Ethics Roundup 2009

8/3/2019 Ethics Roundup 2009

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The Good, the Bad and the Ugly

2009

Ethics

RoundupEthics Watch


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INTRODUCTION

This is Colorado Ethics Watchs second annual Ethics Roundup, a report thathighlights both the ethical transgressions and new this year the good deeds of stateand local public officials and agencies. Now more than ever, as the nation struggles torecover from a crippling recession and the ethical transgressions of corporate America arebringing down entire industries, there is no room for compromise in the area ofgovernment ethics. Citizens expect and deserve government representation that puts thepublic interest above all else and that operates with transparency and integrity. Throughpublic scrutiny and accountability, Ethics Watch works to advance these goals.

This years report chronicles not only the ethical transgressions, but also the gooddeeds of state and local public officials. Specifically, the report highlights threecategories of public officials: the Good, the Bad, and the Ugly. In our Goodsection, we give accolades to those officials who have taken their own initiative to raisethe bar for ethics by implementing new, stricter measures and cracking down oncorruption. In contrast, our Bad section highlights the lamentable conduct of officialswho have abused the public trust, grossly mishandled taxpayer resources,unapologetically shirked disclosure requirements or otherwise breached ethical standardsof conduct. Finally, the Ugly section features conduct that demonstrated a lapse ofethical judgment by public officials who violated the trust of the citizens they serve.

Ethics Roundup 2009 is by no means exhaustive. Colorado Ethics Watch ismindful that countless other public officials may have committed similar and perhapsmore egregious or virtuous acts. In addition,Ethics Roundup 2009 only names publicofficials who are currently in office; therefore, officials whose conduct has incited ethicsscrutiny in the past are not included in this report.

The purpose of this report is not just to bring attention to the conduct of thosenamed, but also to increase public awareness about the subject of government ethicsgenerally. It is our hope that greater awareness will encourage The Good to forgeahead, The Bad to change course, and The Ugly to shape up.

METHODOLOGY

To create this report, Ethics Watch reviewed Colorado Secretary of Statecampaign finance reports, state audits, emails, news articles and personal financial andtravel disclosure forms. Ethics Watch then analyzed that information to determinewhether the information discovered suggested that a public officials conduct violated

any state laws, regulations or ethics rules. In many cases, Ethics Watch has filed at leastone legal action.

The public officials and departments identified in the report are listed according tothe level in federal, state or local government. For example, U.S. Secretary of InteriorKen Salazar is listed first in his category followed by state Representatives Cindy Acreeand Mike May, who are followed by state employee Erin Toll and then two city councilmembers.


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THE GOOD

KEN SALAZAR, U.S. INTERIOR SECRETARY

Ken Salazar, previously a United States Senator from Colorado, was confirmed as

the United States Secretary of the Interior in January 2009. As his first order of business,Sec. Salazar initiated efforts to clean up the Minerals Management Service (MMS)division by implementing sweeping ethics reform and by disciplining or removing MMSemployees tied to past misconduct.

Cleaning Up Minerals Management Service

In September 2008, the U.S. Interior Department released a report that chargedseveral employees of the departments Minerals Management Service division with ethicsviolations, which included accepting gifts from energy-industry executives and partakingin promiscuity and substance abuse with those executives.

1These gifts and relationships

constituted an unethical conflict of interest, since the MMS is tasked with managing ournations naturalgas, oil and other mineral resources, including calculating and collectingfees from energy companies who lease mineral rights from the U.S. government.2 Sincethe release of the report, many employees have been dismissed or punished.3

Sec. Salazar has now pledged to review the scandal with MMS employees and todecide what other steps need to be taken, including a possible restructuring of the royaltyprogram overseen by MMS.4 In January 2009, Sec. Salazar ordered a review of theMMS royalty collection program and is working with the U.S. Department of Justice toconsider re-opening investigations of possible criminal conduct by MMS employees.

5

The review will include an overhaul of the Interior Departments ethics rules; an effortspearheaded by Sec. Salazars chief of staff, Tom Strickland.

6As a first step, Sec.

