Face the State

Actions Raise Questions About Role of Colorado Small Donor Committees
Face the State Staff Report

During the last election, the nation's largest unions utilized a loophole in Colorado's campaign finance laws that allowed them to give millions of dollars in anonymous political contributions to Democrat candidates—all while never revealing the name of a single individual donor.

For the Service Employees International Union, the nation's largest union with more than 1.6 million members, this setup allowed its leadership to transfer portions of membership dues to small donor committees without member knowledge or consent, and without donor names ever being publicly disclosed. According to the SEIU, it's Colorado membership stands at about 5,000 workers but with the aid of national member dues, it was able to pump nearly $1 million into the campaign coffers of union-supporting candidates. That comes out to almost $200 per Colorado member.

While Colorado law requires individual contributors giving more than $99 to have their identities and employers revealed on a public database, contributors to so-called small donor committees can remain anonymous—and in some cases, unaware they are even donating to a specific political cause. Small donor committees were first utilized in 2004 after being passed into law by voters as part of a larger campaign finance regulation initiative in 2002.

Specifically, the committees do not have to identify contributors making contributions of $20 or less in a single reporting period. In 2006 there were fourteen reporting periods, meaning that a single donor could give almost $280 in contributions anonymously. In 2007, there are 4 reporting periods, meaning a single contributor can anonymously contribute $80. This makes it impossible to guarantee that a donor to a small donor committee doesn't violate the annual $50 cap on contributions.

Small donor committees can use these anonymous contributions to give 10 times more than individuals. While individuals can give up to $1,050 to gubernatorial candidates, small donor committees can give up to $10,500. Similarly, in state legislative races, individuals are limited to giving a candidate $400, but small donor committees can give up to $4,000.

Following the 2006 election, former state Rep. Rob Fairbank, a Republican, tallied small donor committee total contributions, and concluded that the ten largest committees, all union funded, gave $2.5 million in anonymous contributions to state and local candidates. According to Fairbank, the Colorado Education Association's Public Education Committee gave the most, contributing $811,000 to liberal candidates. The SEIU, the largest out-of-state union contributor, came in a close second with $787,000; its state affiliate pumped another $142,000 into state and local races.

Critics Denounce Involuntary Political Contributions

Colorado GOP Chairman Dick Wadhams expressed outrage that union bosses aren't required to notify workers or seek their consent if membership dues are used to make political contributions. "It's not fair to the worker and it's an abuse of our laws," he said, adding that he believes the process will continue until Colorado changes its statutes to require member notification and consent before allowing such contributions. "The union bosses will continue to abuse union members as much as they can to solidify political power."

"Although Colorado Common Cause and the Colorado League of Women Voters fought for the new 2002 campaign finance laws, they've been unwilling to do anything to stop union abuses," said Scott Gessler, a legal expert in campaign finance laws.

While union small donor committee efforts were temporarily stalled last August after then-Secretary of State Gigi Dennis issued a rule requiring unions to get written permission from members before using dues money for political activities, a subsequent court ruling struck down the rule, with the court ruling that Dennis had exceed her authority to make such a decision. The ruling ultimately allowed SEIU and its peer organizations to use member money to fund small donor committees without member consent or disclosure. "The unions spent tens of thousands of dollars fighting the rules," said Gessler. "Since then, the United States Supreme Court has made it tougher for unions to take money without permission, and hopefully the Secretary of State Mike Coffman will stop these abuses."

SEIU was not alone in utilizing small donor committees during the 2006 election. Other liberal unions, including the Colorado Council of Teamsters and the Colorado Education Association joined with SEIU Colorado to pump more than $1.5 million into state and local races before early voting got into full swing last fall. Under Colorado's campaign system, money made prior to September is especially valuable because residents can vote a full several weeks before Election Day in a variety of ways, including mail ballots or early voting at designated voting centers.

Prior to Dennis' ruling, according to a 2006 Rocky Mountain News analysis, union small donor committees had contributed more than $1.35 million to candidates, parties, and 527 committees, a figure more than ten times greater than the $117,000 all other non-union committees had given to such candidates and organizations.

According to Eric Sondermann, a well-known Denver political consultant, early fundraising plays an essential role in Colorado campaigns. "As the election time table has gotten accelerated, the costs of campaigns have gone up and the need to raise money has gone up with it," he said. "In the good old days, you tried to reach a crescendo in the few days before an election, now it must be done three weeks or more before Election Day, and once you hit it, you can't come down."

Democrat Payback for Big Union Money?

Unions also funded their political agenda in 2006 by giving generously to 527 groups, independent organizations established under state law that are not tied to specific candidate or issue campaigns and which can raise and spend money exempt from limits. Such groups, if funded through small donor committees, are exempt from an otherwise established ban on engaging in "electioneering communications" 60 days prior to a primary or general election.

SEIU and the CEA gave hundreds of thousands of dollars to "Citizens for Colorado", a Democrat-group otherwise funded by well-known millionaire activists Rutt Bridges, Pat Strkyer, and Tim Gill. Smaller unions also used their small donor committees to funnel contributions to other 527s, including the Colorado Democratic Senate Campaign Fund.

Election watchers now say SEIU's small donor contributions were made in expectation of results. The Democrat majority in the state legislature sent shock waves throughout Colorado when it voted to pass House Bill 1072, legislation which would have altered Colorado's Labor Peace Act by eliminating a second secret vote in workplaces considering unionization. Ritter, faced with a strong united push from Colorado's business community and workers angered that the bill would have removed the vital protection of secret voting, ultimately vetoed the bill but not without remorse.

In a publicly released statement, he extended his "sympathies" to Colorado's "working families" and also expressed remorse to union leaders, writing "I recognize how deeply disappointed my friends in organized labor will be with this decision."

Insiders now believe union bosses will be back again for more rewards next year. "In his heart, the governor supported the measure. (The unions) are going to be emboldened and they are on the offense with their new Democratic majority," Wadhams said.

When asked how his party will fight the millions of dollars national unions are pumping into Colorado, Wadhams expressed a back-to-basics approach. "We've dealt with this reality for a while now and we've won before with good candidates running good campaigns; this is how we'll continue to win in the future."

Sondermann said GOP candidates will face multiple obstacles in future elections. "Small donor committees overwhelmingly support Democrats, but when you move beyond them, we've seen that Democrat interests are able to put another zero on the end of checks that the GOP can't," he said. "Even though the GOP has been historically been seen as the party of money, that's just not the current situation in Colorado."