Key Colorado ballot initiatives have corporations spending tens of millions for your vote

The Wilgrass Subdivision in Broomfield. (Photo by Ted Wood/The Story Group)

Millions of dollars from special interests is going to support or fight three policy issues: a battle over how to pay for transportation needs, a makeover in the way the state draws its political boundaries, and a cap on payday loan interest rates.

But far and away the issue pulling in the most money is a ballot measure that would increase nearly fivefold the distance that oil and gas operations can drill from homes and other vulnerable areas like streams: Proposition 112, also known as Initiative 97.

As of Sept. 4, oil and gas companies have kicked in $21 million to an issue committee fighting the initiative so far this year, according to campaign finance reports filed with the Colorado Secretary of State. There are practically no limits on how much money an issue committee can accept or spend. The committee can then use this money to collect signatures, buy media ads and air its views on the TV and radio.

That $21 million is more than twice as much as the other three measures combined have raised. A little more than $9 million has flowed into the issue committees seeking to end partisan gerrymandering, pay for transportation projects and cap payday loan interest rates. And, rounding out the list of high-interest measures on what is going to be a crowded November ballot featuring 13 initiatives, the committees pushing for more K-12 school funding, private property protections and lifting campaign finance limits together netted $742,000 in contributions.

In total, all ballot measure campaigns, including those that failed to make the ballot, have raised $33 million. The majority of that amount, $28 million, has come from businesses and corporations. Individuals have chipped in about $2.7 million.

It’s not unusual for industry to heavily outspend nonprofit organizations or citizen groups, said Robert Duffy, a political scientist at Colorado State University. But, he argued, the practice raises questions about the direct democratic process — a process where voters get to decide key policy questions for themselves. 

When one side has vastly more money to spend, “is that really consistent with notions of direct democracy?” Duffy told The Colorado Independent. “Or does that simply give business and wealthy individuals another way to sort of game the system?”

‘Last-ditch effort’

The fight against Proposition 112, previously known as Initiative 97, is being led by an industry-backed campaign with years of experience successfully blocking proposed regulations. And so far, that group, Protecting Colorado’s Environment, Economy, and Energy Independence, also known as Protect Colorado, has outraised its opponents 30 to one.

Protect Colorado raised $21 million as of Sept. 4, while the issue committee backing the proposed setback regulations, Colorado Rising for Health and Safety, also known as Colorado Rising, has raised $698,000 and spent almost all of it, leaving a $10,000 balance on the books. Protect Colorado has spent $12.6 million and has $8.6 million left to spend.

Proposition 112 would require that oil and gas drilling rigs be placed no closer than 2,500 feet from homes and other buildings like schools. The current setback is 500 feet for homes and 1,000 feet from school buildings. 

“This is really a last-ditch effort to keep the threat at bay,” Anne Lee Foster, a volunteer with Colorado Rising, told The Colorado Independent.

But the industry has a successful history of defeating new regulations and taxes through the initiative process — and spending much more than its rivals to do so.

In 2008, Coloradans for a Stable Economy, a group backed by the oil and gas industry, spent about $12 million to defeat Initiative 58, which would have eliminated the property tax deduction that oil and gas companies claim on their severance taxes.

In 2014, when Protect Colorado first registered with the state, the group spent nearly $11 million opposing a 2,000-foot setback initiative, known as Initiative 88. Coloradans for Safe and Clean Energy, which backed the setbacks, spent about $2 million. Of this amount, $770,000 came from Congressman Jared Polis. Polis later pulled his support for the initiative after reaching a compromise with Gov. John Hickenlooper, who has mostly supported industry during his two terms in office.

Then, in 2016, there was a 2,500-foot setback initiative known as Initiative 78. Protect Colorado spent nearly $16 million opposing it. The backers, Yes for Health And Safety Over Fracking, spent about $521,000. The setback regulations never even made it on the ballot. All this spending helped make 2016 Colorado’s most expensive fight over ballot initiatives on record. Issue committees spent about $88 million that year.

Opponents say this year’s proposed setback regulations would crush the industry, citing a report by the Colorado Oil and Gas Conservation that found it would prohibit drilling across more than half the state. According to a study by Common Sense Policy Roundtable, a conservative-leaning think tank based in Greenwood Village, by 2030, Proposition 112 would cost $26 billion in state GDP, up to $1.1 billion in tax revenue, and up to 147,800 jobs. The estimates in the report use an economic simulation model by Regional Economic Models Incorporated, or REMI. 

Related: Colorado oil and gas industry prepares for battle at the ballot box as production booms

On the other side of the issue, supporters say oil and gas drilling near residential areas and schools is a threat to public health and safety. A mother in Erie said a doctor found high levels of volatile organic compounds released from active oil and gas wells, including benzene and ethylbenzene, in her son’s blood (a top public health official later dismissed the findings). Benzene is a known human carcinogen. An explosion from an abandoned natural gas pipeline killed two men in Firestone last April. And since the explosion, there have been more than a dozen reported fires, leaks and explosions, according to the Colorado Oil and Gas Conservation Commission. There are roughly 55,000 active wells in Colorado.