Salazar updated the Interior Departments ethics guidelines to mirror President Obamasexecutive order banning executive personnel from accepting gifts from lobbyists and tocomply with enhanced bans against revolving door conflicts of interest.

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Sec. Salazar has further pledged to investigate why Bush administrationprosecutors in the public integrity unit did not pursue criminal charges against certain

1 Memorandum Re: OIG Investigations of MMS Employees, from Earl E. Devaney, Inspector General, toSecretary Kempthorne, Sept. 9, 2009, at pp. 2-3, attaching Office of Inspector General, Investigative ReportMMS Oil Marketing Group Lakewood, August 19, 2008 (Exhibit 1).2

Investigative Report, id. note 1 at pp. 1, 5-7.3 Ernest Luning, Salazar Travels to Lakewood Thursday to announce strict ethics policy reform, TheColorado Independent, January 28, 2009 (Exhibit 2).4Id.; Gargi Chakrabarty, Salazar cites Lakewood scandal in launching ethics review at Interior,RockyMountain News, January 30, 2009 (Exhibit 3).5 Chakrabarty, Salazar cites Lakewood scandal in launching ethics review at Interior, id. note 4 (Exhibit 3).6 Staff Reporter, Salazar vows to clean up Minerals Management Service, Interior Department,DenverBusiness Journal, January 29, 2009 (Exhibit 4).7 Press Release, Department of the Interior, Secretary Salazar Outlines High Ethical Standards for InteriorDepartment in Memo to All Employees, January 26, 2009 (Exhibit 5).


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employees.8 Sec. Salazar is working to ensure that reforms at the MMS will eliminateconflicts of interest that have troubled the agency for years and to protect employees whoblow the whistle on misconduct.

9

Sec. Salazar has stated that he will demand a higher level of scrutiny of oil

companies that do business with the Interior Department to ensure that all relationshipsare transparent and any kickbacks are eliminated.10 During a White House briefing, Sec.Salazar said: Those who work for the government should be proud of their service to theAmerican people. We will work to reform the Department of the Interior, restore thepublics trust and restore the high levels of ethics and accountability that the Americanpeople deserve.11

8 Miles Moffeit, New scrutiny for Interior unit, The Denver Post, January 30, 2009 (Exhibit 6).9 Gregg Carlstrom, Salazar takes quick action, but tough decisions lie ahead, FederalTimes.com, May 5,2009 (Exhibit 7).10Id.11 Luning, Salazar Travels to Lakewood Thursday to announce strict ethics policy reform, supra note 3(Exhibit 2).


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CINDY ACREE, COLORADO STATE REPRESENTATIVE

MIKE MAY, COLORADO STATE REPRESENTATIVE

Cindy Acree (RAurora) was elected in November 2008 to the Colorado House ofRepresentatives representing House District 40. Mike May (RParker) has served in the

Colorado House of Representatives since 2003 serving House District 44 and is currentlythe House Minority Leader. Reps. Acree and May are commended for taking a standagainst unethical lobbying activities at the capitol.

Reporting Unethical Lobbying Activities

On Friday, December 12, 2008, Rep. May announced he would resign his stateHouse seat, which opened up Rep. Mays position as House Minority Leader.Representative David Balmer (R-Centennial) subsequently announced he would seek towin this leadership position.12

According to public records, the following Monday morning Rep. Acree wascontacted by Erik Groves, a lobbyist for the Colorado Chiropractic Association (CCA),who asked her to support Rep. Balmers bid for minority leader. Mr. Groves contactedRep. Acree in person and by phone to talk about supporting Rep. Balmers race forminority leader and, in the same phone conversation, mentioned that he had a check forher from the CCAs political committee.13 Legislative rules prohibit lobbyists frombecoming active participants in leadership races, and it was clear to Rep. Acree that thisaction crossed the line into active participation.14 Rep. Acree immediately wrote a letterto Rep. May detailing what happened and her concerns about it.15

Rep. May then filed an ethics complaint against Rep. Balmer and Rep. Acree filedan ethics complaint against Mr. Groves.

