CIW
could have presented evidence of the typical rates charged for such
display tables at other political conventions or other events to
determine if such a price was its actual value. However, CIW did
not do so.
¶ 37 CIW next contends that the “central holding” of another
division of this court in Campaign Integrity Watchdog, ¶ 38, ___ P.3d
at ___, is that any payment received by a political party is a
contribution, irrespective of the purpose behind the payment.
However, the holding in that case was narrower than CIW argues.
Instead, the division held that a political organization is required to
report as a contribution the value of legal services it received, even
if such services were gifts, services (where less than equivalent
18
value was received), or pro bono services. Campaign Integrity
Watchdog, ¶¶ 40-41, ___ P.3d at ___. This was so even if the legal
services were not given to promote a candidate’s nomination or
election. Id. That decision is not analogous to the issues here,
because there, the political organization paid contributors for their
services whereas, here, the contributor paid a political organization
(CRC) for the service it provided.
¶ 38 Moreover, Campaign Integrity Watchdog did not hold that
payments that lack an element of gratuity are contributions.
Whether a contribution needs an element of gratuity was not before
the division, because the division concluded that the “payments” at
issue were gratuitous in nature. Thus, the analysis of Campaign
Integrity Watchdog is consistent with our interpretation in this case.
For example, if a political organization received pro bono legal
services valued at $2000, it would have to report that contribution
as the value received.
¶ 39 Last, CIW contends that CRC was required to report these
payments as “other income.” See Dep’t of State Reg. 10.14, 8 Code
Colo. Regs. 1505–6. However, the issue of whether the payments
are “other income” in the regulations was not alleged by CIW, was
19
not addressed by the parties or the ALJ at the hearing or in the
ALJ’s final decision, and did not form the basis for this appeal.
¶ 40 Unless a hearing officer has no authority to address it, an
issue not raised before a hearing officer is waived. Chostner v. Colo.
Water Quality Control Comm’n, 2013 COA 111, ¶ 39, 327 P.3d 290,
298. Because the ALJ had the authority to address this contention,
no exceptions apply here. Thus, CIW has waived this argument;
therefore, we will not consider it.
¶ 41 Because CIW’s arguments are unavailing, we conclude that
the ALJ erred in finding that the payments at issue are reportable
contributions under state law.
III. ALJ’s Order
¶ 42 CRC contends that the ALJ erred in imposing a $4600 fine for
its failure to report Loban’s payment and in ordering it to amend its
report of contributions and expenditures to include an LLC
affirmation for the payments by the Party of Choice, or otherwise to
return the payment from the Party of Choice. We agree. Because
this part of the ALJ’s order was premised on the Party of Choice’s
payments being contributions — a premise we have rejected — that
part of the ALJ’s order must be reversed.
20
¶ 43 CRC also contends that because private enforcement of
Colorado’s campaign finance laws is unconstitutional, CIW cannot
file a private lawsuit against CRC and thus the ALJ had no power to
impose fines and sanctions upon CRC.
¶ 44 Because we have concluded that the ALJ erred in determining
that the payments by Loban and the Party of Choice were
contributions under Colorado law and reverse the order, we need
not address whether private enforcement of Colorado’s campaign
finance laws is unconstitutional.
IV. Request for Costs
¶ 45 CIW requested recovery of its costs incurred “due to
Respondent-Appellant CRC’s substantially frivolous and groundless
appeal.” However, because we conclude that CRC prevails on its
claims, CIW is not entitled to an award of costs. See Valentine v.
Mountain States Mut. Cas. Co., 252 P.3d 1182, 1188 (Colo. App.
2011).
V. Conclusion
¶ 46 Accordingly, the part of the order imposing a fine and
sanctions against CRC for failing to disclose the relevant payments
is reversed.
21
JUDGE LICHTENSTEIN and JUDGE CARPARELLI concur.
22