scott gessler appeal of ethics commission sanctions - opening brief

8/13/2019 Scott Gessler appeal of Ethics Commission sanctions - Opening Brief

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DISTRICT COURT, CITY AND COUNTY OF DENVER,STATE OF COLORADO1437 Bannock StreetDenver, Colorado 80202

Plaintiff: SCOTT E. GESSLER, individually and in hiscapacity as the Secretary of State of the State of Colorado

v.

Defendants: DAN GROSSMAN, SALLY H. HOPPER,BILL PINKHAM, MATT SMITH and ROSEMARYMARSHALL in their official capacities as members of theIndependent Ethics Commission and the INDEPENDENTETHICS COMMISSION, an inferior tribunal of the Stateof Colorado

______________________________________________Attorneys for Plaintiff:

David A. Lane, #16422KILLMER,LANE &NEWMAN,LLPThe Odd Fellows Hall1543 Champa Street, Suite 400Denver, Colorado 80202Telephone: (303) 571-1000; Fax: (303) [email protected]

Robert J. Bruce, #17742RJBLAWYER,LLC1543 Champa St., Suite 400Denver, Colorado 80202Telephone: (303) 573-5498; Fax: (303) [email protected]

Michael R. Davis, #39788LAW OFFICE OF MICHAEL R.DAVIS,LLC (MRDLaw)3301 West Clyde PlaceDenver, Colorado 80211

Telephone: (303) 325-7843; Fax: (303) [email protected]

COURT USE ONLY

________________________Case No.: 2013CV030421

Div:

OPENING BRIEF OF SECRETARY OF STATE SCOTT E. GESSLER

DATE FILED: November 12, 2013 7:57 PM

FILING ID: C025D809C31AF

CASE NUMBER: 2013CV30421


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Table of Contents

Page

Introduction ............................................................................................................................1

Statement of the Issues ...........................................................................................................2

Standard of Review ................................................................................................................3

Factual and Procedural Background ......................................................................................4

Argument ...............................................................................................................................9

1. The IEC went beyond its jurisdiction, which is limited to enforcing a ban ongifts from a person to influence a public official. ..................................................9

A. The IECs authority is limited to gifts from a person to influence anelected official. ...............................................................................................9

B. An elected officials discretionary fund lies outside of the IECsauthority. ........................................................................................................15

(1)The Secretary, not the IEC, has authority to determine howdiscretionary funds are spent ...................................................................15

(2)Discretionary funds are not gifts to elected officials ...............................16(3)The Secretary did not and could not influence himself by spending

discretionary funds ...................................................................................18

C. The IEC may not create liability based on a statement of purpose ............192. Regardless of the IECs overreaching jurisdiction, the Secretarys expenditures

were proper. ...............................................................................................................20

A. As Colorados chief election officer, the Secretary appropriately useddiscretionary funds to participate in an accredited election-law conference. 20

B. The $117 expenditure was not a gift; it was a valid use of funds for statebusiness, regardless of the timing of receipts. ...............................................25

3. The IEC violated the Secretarys right to due process in several ways: it appliedan unconstitutionally vague standard; refused to provide notice of chargesprohibited the Secretary from obtaining and introducing evidence; allowed


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heavily biased commissioners to participate in the proceedings; and served asinvestigator, prosecutor and judge. ............................................................................30

A. The phrase other standards of conduct is unconstitutionally vague. ..........30B.

Despite the Secretarys repeated requests, the IEC never identified thecharges; the IEC listed 10 legally insufficient statements that may apply,said the charges were subject to change after the hearing, and stated thatadditional charges might apply...................................................................35

C. The IEC denied the Secretary the basic right to conduct discovery orpresent evidence in his defense. .....................................................................38

D. Two biased commissioners refused to recuse themselves despite serious,documented biases against the Secretary. ......................................................39

E.

The Commission assumed an improper prosecutorial role, by making upits own legal allegations against the Secretary separate from CREWscomplaint........................................................................................................42

4. The IEC violated the Secretarys right to free speech and free assembly byprohibiting his official attendance at an accredited continuing legal educationconference, solely because a Republican organization sponsored the conference. ...44

A. The IEC violated both the Secretarys right to free speech and freeassembly. ........................................................................................................44

B. The First Amendment violations found by Denver District Court inDevelopmental Pathways v. Ritterare now ripe for adjudication ................48

Relief Requested ....................................................................................................................51


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Introduction

In this case, the Independent Ethics Commission (the Commission or the

IEC) went far beyond its jurisdiction. Recent Colorado case law states that the IECs

jurisdiction is limited to enforcing a ban on gifts from a person to influence a public

official. Here, the IEC exceeded their jurisdiction by investigating and opining on the

Secretarys use of his discretionary fund. As a matter of law, use of the monies in a

discretionary fund cannot be a gift from a person to an elected official; rather, the

discretionary fund is comprised of State money appropriated by the Colorado General

Assembly for the officials use.

Remarkably, the IEC didnt stop there, it went even further past its bounds to

assert jurisdiction over criminal laws, and went still further to find that the Secretary

violated a statement of purpose in the preamble to Amendment 41, a statement more akin

to a legislative aspirational declaration than substantive law.

Regardless of the IECs jurisdiction, the Secretarys expenditures were proper.

Because the Colorado Secretary of State is the States Chief Election Official, it was

entirely proper for the Secretary to use discretionary fund monies to participate in an

election law conference accredited by the Colorado Supreme Court. The conference was

no different than the types attended by Colorados Governor, Lieutenant Governor and

Attorney General. Additionally, uncontroverted evidence shows that the Secretary used

$117 for state business, regardless of the timing of receipts for the reimbursement.

Next, the IEC used an unconstitutionally vague phrase, other standards of

conduct, as an open-ended, catch-all term to wield jurisdiction over every possible law,

regulation, professional or accounting standard it saw fit. In this instance, the IEC used


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the vague phrase to review the Department of States accounting procedures, the state

fiscal rules, criminal laws, breaches of public trust, and any other standard. The

phrase other standards of conduct is unconstitutionally vague on its face because it

allows the IEC to assert jurisdiction over any conceivable standard, regardless of its

nexus to Amendment 41.

In conducting itself in such a manner, the IEC violated the Secretarys right to due

process in several ways: it refused to give the Secretary or the general public any notice

of the charges against the Secretary; it prohibited the Secretary from obtaining and

introducing evidence; it allowed two biased commissioners to participate in the

proceedings; and the IEC served as investigator, prosecutor, and judge.

Finally, the IEC violated the Secretarys fundamental right to free speech and free

assembly by prohibiting his official attendance at a continuing legal education conference

accredited by the Colorado Supreme Court just because a Republican organization

sponsored the conference.

For these reasons, the Court should set aside the IECs actions in this matter and

should overturn the IECs sanctions against the Secretary for exercising First Amendment

rights. Additionally, the Court should strike the term other standards of conduct from

Amendment 41 and its enabling statute.

Statement of the Issues

Issue 1: IEC Exceeded Jurisdiction

Under Amendment 41s and the IECs enabling statutes plain language,along with relevant case law, the IECs jurisdiction is limited to giftsgiven for the purpose of influencing a public official. Here, the IEC neveraddressed the gift ban, but instead sanctioned the Secretary for what it


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deemed was an improper use of his discretionary fund and otherstandards of conduct. Did the IEC exceed its jurisdiction?

Issue 2: IEC Findings of Fact were Arbitrary and Capricious

A Court must set aside any agency action it finds is arbitrary or capricious.The Commission heard no evidence to support any potential allegationthat the Secretary violated a law or standard of conduct. Was the IECsdecision arbitrary and capricious?

Issue 3: Violation of Secretarys Due Process Rights

Courts have long recognized a defendants right to defend himself,including the right to present evidence and question accusers. Due processalso requires proper notice of the charges and a fair and impartial tribunal.Here, the IEC applied an unconstitutionally vague standard and repeatedly

refused to provide notice to the Secretary. The IEC prohibited theSecretary from presenting evidence in his defense and would not allowhim to conduct basic discovery. Finally, two heavily biasedCommissioners refused to recuse themselves. Did the IEC violate theSecretarys Due Process rights?

Issue 4: Violation of the Right to Free Speech and Assembly

Longstanding First Amendment jurisprudence prohibits regulation ofspeech or assembly, unless the government has a compelling interest andthe regulation is narrowly tailored to achieve that interest. The IECeffectively prohibited the Secretary and other elected officials fromengaging in speech and attending events without explaining the need forthe prohibition. Moreover, the Commissions vague, arbitrary, andevolving standards cause a prior restraint and chilling effect on protectedFirst Amendment activities. Did the IEC violate the Secretarys FirstAmendment rights?