16After filing the complaint, Rep. May withdrew

his resignation from the House, offering to stay on as Minority Leader for at least anothersession to prevent a tainted race to fill his vacated leadership position.17

A three-member joint House and Senate committee was appointed by legislativemembers to review the complaint.18 In March 2009, the committee unanimously voted torecommend that legislative leaders formally admonish Mr. Groves in a private meeting.19

12 Steven Paulson, Ethics charges dropped against Colorado lawmaker,Aurora Sentinel, Jan. 29, 2009

(Exhibit 8).13 Lynn Bartels, Lobbyist contrite about pitch to lawmaker,Rocky Mountain News, Jan. 16 2009 (Exhibit9).14 Colorado House and Senate Joint Rule 36(b)(4).15 Colleen Slevin, Rep. denies working with lobbyist for leader job,Examiner.com, Jan. 10, 2009 (Exhibit10).16 Paulson, Ethics charges dropped against Colorado lawmaker, supra note 12 (Exhibit 8).17Id.18 Bartels, Lobbyist contrite about pitch to lawmaker, supra note 13 (Exhibit 9).19 Report of Committee of Legislators on Complaint Against Lobbyist, March 4, 2009 (Exhibit 11).


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In January 2009, the Colorado House Ethics Committee found that Rep. Balmerwas not involved with Mr. Groves lobbying of Rep. Acree and dismissed the complaintagainst him.

20

Thanks to Reps. Acree and May coming forward, illegal influences in a leadership

election were exposed and thwarted.

20 Paulson, Ethics charges dropped against Colorado lawmaker, supra note 12 (Exhibit 8).


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ERIN TOLL, DIVISION DIRECTOR

COLORADO DIVISION OF REAL ESTATE

Erin Toll was appointed as the Director of the Colorado Division of Real Estate in

September 2006. Prior to her appointment, Ms. Toll served as the Deputy Commissionerof Compliance and Market Regulation for the Colorado Division of Insurance. Ms. Tollhas cracked down on mortgage fraud and other abuses of government resources byinitiating a full investigation of Colorados conservation easement program and byworking to close legal loopholes exploited by landowners, appraisers, land trusts, andmortgage brokers.

Conservation Easement Program

Colorados conservation easement program allows landowners to obtain taxdeductions and transferable tax credits that they can sell when they grant permanent

easements restricting development on their property.

21

Ms. Toll suspected thatexcessively high appraisals were given to properties involved in the program.22 Inflatedappraisals allow landowners to claim higher tax deductions and obtain more tax creditsthan were warranted, thus reducing state tax receipts by as much as $38.2 million. 23 Tocombat the problem, Ms. Toll directed the Department of Regulatory Agencies Divisionof Real Estate to issue 30 subpoenas as it launched a statewide investigation into possibleconservation easement abuse in Colorado.24

Concerns raised by Ms. Tolls investigation spurred Colorado lawmakers to createthe Colorado Conservation Easement Oversight Commission.

25In January 2009, the

Commission began reviewing nonprofit land trusts to make sure that they were qualifiedto monitor lands and have the financial resources to defend the easements againstdevelopment or misuse in order to prevent future abuses like those uncovered by Ms.Toll.26 If the Commission finds the trust is qualified, it then becomes state certified. TheDivision of Real Estate conducts the certification process and any trust not certified bythe end of 2009 will no longer be able to accept easements beginning in 2010.27

Mortgage Fraud Probe

In the last year Ms. Toll has also launched aggressive investigations intomortgage fraud. In one example, she investigated a real estate kickback schemeinvolving five houses in Colorado Springs purchased within 48 hours of each other by

21 Margaret Jackson, Unease over easements, The Denver Post, March 2, 2008 (Exhibit 12).22Id.23Id.24 Margaret Jackson, Subpoenas issued over easements, The Denver Post, November 21, 2007 (Exhibit 13).25 Jerd Smith, Land trusts must pass state muster under new easement rules,Rocky Mountain News,October 27, 2008 (Exhibit 14).26Id.27Id.