“There are mothers and grandmothers and teachers and nurses and firefighters that are encountering a crisis at their doorstep,” Foster said. 

Both candidates for Colorado governor, Democrat Jared Polis and Republican Walker Stapleton, oppose the setback measure. So does Gov. Hickenlooper. The state Democratic Party, however, supports the initiative. The state Republican Party opposes it.  

Break down support for the setbacks geographically, and Boulder supporters make up the largest donor group based on location, contributing about $324,000 to increase the setback. Washington, D.C.-based donors come in second. Those supporters gave about $192,000. Top among them was Food & Water Watch, an environmental NGO. The committee raked in more money from individuals than from corporations; of the approximate $700,000 the group raised since the start of the year, more than half came from individuals.

In a news release, Chip Rimer, chairman of Protect Colorado, said, “We are confident that voters see this measure for what it is: an extreme proposal funded by those in Boulder and Washington, D.C., who do not have Coloradans best interests in mind.”

Colorado Rising most of its budget on petition-gathering, which proved to be an arduous task. First, the ballot initiative was challenged in court, but the dismissed in April. Then, Colorado Rising clashed with two of its signature gatherers, one of which the campaign claims was paid by the industry to stop collecting signatures. Meanwhile, signature gatherers faced protests from anti-setback demonstrators urging people not to sign petitions. Demonstrators carried signs that read: “This Petitioner Wants To Ban Fracking In Colorado. So does Vladimir Putin,” and “Save CO Jobs.”

As for Protect Colorado, most of its money came from Texas energy companies, many of which have offices in Colorado. Only one donation, in 2017, came from an individual and that was for $25. Top donors to this group include Anadarko, of Woodlands, Texas, which donated $5.8 million, Noble Energy Inc., of Houston, Texas, which donated $4.5 million, PDC Energy, of Denver, which donated $3.4 million, and Extraction Oil and Gas, of Denver, which donated $2.2 million.

Protect Colorado isn’t just spending that money to fight Proposition 112. It’s also pushing Amendment 74, previously known as Initiative 108, which would amend the state constitution to require property owners to be compensated for any loss in property value caused by government regulations. In other words, should the value of a property owner’s mineral rights be curtailed because of a setback law, that owner could be compensated. Protect Colorado spent over $4 million collecting signatures for Amendment 74. The next largest expense was on pro-industry television ads.

Protect Colorado’s website states Amendment 74 is a way to safeguard “private property from government confiscation.” The issue committee publicly supporting the measure, Committee for Colorado’s Shared Heritage, has raised only $33,800, of that $10,000 came from the Colorado Farm Bureau. There is also a $23,800 in-kind contribution from Pac/West, a communications firm with ties to Protect Colorado.

Environmental advocacy groups worry Amendment 74 would allow oil and gas companies and property owners with mineral rights to sue local governments for environmental regulations.

“This measure goes too far, and the list of unpredictable consequences is long,” said Jessica Goad, the deputy director for Conservation Colorado, in a news release.

Conservation Colorado, an environmental advocacy group, donated more than $2,000 to the issue committee called Save Our Neighborhoods, which is opposing the ballot initiative. In all, groups opposing the initiative have raised about $20,000. The top donor was Recht Kornfeld PC, a legal firm from Denver.

Goad added that oil and gas companies could force local governments to let them drill near hospitals and nursing homes and that noise restrictions, minimum wage laws, and safety codes would be challenged in courts.

“We can’t let property owners sue our governments over any regulation they disagree with.”

Transportation

Traffic congestion on I-25 northbound at 7:00 AM. Photo by John Herrick

Both parties agree more money is needed to help improve transportation infrastructure. This year, about $5 million has poured into committees advocating solutions.

But the two solutions on the ballot are at odds and will likely split votes on the issue.

One, Proposition 110, calls for an increase in the states’ sales and use tax rate by 0.62 percent — from 2.9 percent to 3.52 percent. The other, Prop. 109, proposes issuing bonds without raising taxes. These bonds would instead be paid for with existing revenue in the state budget.  

The committee backing the proposed sales tax increase has so far outraised the tax-free backers. Coloradans for Coloradans raised almost $4.5 million to support the sales tax increase. The group’s largest donors include the Colorado Construction Industry Coalition, a 527 committee that received $345,000 from the Colorado Contractors Association. A 527 committee has practically no contribution limits but cannot tell voters to vote for a certain candidate. Other top donors include the Denver Metro Chamber of Commerce and Associated General Contractors, an association for the state’s commercial building industry.