Standard of Review

Jurisdiction

Colorado law states that any final commission action is subject to judicial review

by the Denver District Court.1In an earlier proceeding on this matter, this Court

1C.R.S. 24-18.5-101(9).


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determined that any such review should be in accordance with Colorados Administrative

Procedure Act (APA).2

The APA allows any person affected or aggrieved by an agency action to seek

judicial review in district court within 35 after the effective date of the action.3In this

matter, the IEC issued its Final Order on June 19, 2013, and the Secretary filed a claim

for judicial review on July 2, 2013, within the 35-day timeframe.

Standard of Review

This court must set aside any agency action and restrain the enforcement of any

agency order that the Court finds is arbitrary or capricious, a denial of a statutory right,

contrary to constitutional right, in excess of statutory jurisdiction, not in accordance with

procedural limitations required by law, or otherwise contrary to law. A court must also

set aside an agency action where the findings of fact are clearly erroneous on the whole

record or unsupported by substantial evidence.4

In determining whether an agencys decision is arbitrary or capricious, the court

must determine whether a reasonable person, considering all the evidence, would fairly

and honestly be compelled to reach a different conclusion.5

Factual and Procedural Background

On October 15, 2012, Citizens for Responsibility and Ethics in Washington, d/b/a

Colorado Ethics Watch (CREW) filed a self-styled complaint with the IEC alleging

that the Secretary may have committed a felony and two misdemeanors by expending

2Gessler v. Grossman, No. 13CV030421 (Denver Dist. Ct. Sept. 26, 2013) (order on

Defendants motion to dismiss).3C.R.S. 24-4-106(4).4Id.5Ramseyer v. Colo.Dept.ofSoc.Servs., 895 P.2d 1188 (Colo.App.1995).


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$1,818.89 in state funds ($1,396.89 in discretionary funds and $422.00 in Department

funds). (R. 00001). This Complaint was supplemented on October 22, 2012. (R.

00020). The complaint did not assert any wrongdoing but rather the mere possibility of

wrongdoing.

The IEC met on November 5, 2012, the day before the 2012 General Election.

CREWs complaint rested entirely on criminal law; it had no nexus to Amendment 41s

gift ban, lobbying ban, or prohibition on influence peddling. The IEC nonetheless

asserted jurisdiction and ordered the Secretarys response. (R. 001360).

The IEC reviewed the complaint in a confidential executive session without

providing notice to the Secretary. (R. 000200, 001359). Although not at issue here, this

violated the Colorado Sunshine Law, which requires that all meetings held by members

of a state public body to consider the investigation of charges or complaints against a

public official must be open to the public unless the official requests an executive

session.

Despite the fact that the complaint stated the Secretary may have violated

criminal laws, the IEC nevertheless went forward and deemed the complaint non-

frivolous, yet never notified the Secretary of its decision.

Rather than notifying the Secretary, the IEC, upon adjournment of the executive

session, instead notified both CREW and local media outlets of its decision. In fact, the

Secretary had to learn of the IECs decision from media accounts. After reading the

media accounts of the IECs decision on November 5, 2012, the Secretarys office

requested a copy of the complaint. The IEC provided a partial copy the next day. Two


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days later, on November 8, 2012, the IEC served the Secretary with the full complaint,

including exhibits. (R. 000206).

Due to the IECs delay, the Secretary requested an extension through February 1,

2012, to submit his response (originally due December 10, 2012,) to review the records.

(R. 000200). The IEC granted an 11-day extension to December 21, 2012.

At the same time they filed their complaint with the IEC, CREW forwarded the

same complaint to the Denver District Attorney, who exercised jurisdiction and began a

parallel review. Because of this parallel proceeding, the Secretary asked the IEC for a

short stay pending the resolution of the Denver District Attorneys review. (R. 000200).

Again the IEC denied this reasonable request. During oral argument, the Secretary raised

the due process issue of notice. In response, commissioner Grossman sated that the IECs

jurisdiction was not limited as a result of the complaints criminal allegations, but could

review the factual allegations under other standards of conduct. (R. IEC Open Meeting

1/3/13). Counsel for the Secretary objected to this standard, arguing that CREW made

three criminal allegations only, and the lack of non-criminal allegations made it

impossible for the Secretary to defend himself against vague and unspecified other

standards of conduct. On December 20, 2012, the Secretary fully and substantively

responded to the factual allegations in the complaint, denying all wrongdoing. (R.

000231).

CREWs complaint alleged misuse of monies from two separate and distinct

funds: the Secretarys discretionary fund and the Department of State cash fund. The

General Assembly appropriates monies to the discretionary fund and the Secretary may

use the monies for official business as he sees fit. Conversely, monies in the Department


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cash fund are generally comprised of business filing fees. In his response, the Secretary

affirmed that he used monies from each of the funds as follows:

1. $1,278.90 in fiscal year 2011-2012 of discretionary fundsto travel to

Sarasota, Florida (airfare, luggage, three nights of lodging, and meals) toattend and serve as an expert panelist in an election-law seminar andContinuing Legal Education (CLE) program sponsored by the RepublicanNational Lawyers Association (RNLA) and accredited by the ColoradoSupreme Court;

2. $422 inDepartment fundsto return early from Florida, at his chief ofstaffs request after discussions with Colorado law-enforcementauthorities, following two specific and credible threats of violence againstthe Secretary, his wife, and their then-four-year-old daughter, directlyrelated to the Secretarys official duties; and

3. $117.99 in fiscal year 2011-2012 of discretionary fundsfor end-of-yearreimbursement, submitting a general memorandum in lieu of receipts, butfor which the Secretary has subsequently provided a specific breakdownof $616 in unreimbursed expenses.

(R. 000231-721).

On the same day, the Secretary also separately filed a motion to dismiss, arguing

that the IEC lacked jurisdiction over (a) allegations that do not involve Amendment 41s

gift ban, lobby ban, or prohibition on influence peddling; or (b) criminal allegations. (R.

000200). To the extent that CREW was not making criminal allegations, the Secretary

argued, (c) the legal allegations against the Secretary were vague and undefined. Again,

the IEC neglected to notify the Secretary of the specific charges against him. (R.

000200).

On January 23, 2013, the Commission issued its written order following its prior

vote to deny the Secretarys motion to dismiss. (R. 000733). The IEC asserted broad

jurisdiction over vague and unspecified other standards of conduct or reporting


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requirements; the IEC even asserted jurisdiction over a vague and unspecified potential

violation of the Constitution. Specifically, the Commission ruled as follows:

Respondent further contends that the Complaint should be dismissed

because the Commission only has jurisdiction over influence peddling.However, the Complaint alleges sufficient facts warranting a Commissioninvestigation of a potential violation of the Constitution or of the standardsof conduct or reporting requirements and dismissal on this theory isunwarranted.

(R. 000733).

The IEC continued to deny repeated requests to clarify the charges, even representing to

this Court on February 7, 2013, that charges would be forthcoming.

After the hearing before this Court, Secretary Gessler sought discovery. This

Motion was denied. (R. 001374). Secretary Gessler then sought to recuse two

commissioners. Those requests were denied. (R. 001370 and 001378). Secretary

Gessler then requested the matter be referred to an Administrative law Judge for an

advisory determination. This, too, was denied. (R. 001370).

Two and one half months passed, on April 30, 2013, the Commission listed five

different civil statutes and five different fiscal rules, any or all of which may apply to

this case as the legal standard(s) in this case. (R. 000881-884). The order stated that the

legal standard(s) against which the Secretary was to defend were subject to change,

depending on the evidence presented, and the arguments made, at the hearing in this

matter. (R. 000881). The IEC reserved the right to make a determination that the

Secretary violated some othervague, unspecified, and evolving legal standards.

On May 20, 2013, Secretary Gessler repaid $1278.90 to avoid even an appearance

of impropriety. (R. 001272). Even thought this should have rendered the matter moot,

the IEC continued to pursue the matter.


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Following seven months of pretrial proceedings, the IEC set the matter for a one

day hearing on June 7, 2013. Twelve days later, on June 19, 2013, the IEC issued a

written order finding, among other things that:

1. Secretary Gessler spent $1278.90 of his discretionary account primarily forpartisan purposes, and therefore personal purposes, to fly to Florida to attend theRNLA conference and thereafter attend the RNC. As a result, Secretary Gesslerviolated the ethical standard of conduct contained in C.R.S. section 24-9-105, byusing funds from his discretionary account for other than official business. By sodoing, Secretary Gessler breached the public trust for private gain in violation ofC.R.S. section 24-18-103 (1).

2. Secretary Gesslers acceptance of reimbursement of the balance of thediscretionary account without any documentation or detail of expenses incurred,

violated the ethical standard of conduct contained in C.R.S. section 24-9-105 inthat such reimbursement was not in pursuance of official business but waspersonal in nature. By so doing, Secretary Gessler breached the public trust forprivate gain in violation of C.R.S. section 24-18-103 (1).