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one owner, all of which ended up in foreclosure.28 As part of the investigation, recordswere subpoenaed from a title company, a real estate agency, and two banks.29 Ms. Tollmarked the investigation as a high priority for her staff to determine whether anywrongdoing led to the foreclosures.30 The real estate agent involved in the transactionswas presented to the Colorado Real Estate Commission in January 2009.31 The

Commission determined that the agent violated several state statutes governing real estatebrokers and Commission rules, fined the agent $20,000 and revoked his license.32

In another mortgage fraud case, Ms. Tolls division imposed sanctions on at least12 real estate agents, ranging from revocation of their real estate license to small fines.33The real estate agents were involved in a mortgage fraud scheme in 2006 that resulted in88 foreclosures out of 105 home sales when the buyers allegedly walked away from thehomes after receiving kickbacks from sales at inflated prices.

34The investigation found

that of the 105 homes, 98 of the transactions involved a single broker; Broker One RealEstate Professionals of Denver.35 As a result of Ms. Tolls investigation, more than 20real estate agents received sanctions such as fines and revocation of their licenses in order

to deter future abuses.

36

After sanctions were imposed, Ms. Toll submitted informationfrom the investigation to federal authorities, including the FBI, IRS, U.S. Postal Serviceand Secret Service.37

Ms. Tolls efforts not only held accountable those people abusing governmentresources, but also sent a compelling message to others that such conduct will not betolerated.

28 Bill Vogrin, 2 banks drawn into mortgage fraud probe, The Colorado Springs Gazette, October 6, 2008(Exhibit 15).29Id.30Id.31 Complaint Matters: Minutes, Colorado Real Estate Commission Meeting, January 6, 2009 (Exhibit 16).32Id.33 John Rebchook, Colorado mortgage fraud probe uncovers kickback,Rocky Mountain News, October 28,2008 (Exhibit 17).34 Tom Hacker, Erin Tolls war on mortgage fraud rolls on,Northern Colorado Business Report, November20, 2008 (Exhibit 18).35 Rebchook, Colorado mortgage fraud probe uncovers kickback, supra note 33 (Exhibit 17).36Id.37Id.


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GABE SANTOS, LONGMONT CITY COUNCIL MEMBER

SARAH LEVISON, LONGMONT CITY COUNCIL MEMBER

Gabe Santos was elected in a special election in 2008 to the Longmont CityCouncil. Sara Levison was elected to the Longmont City Council in November 2007.

Council members Santos and Levison lead the effort to strengthen Longmonts campaignfinance laws by establishing a municipal Election Task Force. Under their direction, theTask Force recommended dramatic improvements to the regulations and created anofficial Election Committee to ensure the regulations are enforced.

Election Task Force Recommends Election Reform

Longmont was one of the first cities in Colorado to adopt its own campaignfinance regulations.38 Nonetheless, several campaign finance problems arose in theNovember 2008 election that suggested those rules were in need of an overhaul. Thisinspired council members Santos and Levison to create an Election Task Force to

examine campaign finance issues and make recommendations for improvements.

39

TheTask Force was composed of nine Longmont residents from various political affiliationsand met from May through November of 2008.40

The Task Forces Final Report to the City Council in 2008 contained 27recommended changes to Longmonts campaign finance regulations.41 The City Councilsupported virtually all of the changes, including setting a $1,000 cap on campaigncontributions from individuals, organizations and committees, establishing specificsanctions for election violations and increasing reporting of campaign contributions andexpenditures.

42

Most notably, the City Council approved and implemented the Task Forcesrecommendation to create an Election Committee. The functions of the ElectionCommittee are to advise the City Clerk and city council on election and campaign financeissues, review campaign reports and alleged violations and hold hearings on violations,consultation and oversight of municipal elections not coordinated with the county.43

Thanks to the initiative and leadership of Council members Santos and Levison,Longmonts campaign finance regulations are stronger, city officials are better advised oncampaign finance issues and an enforcement mechanism now exists to hold politicalactors accountable for skirting the law.

38

Rachel Carter, Campaign finance laws may change,Longmont Times-Call, December 2, 2008 (Exhibit19).39Id.40 Longmont Fair Campaign Act, Election Task Force Final Report, 2008 (Exhibit 20).41Id.42 City of Longmont, Minutes of Longmont City Council Meeting, March 10, 2009,http://www.ci.longmont.co.us/city_council/minutes/documents/031009rs.pdf (Exhibit 21); Rachel Carter,Election prospects boost call for campaign finance rules,Longmont Times-Call, February 24, 2009 (Exhibit22).43 Longmont Fair Campaign Act, Election Task Force Final Report, supra note 40 (Exhibit 20).