Fix Our Damn Roads, the group backing the tax-free transportation funding proposal, raised more than $428,000 and received nearly all its money from the Independence Institute, a libertarian think tank headed by Jon Caldara, radio host and former chairman of the Regional Transportation District board.

The sales tax increase would generate about $766 million per year beginning in fiscal year 2019-2020, enough to allow the Department of Transportation to issue up to $6 billion in bonds. The Fix Our Damn Roads proposal would allow CDOT to issue up to $3.5 billion in bonds.

Redistricting

A proposal to change the way Colorado draws and approves district lines for elected officials has drawn no concerted opposition.

Fair Maps Colorado, a bi-partisan group backing an initiative that it says will end partisan gerrymandering, netted $2.1 million so far this year. The two measures are called Amendments Y and Z — one for Congress and the other for the state legislature.

The proposed plan is to give nonpartisan members on a map-making panel more say in the process of drawing district lines. The proposed law change has the backing of Gov. John Hickenlooper. Lawmakers earlier this year voted unanimously to refer the two measures directly onto November’s ballot.

Top Donors:

  • Kent Thiry, a wealthy CEO of the Denver-based kidney dialysis company DaVita, is bankrolling the campaign to draw support for the measures. He donated $600,000 to Fair Maps Colorado (Thiry also gave $219,000 to Fair Districts Colorado, which is also supporting the initiative).
  • Billionaire and Democratic donor Pat Stryker also donated $600,000 to Fair Maps Colorado. (Stryker founded and serves on the board of directors of the Bohemian Foundation, which is among The Independent’s donors.)
  • The Action Now Initiative donated $268,000. According to Governing magazine, this group is funded by John Arnold, a former hedge-fund billionaire who focuses much of his attention and money on pension reform.

Fair Districts Colorado, another issue committee that supports Amendments Y and Z, received a total of $428,000. Top donors include Thiry and Let Colorado Vote, an issue committee.

Your Vote Counts, another group backing the initiative, has received $232,600. The committee’s largest donor is America Votes, a 501(c)4 organization promoting “progressive issues.” The organization falls into the category of dark money donors because it does not have to disclose its supporters.

Fair Maps Colorado has spent more than $1 million on media buys and advertising. The campaign is spreading the money around to a variety of people, firms and polling.

Related: A star-studded campaign launches to end gerrymandering in Colorado. It took a grand bargain to get here.

Payday

So-called payday loans — short-term, small loans — can carry interest rates about ten times that of a credit card when accounting for fees. That’s why a coalition of advocates and financial planners is working to cap the annual percentage interest on these loans at 36 percent.

Like other initiative campaigns, Initiative 126 faced an early challenge in court. A payday lender and his attorneys argued the initiative was misleading and that a fiscal note did not account for financial impacts, namely the closing of payday lending stores. The court dismissed the challenge.

Now, the group backing the initiative, Coloradans to Stop Payday Predatory Lending, has raised more than $1.6 million to get it passed. The top donor is the Sixteen Thirty Fund, a 501(c)(4) social welfare organization based in Washington, D.C. that does not have to disclose its donors. Other top donors include the Center for Responsible Lending, a North Carolina-based nonprofit that studies predatory lending nationally and in Colorado, and the Bell Policy Center, a liberal-leaning Denver-based think tank.

Related: In an effort to protect borrowers, ballot initiative to cap “payday loans” clears legal hurdle

No issue committees appear to be fighting the initiative.

Other measures on the ballot

Other high-profile measures on the ballot this year include one that would boost funding for K-12 schools by raising income taxes on the state’s most wealthy, and another that would alter campaign finance laws.

Great Schools, Thriving Communities, one issue committee backing the school funding initiative, is mostly funded by the teachers’ unions and education advocacy groups. The Colorado Education Association’s Fund for Children and Public Education gave $110,000. Judi Wagner of Littleton gave $100,000. Other individuals chipped in another $64,000.

Great Education Colorado is also backing the initiative. The committee has raised $115,000, mostly from the Great Education Colorado, an education advocacy organization.

A committee called Don’t Turn Colorado Into California is opposing the initiative, though it has not yet raised or spent any money.

Another measure to watch on the November ballot would change campaign finance laws.

The current state limit on donations is $400 for state House and Senate candidates and $1,150 for the statewide offices per election cycle. Amendment 75, previously known as Initiative 173, proposes that if a candidate raises more than $1 million, then any other candidate in that same race can accept donations five times the legal limit.

This is so “so you can raise enough money to compete with the millionaire or billionaire trying to buy the election,” said former state Rep. BJ Nikkel, a Republican from Loveland, and former state Sen. Greg Brophy, a Republican from Wray. Both are supporting the initiative.

The committee helping to support the initiative is called Stop Buying Our Elections. As of Sept. 4, it has not raised any money. The next filing deadline is Sept. 17. 

https://www.coloradoindependent.com/donate/

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