3. Secretary Gesslers acceptance of reimbursement from state funds for the travelexpenses incurred as a result of his early return to Denver in the wake of threats tohim and his family does not violate any ethical standards of conduct provided bylaw. The necessity of the early return was directly related to Mr. Gesslersposition as Secretary of State(R. 001352-1358). To the extent that suchpayment was for the hotel stay paid for out of campaign funds, the IEC concludesthat any such reimbursement would be for personal purposes and not for officialbusiness.

The IEC penalized the Secretary by ordering him to pay back $1,396.89. The IEC then

doubled the penalties for a total of $2,793.78, which was to $1,514.88, a number that

reflects a $1,278.90 credit. Id.

Argument

1. The IEC went beyond its jurisdiction, which is limited to enforcing a ban ongifts from a person to influence a public official.

A. The IECs authority is limited to gifts from a person to influence anelected official.


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The IECs jurisdiction stems from Article XXIX (Amendment 41) of the

Colorado Constitution, entitled Ethics in Government. The article contains five

prohibitions a gift ban for public officials, a gift ban for family members, an absolute

gift ban from lobbyists, and a prohibition on lobbying by former elected officials. This

case involves only the ban on public officials from receiving gifts greater than $50 per

year. It does not involve a family member, gifts from a lobbyist, or lobbying activity by

the Secretary of State.

As a first step in interpreting a constitutional provision, the Court must look at the

plain language and give effect to every word.

6

Additionally, one must consider the

object to be accomplished and the mischief to be prevented.7Here, plain language of

Amendment 41 prohibits gifts only. Section 3, entitled gift ban, reads in relevant part

as follows:

(1) No public officer . . . shall accept or receive any money, forbearance,or forgiveness of indebtedness from any person, without such personreceiving lawful consideration of equal or greater value in return from thepublic officer . . . who accepted or received the money, forbearance orforgiveness of indebtedness.

(2) No public officer . . . shall solicit, accept or receive any gift or otherthing of value having either a fair market value or aggregate actual costgreater than fifty dollars ($50) in any calendar year . . . from a person,without the person receiving lawful consideration of equal or greater valuein return from the public officer . . . who solicited, accepted or receivedthe gift or other thing of value.

The term gift is clear and unambiguous. It is a thing given willingly to

someone without payment.8Here, no person gave the Secretary a gift. Rather, the

6See City of Aurora v. Acosta, 892 P.2d 264, 267 (Colo. 1995).7Colo. Ethics Watch v. Senate Majority Fund, LLC, 275 P.3d 674, 682 (Colo. App. 201),affd269 P.3d 1248 (Colo. 2012) (internal quotation omitted).8Oxford Am. College Dictionary, 565 (Oxford University Press 2002).


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Secretary used monies from his discretionary fund and from the Department of State cash

fund. As explained in more detail below, the monies in these two funds are state monies

appropriated by the General Assembly. They are not given willingly without payment.

Because these monies are not gifts, the Secretarys conduct cannot fall under Amendment

41s purview. Put plainly, the IEC has no jurisdiction.

The plain language is reinforced by the 2006 Bluebook.9Mailed to all voters in

the state, the 2006 Bluebook described Amendment 41 to every voter. Voters relied upon

the Bluebook description and, recognizing the Bluebooks critical importance, the

Colorado Supreme Court recently reaffirmed that the Bluebook shows the voters intent

in passing a ballot measure:

[A] court may ascertain the intent of the voters by considering otherrelevant matters such as . . . the biennial Bluebook, which is the analysisof ballot proposals prepared by the legislature.10

The 2006 Bluebook described the five - and only five - provisions of Amendment

41:

A ban on public officials receiving gifts greater than $50 per year; A ban on family members of public officials receiving gifts greater than $50 per

year;

A total ban on lobbyists ability to give gifts to public officials and their families; A prohibition on lobbying government officials following government

employment; and

The creation of a new Independent Ethics Commission.11In short, the Bluebook shows that voters intended to ban gifts only (plus lobbying

following public employment, which is not at issue in this case).

9Colo. Legis. Council, Research Pub. No. 554, 2006 BallotInformationBooklet:Analysis of Statewide Ballot Issues, 9 (2008).10SeeColo.EthicsWatchv.SenateMajorityFund, LLC, 269 P.3d 1248, 1256 (Colo.2012) (quoting InreInterrogatoriesonHouseBill991325, 979 P.2d 549, 554 (Colo.1999)).11

Research Pub. No. 502-1, p. 9. (emphasis supplied).


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Under its power to enact[] . . . legislation to facilitate the operation of

[Amendment 41], the General Assembly has further defined the IECs jurisdiction with

respect to Amendment 41s ban on gifts. Specifically, it has mandated that the IEC

must dismiss as frivolous any complaint filed under article XXIX that fails to allege that

a public officer . . . accepted or received any gift or other thing of value for private gain

or personal financial gain.12Furthermore, the General Assembly adopted a very specific

definition of private gain or personal financial gain to mean:

any money, forbearance, forgiveness of indebtedness, gift, or other thing of valuegiven or offered bya person seeking to influence an official actthat is performed

in the course and scope of the public duties of a public officer . . . .

13

Thus, a person must give the gift (or thing of value) in an effort to influence an official

act.

When the General Assembly enacts a statute, courts must presume that the statute

complies with the United States and Colorado Constitutions.14

The Court should give

effect to the ordinary meaning of words used by the legislature and the statute should

be construed as written, giving full effect to the words chosen, as it is presumed that the

General Assembly meant what it clearly said.15Additionally, if a statute is clear, the

court will give meaning to the plain meaning of the words and phrases.16

It is undisputed that C.R.S. 24-18.5-101 (Section 101) limits the IECs

jurisdiction. The State of Colorado admitted before the both Denver District Court and

the Colorado Supreme Court that C.R.S. 24-18.5-101 is necessary to preserve the

12C.R.S. 24-18.5-101(5)(a).

13C.R.S. 24-18.5-101(5)(b)(II) (2013) (emphasis supplied)14C.R.S. 2-4-201.15

State v. Nieto, 993 P.2d 493, 500 (Colo. 2000).16

In re Estate of Holmes, 821 P.2d 300 (Colo. App 1991).


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constitutionality of Amendment 41. Furthermore, the Colorado Supreme Court

recognized the necessity of the jurisdictional limits in Section 101.

The General Assembly adopted Section 101 specifically to ensure Amendment

41s constitutionality. Shortly after Amendment 41s passage, various plaintiffs sued

Colorado, arguing that because the gift bans were overbroad and vague, they violat[ed]

their First Amendment rights to free speech, free association, and petition.17While this

lawsuit was pending, the General Assembly adopted Section 10118expressly limiting the

IECs jurisdiction.

In his efforts to defend Amendment 41 from a serious First Amendment challenge

in the Denver District Court, Colorados Attorney General admitted that Amendment 41

was limited to influence peddling:

[w]hen article XXIX [Amendment 41] is read as a whole and theprovisions harmonized, it requires a nexus between the gifts or activitiesand the covered persons public responsibilities. That is, the amendmentlimits or prohibits only those gift and activities that would cause thecovered official to breach the public trust for private gain.

19

The Colorado Supreme Court later relied upon the Attorney Generals representation to

the Denver District Court that Section 101:

[c]onfirm[ed] the existence of a nexus between the gift ban provisions andthe receipt of gifts in violation of the public trust for private gain, thusnegating Plaintiffs constitutional challenges of overbreadth andvagueness.

20

17Developmental Pathways v. Ritter, 178 P.3d 524, 526 (Colo. 2008).18Id. at 528 (citing C.R.S. 2418.5101).19Colo. Atty Gen.s Br. in Oppn to Pls. Mot.for Prelim. Inj., DevelopmentalPathwaysv.Ritter, Case No. 07CV1353, 2007 WL 5794312 (Denver District Court, filed April26, 2007).20Developmental Pathways, 178 P.3d at 528.


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Critically, the Colorado Supreme Court concluded that Section 101 did not create

a new requirement but rather confirmed the existence of the requirement that the

receipt of the gift be for private gain.21

Although the Colorado Supreme Court

ultimately dismissed the case as unripe, the IEC is bound by the Attorney Generals

representations, and the State may not now deliberately chang[e] positions according to

the exigencies of the moment.22

As a state agency, the IEC must follow the statute. Administrative agencies are

legally bound to comply strictly with their enabling statute. Agency rules that are

inconsistent with or contrary to the statute pursuant to which they were promulgated are

void.23

B. An elected officials discretionary fund lies outside of the IECs authority.The IECs jurisdiction cannot extend to the Secretarys discretionary fund for

three reasons: (i) the monies in the discretionary fund are not a gift; (ii) the money is

intended as an incentive to elected officials; (iii) and there is no allegation of influence

peddling.