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THE BAD

REPRESENTATIVE JACK POMMER

Colorado Representative Jack Pommer (D-Boulder) was elected in 2002 in HouseDistrict 11 and is currently serving his fourth term in the state House of Representatives.

Rep. Pommer sits on the Joint Budget Committee and chairs the House AppropriationsCommittee. Rep. Pommer demonstrated an egregious pattern of ignoring Coloradocampaign finance disclosure laws resulting in the imposition of more than $23,000 infines and penalties.

Delinquent Filing of Campaign Finance Reports

Rep. Pommer was a candidate for Colorado House of Representatives in the 2008general election. On April 7, 2009, the Colorado secretary of state fined Rep. Pommer$4,050 for late filing of a campaign finance disclosure report. Rep. Pommers campaigncommittee did not file that report until after an online media outlet reported on that

delinquency and a number of other unpaid penalties from previous campaigns.

44

The day before that penalty was imposed, Rep. Pommers candidate committeepaid $15,000 in fines and penalties to the secretary of states office for six otherdelinquent filings.45 His candidate committee was subsequently notified that it still owedthe state $8,320.00, for a total of $23,320 in penalties.46 As an explanation for his patternof delinquencies, Rep. Pommer was unrepentant and merely explained that he is not goodat paperwork.47

Colorados Fair Campaign Practices Act requires all candidate committees to filecontribution and expenditure reports according to a statutory schedule, including filingsthirty days after a majorelection and fifteen days after the end of the quarter in off-election years.48 Under the state constitution, the penalty for a late filing is $50 per day,subject to waiver upon a showing of good cause to the secretary of states office.49 Rep.Pommers pattern of late filing, coupled with his dismissal of campaign finance filingrequirements as mere paperwork, shows a disregard for transparency in campaign andpolitical finance activities.

44 Staff Reporter, Pommer Owes State Nearly $20K For Delinquent Filings, Face the State.com, April 6,2009 (Exhibit 23).45 Letter from Kristine Reynolds, Elections Division, Colorado Department of State, to Rep. Jack Pommer,April 8, 2009 (Exhibit 24).46Id.47 Jessica Fender, File this under embarrassing, The Denver Post, April 9, 2009 (Exhibit 25).48 C.R.S. 1-45-108.49 Colo. Const., art. XXVIII, 10(2)(a).


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COLORADO DEPARTMENT OF HEALTH CARE

POLICY AND FINANCING

The Colorado Department of Health Care Policy and Financing (HCPF) existsto improve access to cost-effective, quality, health care services for Coloradans. Last

year, HCPF management violated the state whistleblower act by retaliating against anemployee for reporting wrongdoing in the department and then subsequentlyimplemented an employee policy designed to thwart future whistleblowers.

Firing whistleblower

In April 2008, HCPF accountant Annmarie Maynard secretly recorded a meetingin which co-workers instructed her to help cover up accounting errors within the HCPFthat resulted in the state owing up to $8 million to the federal government foroverdrawing Medicaid and Childrens Basic Health Plan Plus funds.50 Ms. Maynardpublicly exposed the attempted cover-up by providing a copy of the recording to a

reporter at 9 News.51 Shortly after Ms. Maynard spoke to the reporter, HCPFmanagement terminated her employment.52

Ms. Maynard challenged her termination in an appeal to the State PersonnelBoard. After a seven-day hearing on the appeal, it was found that HCPF wronglyharassed, demoted, and fired Ms. Maynard after she discovered accounting errors, andthat the retaliation violated the Colorado Whistleblower Act.53

Implementation of no-recording policy

Immediately after Ms. Maynard filed her appeal to the Personnel Board, HCPF

unveiled a new policy that prohibited employees from using hidden recording devices.54Under Colorado statute, it is legal to record a conversation without permission as long asthe recording party is part of the conversation.55

After critics pointed out that the policy would prevent other whistleblowers fromtape-recording possible fraud, waste or abuse, Governor Ritter directed HCPF to cancelthe new anti-taping policy.

