Colorado becoming a hotbed for stealth political organizations
AURORA – Citizens for a Better Colorado. Trailhead. Coloradans for Civil Justice. They have warm and fuzzy names, but few voters know what they stand for or who is behind them.With election battles looming for control of the Legislature, an open governor’s seat and a host of hot-button ballot issues, Colorado is becoming a hotbed for mysterious political organizations known as 527s, their IRS tax code.”People have a right to know who is contributing. This important notion goes straight to the heart of democracy,” said Alan Philp, the director of Trailhead. He said he is trying to find out who is behind a group, Research and Democracy, he says acts like a 527 and hasn’t bothered to register in Colorado.The groups often have hidden agendas that include support or opposition to candidates or issues – even though the organizations are limited by federal law to educating voters and barred from recommending specific action, said Pete Maysmith, executive director of Colorado Common Cause.Maysmith said 527s are often used for stealth campaigns by people who never disclose who paid them or what they want. He said the only way to determine what they really want is to research the contributors and recipients, a time-consuming and often fruitless task.”They’re becoming vehicles of choice for people who want to pour unlimited money into political campaigns. People behind some of these groups want to obscure their supporters and what they stand for,” Maysmith said.Court rulings make it clear the state cannot ban the groups, he added, because it would violate free speech rights.Citizens for a Better Colorado registered with the Internal Revenue Service on May 16, then launched a series of radio ads attacking Republican Rep. Bob Beauprez, who is leaving Congress to run for governor.Although it sounds like a grassroots organization, it would be tough for Coloradans to donate. The Aurora address the group gave to the IRS doesn’t exist, according to the owner of the UPS Store in Aurora where the address is located.According to IRS records, the group was set up by David Schwager, an attorney who works in Wilkes-Barre, Pa. Schwager did not return several phone calls seeking comment.Marc Holtzman, who is battling Beauprez for the GOP gubernatorial nomination, said Schwager is a high school friend. Holtzman said he knows nothing about the group because he is barred by law from coordinating with that campaign.Holtzman, in fact, said 527s are hurting his campaign and wishes they would stop. He said he would rather they contribute and participate up front.”If they think they’re helping my campaign, they’re not,” he said.A dozen 527s have been set up in Colorado since 2000, according to the Center for Public Integrity in Washington. The groups have reported receiving $4.3 million in contributions and spending $3.3 million on political campaigns over the past six years.Groups that have reported their contributions and spending include the Coalition for a Better Colorado (set up to get out the vote for labor unions), Wild PAC (to protect public lands), Alliance for a Better Colorado (backs Democrats) and Trailhead (supports Republicans).Their contributors are often wealthy and have already contributed the maximum legal amount directly to the campaigns.For example, beer magnate and former GOP Senate candidate Pete Coors gave $50,000 to Trailhead and Tim Gill, a Colorado gay rights advocate and software pioneer, gave $34,000 to the Coalition for a Better Colorado.In March, the state Republican Party filed a lawsuit asking a judge to order 11 Democrats to turn over donation records from Research and Democracy after the Democrats, all lawmakers, reported receiving $83,000 in services from the group. House Minority Leader Alice Madden, D-Boulder, said the services were credited to the Democrats’ office accounts, which allow unlimited contributions to lawmakers to pay for constituent services not funded by the state.Philp said the donations to office accounts are allowed for 527s, but they still have to register and report their contributions. A hearing is pending.To listen how such a group was set up has a cloak-and-daggers aura: Ed Ramey, an attorney for Research and Democracy, said he doesn’t know the contributors. He said a client came in and asked him to set up the political group in 2004.Ramey said that as far as he knows, the group only conducted surveys for Democratic lawmakers, sent them a statement of services rendered and then went dormant. He said the lawmakers weren’t even required to disclose the contributions, but he recommended they do so to avoid any questions.According to Ramey, the group does not have to disclose its contributors because it was sent up under another section of the tax code as a nonprofit organization that does not accept tax-exempt contributions. He said those groups, also known by their tax code, 501c4s, are also allowed to contribute to office accounts.Ramey said it was up to the group to register with the IRS and he was told they had done so.”If they failed to do that, they’re subject to a tax and they’re going to have to pay it,” he said.
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