1. The Secretary, not the IEC, has authority to determine how discretionaryfunds are spent.

The first reason why the IEC has no jurisdiction here is because discretionary

fund monies are state monies, not a gift. In Colorado, the Governor receives an annual

salary of $90,000; the Attorney General receives $80,000; and the Lieutenant Governor,

21Developmental Pathways, 178 P.3d 524, 526 (Colo. 2008).

22Eastmanv.UnionPac.R.Co., 493 F.3d 1151, 1156 (10th Cir. 2007) (quoting NewHampshirev.Maine, 532 U.S. 742, 74950 (2001)).23

Schlapp ex rel. Schlapp v. Colo. Dept. of Health Care Policy & Fin., 284 P.3d 177, 182(Colo. App. 2012).


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Secretary of State, and State Treasurer each receive $68,500.24Additionally, each

statewide elected official receives an annual discretionary fund for expenditure in

pursuance of official business as each elected official sees fit.25

The Governor receives

$20,000 each year, and the others each receive $5,000.26These discretionary funds are all

subject to annual appropriation by the general assembly.27

As the title and language of the discretionary-fund statute plainly indicates, and

unlike other state monies, the standards for discretionary-fund use are left to the

discretion of elected officials. Colorado law is very specific on this matter, stating the

funds are to be used as each elected official sees fit.

28

If the General Assembly had wanted to subject elected officials discretionary

funds to the same standard as other state expenditures, it could have simply said so. For

example, it could have set forth a standard for expenditure in pursuance of official

business according to the standards established by the Department of Personnel and

Administration. Or it could have stated according to the standards established by the

Governmental Accounting Standards Board. Or, it could have simply abolished the

discretionary funds completely, requiring all non-salary expenditures to fall within

standards applicable to other state spending.

However, the General Assembly did not set forth any of the standards above.

Rather, the General Assemblys standard is this: each statewide elected constitutional

24C.R.S. 24-9-101(1). Because he concurrently serves as the Executive Director of theColorado Department of Higher Education, Lieutenant Governor Garcias annual salaryis $146,040. http://blogs.denverpost.com/thespot/2011/01/11/hick-it-aint-about-the-salary/20409/ (last visited Nov. 8, 2013).25C.R.S. 24-9-105(1) (emphasis added).26Id.27Id.

28Id.


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officer has the flexibility to use the relatively limited discretionary funds for activities

that fall outside of normal state rules, but within official purposes, as the elected official

sees fit.

Moreover, the discretionary fund is appropriated by the legislature as part of the

overall budget of the executive agency. It is not a gift. It necessarily cannot be used to

influence an elected official. Regardless of the use of the fund, it does not fit within the

plain language of Amendment 41 or the enabling statute. Because it does not fit under

Amendment 41 or the enabling statute, the IEC does not have the authority to sit in

judgment over the Secretarys expenditures or the General Assemblys appropriation.

2. Discretionary funds are not gifts to elected officials.The second reason the IEC does not have jurisdiction here is because, under

Amendment 41, the gift ban does not apply to a thing of value that is . . . a component of

the compensation paid or other incentive given to the recipient in the normal course of

employment.29

Thus, Amendment 41s plain language specifically exempts monies in

the discretionary fund because such monies are a part of compensation or an incentive to

the Secretary.

A review of the legislative history leaves little doubt that the General Assembly

intended the discretionary fund to act as a component of the compensation paid or other

incentive given to the Governor, Lieutenant Governor, Attorney General, Secretary of

State, and State Treasurer. In fact, the very location of the discretionary fund statute, in

article 9 of Title 24, which is entitled Compensation of State Officers, shows the

legislatures intent.30

Although Title 24 provides a section of Other Standards of

29Colo. Const. art.XXIX , 3(3)(h).

30C.R.S. 24-9-105.


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Conduct, the legislature did not put the discretionary fund in this section. Further, the

bill that created the discretionary fund was enacted as a recommendation of the Colorado

State Official Compensation Commission because the commission felt it imperative for

the state to compensate its high-level officials in a manner which will attract and retain

highly qualified individuals.31

This clearly demonstrates the intent of the legislature and

plain language of the statute in offering a discretionary fund for elected officials to use as

they see fit.

The statute requires an elected official to make discretionary-fund expenditures

in pursuance of official business.

32

The interpretation of official business is and has

been wide and varied, in recognition of the fact that serving as an elected official is a full-

time endeavor; an elected officials public duties and personal life are inextricably

intertwined. For instance, holiday receptions enable an official to discuss official business

in an informal setting. Travel to national conferences and giving speeches on topics of an

officials particular expertise raises the profile of the official and undoubtedly benefits the

State of Colorado (as noted in prior IEC opinions). In sum, because the discretionary fund

is an aspect of the Secretarys compensation and because components of compensation

are not gifts under Amendment 41, the Commission has no jurisdiction to regulate the

expenditure of discretionary funds.33

Further, the precedent established by other Secretaries shows ample discretion by

the Secretary to determine official business. After his inauguration, the Secretary

retained Deputy Secretary of State Bill Hobbs, who had served six previous Secretaries of

State. Mr. Hobbs advised the Secretary that discretionary funds could be used at the

31See Colorado State Officials Compensation Commission Report, dated March 1983.32C.R.S. 24-9-105.33

Colo. Const. art.XXIX , 3(3)(h).


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complete discretion of the Secretary and that former Secretaries had simply treated the

discretionary fund as income. (R. 6/7/13 Hearing, Vol. I, pg. 47, ll. 2-5). For example,

prior elected officials have used the funds for personal clothing, charitable donations,

holiday parties, overseas travel, and even direct transfers to personal bank accounts. (R.

000283-85; R. 6/7/13 Hearing, Vol. I, pg. 45-7, ll. 7-18; pg 47, ll. 6-24). Additionally,

the State Auditor advised Department of State staff that receipts for discretionary fund

expenditures were not required. (R. 6/7/13 Hearing, Vol. I, pg. 83, ll. 9-22). This advice

was communicated to staff who advised the Secretary regarding his discretionary fund.

(R. 6/7/13 Hearing, Vol. I, pg. 270, ll. 12-20). Thus, the Secretarys use of discretion to

determine what qualifies as official business was no different than previously Secretaries

of State.

3. The Secretary did not and could not influence himself by spendingdiscretionary funds.

As discussed above, in order for the IEC to exercise jurisdiction it must find that

the gift or thing of value was given by a person seeking to influence an official act.34

Neither CREW nor the IEC ever allege or prove influence peddling, for obvious reasons.

A violation of Amendment 41s gift ban requires that the discretionary fund expenditures

be made to the Secretary in an effort to influence his behavior. But, of course, it was the

Secretary himself who authorized payment of funds from the discretionary fund to

himself. It is nonsensical and logically impossible for the Secretary to direct state funds

to influence himself. In this case the IECs application of the gift ban to discretionary

funds leads to an absurd result, which must be avoided.35

34C.R.S. 24-18.5-101(5)(b)(II).

35Bickel v. City of Boulder, 885 P.2d 215 (Colo.1994)


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C. The IEC may not create liability based on a statement of purpose.In its findings, the IEC cited a portion of C.R.S. 24-18-103(1). This provision

states, in part, that a public officer . . . shall carry out his duties for the benefit of the

people of the state. The IEC then improperly found that the Secretary had violated the

introductory portion of the public trust statute.36

The IEC created new law in finding that the Secretary violated a statement of

purpose. Under the rules of statutory construction, the courts only look to the legislative

declaration statement or purpose statement if a statute is ambiguous.37

The general rule is

that a legislative intent statement does not confer power or determine rights.

38

Additionally, the Colorado Supreme Court has held that general statements of legislative

intent which set forth policy aspirations do not create enforceable rights, or conversely,

enforceable duties.39

A review of the statute makes clear that subsection (1) is merely a legislative

intent statement and that subsection (2) is the only enforceable portion of the statute.

Section 24-18-103 reads:

24-18-103. Public trust - breach of fiduciary duty

(1) The holding of public office or employment is a public trust, createdby the confidence which the electorate reposes in the integrity of publicofficers, members of the general assembly, local government officials, andemployees. A public officer, member of the general assembly, localgovernment official, or employee shall carry out his duties for the benefitof the people of the state.

(2) A public officer . . . whose conduct departs from his fiduciary duty is

36C.R.S. 24-18-103(1).