56Most notably, HCPF chose to try and squelch future

whistleblowers rather than reprimand the employees who attempted to cover upwrongdoing.

50

Deborah Sherman, State employee fired after blowing whistle, 9News.com, July 2, 2008 (Exhibit 26).51 Todd Hartman, State says nothing to hide in no taping rule,Rocky Mountain News, December 31, 2008(Exhibit 27).52 Sherman, State employee fired after blowing whistle, supra note 50 (Exhibit 26).53 Initial Decision of the Administrative Law Judge, Maynard vs. Dept. of Health Care Policy andFinancing, State Personnel Board Case No. 2007B073(C), Dec. 8, 2008 (Exhibit 28).54Id.55 C.R.S. 18-9-30456 Deborah Sherman, Governor reconsiders no-taping policy, 9News.com, January 6, 2009 (Exhibit 29);Chuck Plunkett, Governor canceled anti-taping policy,DenverPost.com, January 9, 2009 (Exhibit 30).


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KEN BUCK, WELD COUNTY DISTRICT ATTORNEY

Ken Buck (R) was elected as Weld Countys District Attorney in November 2004.Prior to being elected he worked with the U.S. Attorneys Office in Denver. Mr. Buckhas blatantly targeted immigrants, allegedly for identity theft, using unlawful means to

gather evidence.

Identity Theft Investigation Targeting Immigrants

On October 17, 2008, Weld County law enforcement officials launchedOperation Number Games by searching Amalias Translation and Tax Service, aGreeley business.57 The stated purpose of the operation was to investigate possibleidentity theft by undocumented immigrants.

58In that investigation, deputies with the

Weld County Sheriffs office searched Amalias business records dating back to 2000.59

In January 2009, the American Civil Liberties Union (ACLU), on behalf of

Amalias owner and several of its clients, filed suit against Mr. Buck and Weld CountySheriff John Cooke.60 The suit alleged that the search and seizure of tax records atAmalias violated the state constitutional right of privacy, the Colorado Rules of CriminalProcedure and the Fourth Amendment of the U.S. Constitution.61 After a one and a halfday hearing, District Court Judge James Hiatt ruled against Mr. Buck and entered aninjunction requiring Mr. Buck, Mr. Cooke and their offices to return all informationobtained in the search.62 Among other things, Judge Hiatt ruled that the search wasunreasonably overbroad and went far beyond what was established, either authorizedin the warrant or for which there might have been probable cause in the affidavit.63Judge Hiatt also found that the search provided little of public benefit compared to theprivate harm to [the business owner], to her business, to her clients, to her clients privacyin terms of fear, in terms of invasion of confidential private material.

64

In a subsequent criminal case filed by Mr. Bucks office, District Court JudgeJames Hartmann ruled that evidence obtained from the search of Amalias had to be

57 Mike Peters, 13-year-old case led to new probe, Greeley Tribune, November 14, 2008 (Exhibit 31).58 Sharon Dunn, ACLU sues Weld DA Ken Buck and Weld sheriff John Cooke, Greeley Tribune, January28, 2009 (Exhibit 32).59Id.60 Complaint,In re Search of Amalias Translation and Tax Service, 2009-CV-100, District Court,

Nineteenth Judicial District (Exhibit 33); Tom McGee, Seizure of tax files leads to ACLU suit, TheDenverPost, January 28, 2009 (Exhibit 34).61Id.62 Reporters Transcript,In re Search of Amalias Translation and Tax Service, District Court, WeldCounty, Colorado, April 13, 2009, p. 21 (Exhibit 35); Monte Whaley, Weld ID-theft case put on hold, TheDenver Post, March 11, 2009 (Exhibit 36).63 Reporters Transcript, supra note 62 at p. 15-16 (Exhibit 35).64Id. at p. 19.


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suppressed because the search violated the Fourth Amendment of the U.S. Constitution.65Mr. Bucks office voluntarily dismissed 30 additional cases in response to the ruling.66

In response to the ACLU suit, Mr. Bucks office set up a Legal Defense Fundon the county website, selling t-shirts with the slogan Weld County Standing Up For

Americans allegedly to offset taxpayer money used to defend the suit.

