Midvalley rec group fixes campaign finance snafu
October 22, 2009
EL JEBEL – A midvalley group promoting a recreation center was told by the Eagle County clerk on Wednesday it cannot spend $20,000, which it collected from taxpayers, on an election campaign this fall.
Eagle County Clerk Teak Simonton said the Friends of the Crown Mountain Recreation Center is in a unique situation because it is both an issue committee promoting a ballot question and a 501(c)3 nonprofit organization. In its role as a nonprofit, the friends organization collected about $27,000 earlier this year to fund planning for a recreation center. The contributions included $10,000 each from the town of Basalt and the Crown Mountain Park and Recreation District, governmental entities which are supported by taxpayers.
The nonprofit later realized it couldn’t complete the recreation center planning through donations alone. It successfully lobbied the Crown Mountain Park and Recreation District to place a question on the ballot seeking a one-year increase in property taxes to raise additional funds for the planning. Question 4A is on the ballots of Eagle and Pitkin County residents in the midvalley.
During the campaign, the lines between the nonprofit and the issue committee got blurred. In a campaign finance report filed Oct. 16, the Friends of the Crown Mountain Recreation Center Committee listed Basalt, as well as the park and recreation district, as contributors to the political campaign. That raised a red flag – and potential problems for the taxing entities. Local governments in Colorado are forbidden by law from contributing to campaigns of candidates or issues, said Richard Coolidge, spokesman for the Colorado Secretary of State Office.
Basalt Mayor Leroy Duroux was surprised that the town’s $10,000 contribution was listed on the friend’s campaign finance report. The donation was approved by the council specifically for recreation center planning – well before a ballot question was contemplated, Duroux said. The town government’s donation was received by the Friends of the Crown Mountain Recreation Center on Jan. 4 – months before the ballot question was crafted.
Duroux said it is clear that the town’s donation cannot be used as part of the 4A campaign. The town never received a request to use the funds in such a way, he said.
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Bob Noone, the attorney for the Crown Mountain Park and Recreation District, didn’t return messages on Tuesday or Wednesday for comment on the issue.
Simonton said she spoke to Kellie Smith, the representative of the Friends of the Crown Mountain Recreation Center, on Wednesday to try to resolve the issue. Simonton said she suggested the organization amend its campaign finance report because the current one is inaccurate. The finance report shouldn’t list contributions made to the nonprofit as contributions to the issue committee, she said.
The nonprofit organization must also make sure it doesn’t mingle the $20,000 collected from the town of Basalt and Crown Mountain Park and Recreation District with funds used on the election campaign, Simonton said.
Smith said she understands the error and was amending the report Wednesday. She said funds collected by the nonprofit and the issue committee will be kept separate. The funds from the town of Basalt and Crown Mountain Park and Recreation District won’t be spent on the campaign, Smith said.
The amended report, filed online with the Secretary of State’s office, indicated that Friends of the Crown Mountain Recreation Center Committee actually collected $6,300 and spent $4,460.18 in the campaign through mid-October. About $27,000 collected prior to the formation of the issue committee were subtracted from the campaign contributions.
The recreation center campaign is largely a grassroots effort. Smith is a volunteer who said she was inexperienced in campaign finance reports and made a mistake filling it out.
Ken Ransford, a Basalt attorney who helped form the Friends of the Crown Mountain Recreation Center nonprofit, said the case was simply a misunderstanding of the rules. There was no attempt to spend taxpayers’ funds in a campaign.
He stressed that there was no problem with the town of Basalt or Crown Mountain Park and Recreation District contributing to the nonprofit organization. Those funds were used or will be used for their intended purpose of planning the recreation center. They will not be used in the campaign, he said.
The accounting between the issue committee and nonprofit is more than academic. Coolidge of the Secretary of State’s office said a nonprofit cannot be used as a “conduit” for public funds in an issue committee. The burden to make sure that doesn’t happen falls on the public entity.
“The town [of Basalt] is liable for giving, not the issue committee for receiving,” he said.
The potential penalty for public entities violating the ban on contributions to political campaigns is two to five times the amount contributed, Coolidge said.
Ransford said the problem with the campaign finance report shouldn’t mar the election issue. Ballot question 4A is quite straight forward. If approved, it would allow the Crown Mountain Park and Recreation District to increase the mill levy a modest amount for one year to raise funds to plan issues like the location and amenities of a recreation center. It wouldn’t provide the funds to build the facility. Funding would be sought in a future election.