37C.R.S. 2-4-203.38SeeSutherland's Statutory Construction, sec. 20.13 (4th ed).39

Goebel v. Colo. Dept. of Institutions, 764 P.2d 785, 802 (Colo 1988);Barela v. Bye,916 P.2d 668, 676 (Colo.App 1996).


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The IECs decision regarding the Secretarys use of discretionary-fund monies

was both arbitrary and capricious. The IECs decision makes sweeping, conclusory,

claims without providing any rationale or analysis. With regard to the election-law

conference, the IEC claimed:

Secretary Gessler spent $1278.90 of his discretionary account primarilyfor partisan purposes, and therefore personal purposes, to fly to Florida toattend the RNLA conference and thereafter attend the RNC. As a result,Secretary Gessler violated the ethical standard of conduct contained inC.R.S. section 24-9-105, by using funds from his discretionary account forother than official business. By so doing, Secretary Gessler breached thepublic trust for private gain in violation of C.R.S. section 24-18-103 (1).

(R. 001356).

In determining whether an agencys decision is arbitrary or capricious, the court

must determine whether a reasonable person, considering all of the evidence in the

record, would fairly be compelled to reach a different conclusion.41

Leaving aside the fact that there is no ethical standard of conduct contained in

C.R.S. section 24-9-105, the undisputed evidence shows that the Secretarys use of the

discretionary fund was entirely proper. The Secretary used $1,278.90 of discretionary

funds to travel to Sarasota, Florida (airfare, luggage, three nights of lodging, and meals)

to attend and serve as an expert panelist in an election-law seminar and Continuing Legal

Education (CLE) program sponsored by the Republican National Lawyers Association

(RNLA). (R. 001158). As the states Chief Election Official, it was entirely proper for

the Secretary to attend the election-law CLE. The fact that the Colorado Supreme Court

authorized CLE credit for the program alone is evidence of the value of the program,

especially to an elections administrator.

41Ramseyer v. Colo. Dept. of Soc. Servs, 895 P.2d 1188 (Colo. App. 1995).


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At the conference itself, the Secretary participated on a panel entitled The

Department of Justice, the Role of the States, and Voter ID. Participants included other

governmental and former government officials, including the chair of a state election

commission and a former U.S. Department of Justice trial attorney specializing in voting

rights. (R. 001177).

And the Secretary attended other panels, including:

Voting Before Election Day: Military, Overseas, Absentee, and Early Voting; Poll Closing and Opening; Provisional Ballots; and After Election Day: Recounts and Contests.

These panels and sessions were taught by leading legal practitioners and officials,

including:

a former state governor; a sitting state attorney general; a sitting secretary of state; legal counsel to governors; high-ranking former military commanders; a state assistant attorney; a county commissioner; attorneys for a presidential and other national campaigns and political

organizations; and

leading campaign election-law attorneys from across the nation.(R. 001175-001186; 6/7/13 Hearing, Vol. II, pg. 364, ll. 1-8).

Meeting and learning from these national election-law leaders is both relevant and

useful to performing the official duties of Colorado Secretary of State.

Moreover, the Secretary is an attorney. To keep his law license current, he must

earn 45 credit hours of CLEs every three years. The Department has a long-standing

policy, pre-dating Secretary Gessler, of paying for its lawyer-employees CLEs. The

Department has the policy because it recognizes the immense benefit of having attorneys


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on its staff when the Department must deal with a steady stream of legal issues. (R.

6/7/13 Hearing, Vol. II, pg. 255-259, ll. 17-23, 1-7).

The Colorado Supreme Courts Board of Continuing Legal and Judicial Education

accredited for CLE credit the three-day RNLA election-law seminar. (R.001158). This

means that the Supreme Court board found that the RNLA national election-law seminar

was an educational activity which has as itsprimary objectivethe increase of

professional competence of registered attorneys and judges and it was an organized

activity dealing with subject matter directly related to the practice of law or the

performance of judicial duties.

42

In other words, the Colorado Supreme Courts board

looked beyond the RNLAs name and saw the clear educational benefit to Colorado

lawyers who attended the RNLAs election-law seminar.

Department of State employees, including the Chief of Staff and the Chief

Financial Officer, also concluded that it would be entirely appropriate for Colorados

Chief Election Official to attend a Supreme-Court accredited election-law seminar. At the

hearing, the Chief of Staff, Gary Zimmerman, offered the following testimony about his

approval of the expenditures:

Q. Have you ever seen expenditures made by the Secretary that causedany concern in your mind that you shouldnt be using State funds to do X,Y or Z?

A. No. (R. 6/7/13 Hearing, Vol. II, pg. 271, ll. 4-7).

The Departments Chief Financial Officer, Heather Lizotte, offered similar testimony:

Q. As the gatekeeper, part of your function when you see something that isamiss, you call it out, right?

42Regulation 103, Board of Continuing Legal and Judicial Education,http://www.coloradosupremecourt.com/pdfs/CLE/Rules.pdf (last visited November 2,2013) (emphasis added).


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A. Absolutely,

Q. And you dont let things slide or you could lose your job; is thatcorrect?

A. Thats correct.

Q. With any of these expenditures that you have been questions about, didyou see anything amiss with the Secretary of State Gesslers request fordiscretionary fund money?

A. No, I did not. (R. 6/7/13 Hearing, Vol. II, pg. 203-4, ll. 18-25, 1-4).

Furthermore, state officials outside of the Secretary of States office never questioned the

use of discretionary funds. Significantly, the state auditor assigned to the matter, Robert

Jaros, found no fault with the expenditure. He testified as follows:

Q. Are you familiar with the allegations in this particular case?

A. Im familiar with the entries we talked about.

Q. Well, let me throw out to you the notion thatfirst of all, you nevermade efforts to ever to recoup for the State of Colorado any money in thediscretionary fund used by Scott Gessler? You agree with that?

A. Thats correct. (R. 6/7/13 Hearing, Vol. I, pg. 69, ll.7-16).

Next, the IECs own investigator, Ellis Armistead, found the Secretarys use of the

discretionary fund was consistent with prior practices of other Secretaries of State.

Specifically, he testified as follows:

Q. And the custom, practice and policy of every prior Secretary that youhad any information on was to use the discretionary fund within their owndiscretion as they see fit. Do you agree that this seems to be the practice?

A. It seems to be. Yes. (R. 6/7/13 Hearing, Vol. I, pg. 48, ll. 7-12).

Also, the former Deputy Secretary of State William Hobbs confirmed that the Secretarys

use was appropriate. He testified as follows:


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Q. In 12 years as Deputy Secretary of State you see the allegations here, didScott Gessler do anything in your mind that was inappropriate use of thediscretionary fund?

A. No. (R. 6/7/13 Hearing, Vol. I, pg. 138, ll. 1-5).

Finally, the Secretary of State himself testified to the clear benefits to his office for his

attendance and participation in the RNLA election-law seminar, for which the Secretary

served as an expert panelist, from which the Secretary learned a great deal about the

federal and other states election laws and practices, and for which the state did not have

to pay for the Secretarys attendance. (R. 6/7/13 Hearing, Vol. II, pg. 359-361, ll. 25, 1-

25, 1-23).

In contrast to the testimony provided by the Chief of Staff, the Chief Financial

Officer, the State Auditor, the IECs own investigator, the former Deputy Secretary of

State, and the Secretary of State himself, the IEC heard no evidenceto support any

allegations of an improper use of discretionary funds.

The standard of review applicable here requires a court to determine whether a

reasonable person, considering all of the evidence in the record, would fairly be

compelled to reach a different conclusion. Here, six people testified to the reasonableness

of the Secretarys use of funds. And not a single person testified to the contrary. A

reasonable person, after reviewing the evidence on the record could never reach the same

conclusion as the IEC for the simple reason that allof the evidence pointed in one

direction: the Secretarys reasonable use of discretionary funds. As such, the Court

should vacate the IECs finding alleging that the Secretarys attendance at the election-

law CLE was an improper use of the discretionary fund.

B. The $117 expenditure was not a gift; it was a valid use of funds for statebusiness, regardless of the timing of receipts.


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The Secretary requested $117.99 in fiscal year 2011-2012 discretionary funds for

end-of-year reimbursement, submitting a general memorandum in lieu of receipts, but for

which the Secretary subsequently provided a specific breakdown of $616 in

unreimbursed expenses. (R. 001141-42). For the same reason as the election-law CLE

expenditure described above, the $117 expenditure was a valid use of monies in the

discretionary fund.

Again, the IEC found a breach of the public trust, stating:

Secretary Gesslers acceptance of reimbursement of the balance of the

discretionary account without any documentation or detail of expensesincurred, violated the ethical standard of conduct contained in C.R.S.section 24-9-105 in that such reimbursement was not in pursuance ofofficial business but was personal in nature. By so doing, SecretaryGessler breached the public trust for private gain in violation of C.R.S.section 24-18-103(1)

43

The IECs finding is both arbitrary and capricious. There is no ethical standard of

conduct contained in C.R.S. section 24-9-105. The portion of the law cited by the

Commission states:

(1) Beginning with the fiscal year commencing July 1, 1985, and for eachfiscal year thereafter, subject to annual appropriation by the generalassembly, there is hereby available the following amounts for expenditurein pursuance of official business as each elected official sees fit:(d) Secretary of State, Five thousand dollars.

The Commission then found:

Secretary Gesslers acceptance of reimbursement of the balance of thediscretionary account without any documentation or detail of expensesincurred, violated the ethical standard of conduct contained in C.R.S.section 24-9-105 in that such reimbursement was not in pursuance ofofficial business but was personal in nature.

43(R. 001356).


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Again, the statute does not create a duty, establish elements of liability, or set forth

standards of conduct.

But even if there was, the Secretarys use was entirely proper. The Secretary

documented over $600 of expenses incurred conducting official business, and the

Secretarys memo adequately demonstrates official business. As such, the withdrawal of

the remaining $117 from the discretionary fund was precisely the type of activity for

which the fund was created. For example, the Secretarys expenditure included:

Cellular phone service. The Secretary makes state-related phone calls on hiscellular phone on a daily basis. The cost for basic cellular service is over $100 per

month, which easily exceeds $117.99 in undocumented expenses for an entire

year. But the Secretary has never requested reimbursement for this cost.

Vehicle Miles. Additionally, the Secretary often uses his personal vehicle totravel to events that are properly characterized as official business. But his

practice has been to only seek mileage reimbursement for long trips, usually

beyond Colorados Front Range. Below is a chart showing unreimbursed mileage

expenses for fiscal year 2011-2012:

FY 11/12$0.50 per mil e per State for FY

11/12

Date Destination (some are round trips ) Purpose for Travel Miles Total7/7/11 6840 S. University Blvd. Centennial South Metro Chamber Meeting - Speaking 27 $13.50

7/18/11 12484 E. Weaver Place, Centennial Citizenship Ceremony 30 $15.008/17/11 200 W. Oak Street, Ft. Collins County Clerks Board Meeting 130 $65.008/26/11 Boulder Steve Tebo Lunch 60 $30.00

8/26/11 Pueblo Pueblo Chamber Legislative BBQ 230 $115.00

8/30/11 PuebloDenver Rustler's Trip - Was not able to take thebus 230 $115.00

9/15/11 6903 Wadsworth Blvd. Arvada Independence of Mexico Event 26 $13.0010/10/11 2255 East Evans Ave. Meet with Dean Katz 16 $8.0010/21/11 5830 County Road 20, Frederick Business Owners Breakfast 62 $31.0011/4/11 Colorado Springs Colorado Springs Chamber Reception/Dinner 142 $71.00

11/14/11 29th and Welton Corky Kyle Radio Interview 1 $0.5011/15/11 13300 W. 6th Avenue W. Chamber Elected Officials Reception 24 $12.00

2/3/12 Boulder to Greeley Steve Moreno and Sean Conway Meetings $0.00


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4/4/12 101 Monroe Street Daniels Fund Interviews 8 $4.004/20/12 Pueblo Pueblo Business Owners Building 230 $115.004/30/12 101 Monroe Street Daniels Fund Video Taping 8 $4.005/11/12 101 Monroe Street Daniels Fund Non-Profit Lunch 8 $4.00

1232 $616.00

(R. 011141).

Any reasonable person would recognize that reimbursement is proper for a cell

phone used to make and receive official calls, because making and receiving telephone

calls to discuss Secretary of State business can be reasonably viewed as official

business. And any reasonable person would recognize that mileage reimbursement is

proper for official events such as a County Clerk board meeting (on August 17) a

citizenship ceremony (on July 18), Chamber of Commerce events (July 7, August 26, and

November 4, November 17, April 20), because attending such meetings as the Secretary

of State is official business. It should be noted that meeting with chambers of

commerce is entirely proper, because in addition to election duties the Secretary of State

has substantial regulatory duties involving businesses. For example, he registers all

business in the state of Colorado, handles all secured lien filings, regulates non-profits,

licenses non-profit gaming involving bingos and raffles, and licenses all notaries public.

As with the other questioned expenditure, there was ample testimony at the

hearing confirming this allowable use. And again, there was no evidencedisputing the

allowable use. The State Controllers office even issued a memorandum in lieu of

receipts is generally permissible. (R. 001138-39).The State Controller also testified that

the Department of States new receipt policy which prospectively required more did not

take effect until after the Secretary sought this reimbursement. (R. 6/7/13 Hearing, Vol. I,

pg. 61, ll. 3-21). Of note, the State Controller testified that he and his office were fully

aware of these expenditures, it was his offices job to take action if the expenditures were


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inappropriate, and his office took no action against the Secretary. (R. 6/7/13 Hearing,

Vol. I, pg. 68, ll. 7-12). Also, the Commissions own investigator testified that the

Secretary use of funds were in line with past practices of prior Secretaries of State.

Specifically, Mr. Armistead testified as follows:

Q. And Natalie Meyer is the secretary who allegedly took the $5000 forher own income and submitted a W-2 for it; is that correct?

A. Correct.

(R. Disc 3, Vol. I, pg. 45, ll. 15-18; see also, R. Disc 3, Vol. I, pg 47, ll. 2-5). He further

recounted other uses of the discretionary funds stating:

Q. Allright. Do you recall getting information that somebody used thediscretionary fund some secretary used it for cocktail receptions forcounty clerks. Do you recall getting that information?

A. Yes.

Q. Do you recall who the secretary was that allegedly did that?

A. It was Ms. Davidson.

Q. You had in your report that some prior secretary used the discretionaryfund for personal clothing. Is that correct?

A. Yes.

Q. Do you recall who that secretary was?

A. He didnt specify.

Q. Somebody used prior secretary used the discretionary fund foroverseas travel. Do you know who that was?

A. I believe it was Secretary Buescher.

(R. 6/7/13 Hearing, Vol. I, pg. 47, ll. 6-24).

In sum, it would be impossible for the reasonable man to review the evidence on

the record and reach the same conclusion as the IEC because all of the evidencebefore


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the IEC supported an allowable use. Thus, the IECs decision was arbitrary and

capricious.

3. The IEC violated the Secretarys right to due process in several ways: it

applied an unconstitutionally vague standard; refused to provide notice ofcharges prohibited the Secretary from obtaining and introducing evidence;

allowed heavily biased commissioners to participate in the proceedings; and

served as investigator, prosecutor and judge.

A. The phrase other standards of conduct is unconstitutionally vague.Amendment 41 and the IECs enabling statute are unconstitutionally vague, both

as applied in this case and on their face, because they never define the other standards of

conduct over which the IEC has jurisdiction. The vagueness doctrine rests on the

fundamental due-process principle that a law is unconstitutional if its prohibitions are not

clearly defined.

Well-established United States Supreme Court jurisprudence holds that vague

laws offend important values: first, because we assume individuals can control their

conduct, we insist that laws give a person of ordinary intelligence a reasonable

opportunity to know what is prohibited, so that he or she may act accordingly;44second,

to prevent arbitrary and discriminatory enforcement, laws must provide explicit standards

for those who apply them.45

Courts more-strictly enforce the vagueness doctrine when a

statute creates penalties.46 When a law threatens to inhibit the exercise of

constitutionally protected rights, such as rights of free speech and association under the

First Amendment, courts must apply the most stringent vagueness standard.47

44Grayned v. City of Rockford, 408 U. S. 104 (1972).

45Id.; see also Barker v. State of Fla. Commn on Ethics, 654 So. 2d 646 (Fla. 3d Dist.1995).46

Karlin v. Foust, 188 F. 3d 446, 458 (7th Cir. 1999).47Id.


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The portion of Amendment 41 that creates the IEC reads as follows:

Section 5. Independent ethics commission.

(1) There is hereby created an independent ethics commission to be

composed of five members. The purpose of the independent ethicscommission shall be to hear complaints, issue findings, and assesspenalties, and also to issue advisory opinions, on ethics issues arisingunder this article and under any other standards of conduct and reportingrequirements as provided by law. The independent ethics commissionshall have authority to adopt such reasonable rules as may be necessary forthe purpose of administering and enforcing the provisions of this articleand any other standards of conduct and reporting requirements asprovided by law.The general assembly shall appropriate reasonable andnecessary funds to cover staff and administrative expenses to allow theindependent ethics commission to carry out its duties pursuant to this

article. Members of the commission shall receive no compensation fortheir services on the commission.48

Similarly, the IECs enabling statute reads:

24-18.5-101. Independent ethics commission - establishment -

membership - subpoena power definitions.

(4) In accordance with the provisions of section 5 of article XXIX, thepowers and duties of the commission shall be as follows:

(a) To hear complaints, issue findings, and assess penalties on ethicsissues arising under article XXIX and other standards of conduct andreporting requirements as provided by law; and

(b) (I) To issue advisory opinions and letter rulings on ethics issues arisingunder article XXIX and other standards of conduct and reportingrequirements as provided by law.49

The Court should strike the language italicized above in both Amendment 41 and the

IECs enabling statute for vagueness because neither provide a definition of other

standards of conduct. As such, no elected official can reasonably know how to conduct

himself or herself to avoid IEC prosecution.

48Colo. Const art. XXIX, (5) (1), (emphasis supplied).

49C.R.S. 24-18.5-101 (4) (emphasis added).


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As mentioned above, the United States Supreme Court has held repeatedly that

because we assume individuals can control their conduct, we insist that laws give a

person of ordinary intelligence a reasonable opportunity to know what is prohibited, so

that he or she may act accordingly. Vague laws will trap the innocent by not offering fair

warning.50

This is exactly what happened here; the laws creating the IECs jurisdiction are so

vague that Secretary and other elected officials cannot know what is prohibited. Indeed,

in this case, the Secretary received advice from his staff and a past Deputy Secretary of

State regarding use of his discretionary fund. (R. 01262-63). Additionally, the State

Auditor, (R. 6/7/13 Hearing, Vol. I, pgs. 69-70, ll. 12-25, 1-5), and the IECs own

investigator, (R. 6/7/13 Hearing, Vol. I, pgs. 44-45, ll. 23-25, 1), deemed the Secretarys

expenditures to be legitimate uses of the funds.

Notwithstanding, the Secretary following office protocol and precedent of other

Secretaries of State, the IEC comes in and wields its vague legal authority to find

violations. The very situation the U.S. Supreme Court was concerned about, trapping the

innocent by not offering fair warning, happened here. For this reason alone, the Court

should strike the vague provisions of Amendment 41 and the IECs enabling statute.

The United States Supreme Court has also held that to prevent arbitrary and

discriminatory enforcement, laws must provide explicit standards for those who apply

them.51Here, neither Amendment 41 nor the IECs enabling statute provide explicit

standards for the IEC. Rather, the IEC is free to assert jurisdiction and find violations of

50Grayned v. City of Rockford, 408 U. S. 104 (1972).51

Id.


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literally any law. Voters could not have intended to create such an ethics commission

with such wide-ranging power.

Additionally, courts more-strictly enforce the vagueness doctrine when a statute

creates penalties.52Courts also strictly apply the vagueness standard when a law threatens

to inhibit the exercise of constitutionally protected rights, such as rights of free speech

and association under the First Amendment.53Here, the law creating the IEC allows the

commission to find wrongdoing and doublepenalize an elected official. Also, as

explained in greater detail below, the IEC used its vague authority to violate the

Secretarys First Amendment rights of Speech and Assembly. As such, this Court must

strictly enforce the vagueness doctrine and strike the other standards of conduct

language from the constitution and the statute.

Put plainly, to hold a hearing based on unspecified and vague other standards of

conduct is unconscionable. Indeed, it was impossible for the Secretary to defend himself

against some other standard[] of conduct when he did not even know what that meant.

For this reason, Colorado Supreme Court has made it clear that extending jurisdiction to

unspecified conduct is unconstitutional:

A penal statute must define an offense with sufficient clarity to permitordinary people to understand what conduct is prohibited and in suchmanner that does not encourage arbitrary and discriminatory enforcementof the statute. Thus, the due process clauses of the federal and Coloradoconstitutions require articulation of definite and precise standards capableof fair application by judges, juries, police and prosecutors. Asemphasized in Kolender, [w]here the legislature fails to provide suchminimal guidelines, a criminal statute may permit a standardless sweep[that] allows policemen, prosecutors, and juries to pursue their personalpredilections.54

52Karlin v. Foust, 188 F. 3d 446, 458 (7th Cir. 1999).53

Id.54See Norman, 703 P.2d at 1266 (internal citations omitted).


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The Tenth Circuit has held that this same vagueness and fair-notice concern also

applies to civil agencies:

In the context of agency proceedings, an agency may fail to givesufficient fair notice to justify a penalty if the regulation [at issue] is soambiguous that a regulated party cannot be expected to arrive at thecorrect interpretation using standard tools of legal interpretation, musttherefore look to the agency for guidance, and the agency failed toarticulate its interpretation before imposing a penalty.55

In the instant case, Amendment 41 and the IECs statute are vague, which forced

the Secretary to look to the IEC for guidance. But the IEC failed to articulate its

interpretation before fining the Secretary. Again, the current case represents the exact

situation that the U.S. Supreme Court, Colorado Supreme Court, and Tenth Circuit

sought to protect against.

This Court would not be the first to strike down the enabling statute of a state

ethics commission for vagueness. Such statutes are particularly egregious offenders.

Indeed, courts have consistently struck down vague enabling statutes, regardless of

whether a covered official may seek an advisory opinion.56The Florida Supreme Court

has correctly stated that the public official must be able to gauge his or her actions against

a specific code of conduct, not a loosely worded statement of public policy, no matter

how desirable the goal."57Precision is particularly important in the context of ethical

55ExcelCorp.v.U.S.Dep'tofAgri., 397 F.3d 1285, 1297 (10th Cir. 2005) (quoting 1stCircuit case).56DAlemberte v. Anderson,349 So. 2d 164 (Fla. 1977); see also Dehne v. Avanino, 219F. Supp. 1096 (D. Nev. 2001) (Nevada ethics commission statute found to be vague andin violation of due process).57State v. Rou, 366 So.2d 385 (Fla. 1978).


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violations, because the penalties at stake include loss of livelihood and professional

reputation, which, though non-criminal, are nonetheless significant and substantial.58

B. Despite the Secretarys repeated requests, the IEC never identified thecharges; the IEC listed 10 legally inefficient statements that may apply,said the charges were subject to change after the hearing, and stated thatadditional charges might apply.

The Secretary, on numerous occasions, asked the IEC to identify the charges

against him; it never did. Rather, the commission listed five statutes and five regulations

that may apply. (R. 000881-884). Confusing matters further, the IEC went on to say

that these five statutes and five regulations were subject to change afterevidence was

heard, and that the IEC may even add additional standards of conduct (R. 000881) not

contained in any complaint or other document.

On December 20, 2012, the Secretary filed with the Commission a motion to

dismiss. In the motion he argued that he did not receive fair notice:

CREWs Complaint alleges that the Secretary violated three criminalstatutes, and only three criminal statutes. As noted above, the Commissiondoes not have jurisdiction over criminal statutes. At the same time, theCommission does not have jurisdiction over some unspecified otherstandards of conduct that are separate from the criminal allegations. Tohold a hearing based on unspecified and vague other standards ofconduct is unconscionable. Indeed, it is impossible for the Secretary todefend himself against some other standard[s] of conduct when he doesnot even know what that means.

(R. 000215).

After the IEC denied the motion and refused to define the standards, the Secretary

renewed the argument before this Court on February 7, 2013. During the preliminary-

58

D'Alemberte v. Anderson, 349 So. 2d 164, 168 (Fla. 1977); see alsoBlackburn v. StateComm'n on Ethics, 589 So. 2d 431 (Fla. App. 1991).


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injunction hearing, the IECs own counsel admitted that the IEC had no jurisdiction over

criminal sanctions and couldnt define ethics issues:

Ms. Benner Freimann: [f]irst, it [ethics] isnt as broad as Mr. Lane argues.

The language is specifically caveated to ethics issues arising under otherstandards of conduct of reporting requirements. The Commission isntallowed to go after criminal sanctions or anything other than ethics issuesthat arise

The Court: Well, whatshas anyone defined ethics issues?

Ms. Brenner Freimann: No. No, Your Honor. But thatthetheauthority to interpret that is vested with the Ethics Commission.59

Even the Court seemed concerned about the Secretarys due-process rights. At the

Preliminary Injunction hearing, the Court stated:

What I hear the Commission saying is that they are very sensitive to thein this case, Mr. Gesslers due process rights. Theyre certainly going tolet him know what it is he is alleged to havewhat standard of conduct heis alleged to have violated if, in fact, it gets that way.60

Despite these assurances to the Court, the IEC did not define the standards. In the

Pre-Hearing Order, the IEC listed citations to numerous statutes and regulations,

including 1 CCR 101, which are the State Fiscal Rules in their entirety. The Pre-

Hearing Order stated that this exhaustive list of citations may apply. The Pre-Hearing

Order did not contain factual allegations putting the Secretary on notice of how his

conduct allegedly violated any of the numerous statutes and regulations cited.

Moreover, the IEC stated that the list of statutes and regulations was subject to change

depending on the evidence presented, and the arguments made, at the hearing in this

matter. (R. 000881).

59See Exhibit A, Transcript of Hearing, 2/7/13, pg. 66, ll. 2-17.

60See Exhibit A, Transcript of Hearing, 2/7/13, pg. 84, ll. 15-21.


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The IECs procedure is not only unconstitutional, it is completely inexcusable for

a supposedly impartial adjudicative body. Simply put, a violation of everything is

notice of nothing. The Secretary had no realistic way to defend himself against the

evolving and unconstitutional procedures used by the Commission. The IECs statements

that other charges may apply and that the standards could change after the evidence is

heard are the very essence of vagueness. The Court should not allow the IEC to function

like this in this case or future cases.

Following the June 7, 2013, hearing, the IEC issued its Findings of Fact and

Conclusions of Law. (R. 001352-58). The IEC ruled that the Secretary violated the

discretionary fund statute that the IEC incorrectly labeled an ethical standard, and

C.R.S. 24-18-103(1), a policy statement that does not create liability. Therefore, not

until afterthe June 7, 2013, hearing on IEC Case No. 12-07 did the Secretary first learn

of how his conduct allegedly violated these myriad statutes and regulations. In other

words, the Secretary could not properly defend himself at his hearing because he did not

know the legal allegations against which he needed to defend.

The IECs moving target approach to prosecuting an Amendment 41 complaint

is impermissible.61

And the IECs citation to an exhaustive list of statutes, including the

State Fiscal Rules in their entirety, does not satisfy the duty to give fair notice of charges

under principles of due process. Finally, the IECs failure to make factual allegations

advising the Secretary of how his conduct supposedly violated any rules of law, even at

the hearing itself, was a further violation of the requirements of due process.62

61In re Ruffalo, 390 U. S. 544 (1968).62Montgomery v. City of Ardmore, 365 F. 3d 926 (10th Cir. 2004) (party is entitled to

notice of charges against him, including an explanation of the evidence against him).


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C. The IEC denied the Secretary the basic right to conduct discovery or presentevidence in his defense.

The IEC failed to guarantee the Secretarys constitutional right to discovery and

confrontation of witnesses. This violates the Sixth Amendments Confrontation Clause,

which provides that, [i]n all criminal prosecutions, the accused shall enjoy the right . . .

to be confronted with the witnesses against him.63The United States Supreme Court

has held that this bedrock procedural guarantee applies to both federal and state

prosecutions.64The IEC is not bound by the Colorado Rules of Evidence or any other

definite standard.65In other words, the IEC could hear constitutionally impermissible

evidence, such as hearsay evidence not subject to cross-examination. Yet the

Confrontation Clause requires that hearsay (out-of-court) statements be subjected to

testing in the crucible of cross-examination.66

While the Sixth Amendment does not

typically apply to civil proceedings, the Amendments proscriptions are relevant here

because the IEC exercised jurisdiction over criminal statutes. Given the Commissions

usurpation of the role of criminal courts and the imposition of a monetary penalty, it

cannot ignore procedural and constitutional safeguards otherwise afforded to the accused.

Perhaps most egregious was the Commissions decision to disallow the Secretary

from calling Kevin Collins, an independent, third party expert in governmental

accounting who concluded that the uses of all the funds at issue were completely proper

(R. 6/7/13 Hearing, pgs. 243-254). The Secretary sought to call this witness to provide

63See Crawford v. Washington, 541 U.S. 36, 42 (2004).64Id.65IEC Rule 8(D) (The Colorado Rules of Evidence shall provide guidance for all

hearings, but may not be strictly enforced. The IEC, at its discretion, may receive any

evidence at a hearing that it deems relevant or helpful to the inquiry at hand as

allowed under Colorado law.).66Crawford, 541 U.S. at 61.


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testimony on what typically constitutes official business in both past and current

practice and on past current accounting practices. The IECs decision to disallow this

witness directly violated the Secretarys right to present a defense. This decision

evidences the Commissions desire to reach a conclusion a reasonable person would not

otherwise come to if the evidence were viewed independently and objectively. And the

decision was harmful to the Secretarys case. He had no way to defend his own or his

offices accounting practices because he wasnt allowed to offer evidence in support. The

IECs conduct here was not harmless error; it was a serious violation of the Secretarys

due process rights.

At all turns the IEC limited the Secretarys efforts to provide testimony

concerning the proper use of discretionary accounts. The Secretary was not allowed to

call former Secretaries of State. (R. 000945 and 001384). He was not allowed to call

current office holders who have their own discretionary accounts. (R. 000945 and

001384). In short, he was not afforded due process but rather only the process the IEC

was willing to give him to reach the IECs desired result: a penalty against the Secretary.

D. Two biased commissioners refused to recuse themselves despite serious,documented biases against the Secretary.

The standard for recusal of judges from courts has been set forth by the Colorado

Supreme Court and is strictly enforced. This standard provides that, if an attorney for

one of the litigants signs an affidavit alleging conduct or statements which, if true, show

bias or the appearance of bias on the part of the judge, it is an abuse of discretion if that

judge does not withdraw from the case.67Even if the judge believes the statements in the

67Goebel v. Benton, 830 P.2d 995, 998-99 (Colo. 1992) (emphasis added).


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affidavit are false, the judge should not pass judgment on the truth or falsity of the facts

alleged, but only on the adequacy of the motion as a matter of law.68

The State Administrative Procedure Act provides a similar procedure applicable

to administrative hearings before administrative law judges. Upon the filing of a timely

and sufficient affidavit of personal bias of a judge, hearing office or member of the

agency, such motion must be ruled on forthwith as part of the record of the case.69The

judge accused of bias may or may not recuse himself, but the proceeding must continue

in a manner that no substantial prejudice to any party results therefrom. Id.

The Colorado Administrative Code provides that an ALJ mustdisqualify himself

in any proceeding in which the judges impartiality might reasonably be questioned.70 A

judges impartiality is questioned in instances where the judge had a personal bias or

prejudice concerning the proceeding. These standards apply to the IEC because, in the

IEC proceeding, the Secretary filed several recusal motions based on verified affidavits

alleging facts showing bias of two of the Commissioners.

The affidavits revealed that Commissioner Marshall, a former Democratic state

representative, has had prior interactions with the Secretary that evidence her appearance

of bias against him. Before Commissioner Marshall joined the Commission, she has

68Id.

69C.R.S. 24-4-105(3).701 Colo. Code Regs. 104-2(1)(1)(a). provides:

An administrative law judge shall disqualifyhimself or herself in anyproceeding in which the judges impartiality might reasonably bequestioned, including but not limited to instances where (a) the judge has apersonal bias or prejudice concerning the proceeding.1 Colo. Code Regs. 104-2(C)(1)(a) (emphasis added).


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questioned the Secretarys motives in unrelated legal proceedings before this Court and

stated that she was going to keep an eye on the Secretary. (R. 000777-78).

Commissioner Marshall, who did not join the Commission until January 2013 and

had not participated in oral argument on -- and presumably had not read -- the Secretarys

motion to dismiss nonetheless rushed to vote against the Secretary as her first act on the

Commission. The Secretary submitted to the Commission a motion to recuse

Commissioner Marshall, and she even took the highly unusual step of discussing with the

media the merits of the motion. This, in and of itself requires a reversal, remand and

order for Commissioner Marshall to be excused from any further proceedings.

71

Commissioner Marshall has also donated to the campaign of the 2010 political opponent

of the Secretary. At the hearing on June 13, 2013, Commissioner Marshall even

improperly attempted to politicize the legal issue as to whether the Secretary had

announced any gubernatorial campaign, which had nothing whatsoever to do with IEC

Case No. 12-07. (R. 6/13/13 Hearing, Comments of R. Marshall before deliberations).

Commissioner Grossman, a former Democrat state representative and senator, has

also made campaign contributions to the Secretarys 2010 and 2014 political opponents

or potential political opponents. Moreover, there is evidence that Commissioner

Grossman, then serving as chairman, improperly instructed the Commissions

independent investigator to add to his investigative report, and thus politicize, allegations

surrounding the Secretarys and his familys personal security, following specific and

credible threats of sexual violence against the Secretarys wife and then-four-year-old

daughter. (R. 00917-979). There is also evidence that Commissioner Grossman may

71See Exhibit B, Ligon v. City of New York, Order of 10/31/13 (2

ndCir.).

8/13/2019 Scott Gessler appeal of Ethics Commission sanctions

scott gessler appeal of ethics commission sanctions - opening brief

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