67

As of May2009, the Legal Defense Fund had reportedly raised $2,010, while Weld County paidmore than $97,000 in legal fees just in the ACLU case.68 Mr. Bucks office is appealingboth the decision in the ACLU case and the suppression order in the criminal case.69

Mr. Bucks grandstanding and reckless spending of taxpayer resources in defenseof a search deemed illegal by the court suggests that he is putting his political agendaabove the best interests of the citizens of Weld County.

65 Order re: Defendants Motions to Suppress Evidence, People v. Gutierrez, Weld County District CourtCase No. 08CR2087 March 7, 2009 (Exhibit 37).66 Sharon Dunn, Bills from ACLU suit adding up to nearly $100,000, Greeley Tribune, May 28, 2009(Exhibit 38).67 Weld County District Attorneys Office Legal Defense Fund,http://www.co.weld.co.us/departments/da/da_LEGAL%20DEFENSE%20FUND.html (Exhibit 39).68 Dunn, Bills from ACLU suit adding up to nearly $100,000, supra note 66 (Exhibit 38).69Id.


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DAVID SPELLMAN, MAYOR OF BLACK HAWK

David Spellman (U) was appointed by the Black Hawk City Council to fill thevacant mayoral seat in Black Hawk in 2006 and was elected Mayor in April 2008. MayorSpellman was listed in the 2008 Ethics Roundup because of a felony menacing and third-

degree assault conviction. This year, he has created a reputation and culture of corruptionthrough the misuse of state historical funds.

Questionable Use of State Historical Funds

In 1991, Colorado voters approved a tax on limited-stakes gaming, deeming 28percent of the tax to a newly created state historical fund.70 The law directs that 20percent of the historical fund be used for the preservation and restoration of three townswhere gambling is legal in the state: Black Hawk, Cripple Creek and Central City. 71Each town has full control of the funds, which are distributed according to the proportionof the gaming revenue generated in each area.72

The City of Black Hawk, with about 118 residents, receives more than $4 millionannually for the historical fund.73 In April 2008, a CALL7 investigation revealed thatnearly $3 million of historical fund money went to past and present elected officials ortheir relatives.74 The Colorado Bureau of Investigation found that from 2003 throughspring 2008, Mayor Spellman received more than $1 million in historical preservationgrants; Alderwoman Kathleen Doles received $492,000 for work on her personalresidence; and Alderwoman Diane Cales received $56,884.75 Further, with MayorSpellman at the helm, funds were also used to buy such things as granite countertops,entertainment centers and a dog door,76 renovations that clearly please the owner but haveno historical restoration value.

Both the Colorado Bureau of Investigation and Jefferson County DistrictAttorneys Office have launched inquiries into how the City of Black Hawk is spendingcity money, particularly the state historical funds.77

70 Colo. Const. art. XVIII, 9(5)(B)(II).71 Colo. Const. art. XVIII, 9(5)(B)(III).72

Id.73 Ann Schrader, Historic heritage left behind as Black Hawk grows, The Denver Post, January 18, 2009(Exhibit 40).74 Arthur Kane and Tony Kovaleski, Millions go to fix up Mayor, Council Members homes, The DenverChannel.com, April 30, 2009 (Exhibit 41).75 Schrader, Historic heritage left behind as Black Hawk grows, supra note 73 (Exhibit 40).76 Tom Burke and Tony Kovaleski, Money Earmarked for Preservation Now Directed To City Agencies,The Denver Channel.com, October 14, 2008 (Exhibit 42).77Id.


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THE UGLY

COLORADO STATE UNIVERSITY BOARD OF GOVERNORS AND

BOARD VICE PRESIDENT JOE BLAKE

The Colorado State University (CSU) Board of Governors recently selectedBoard Vice President Joe Blake as the sole finalist for the newly created Chancellorposition, which until January of this year was conjoined with the President position. Inapparently illegal closed door meetings, the Board made the decision to name Mr. Blakeas the sole finalist despite Mr. Blakes inherent conflicts of interest, which has causedoutcry from students and other CSU stakeholders.

Colorado State University Chancellor Search

In a controversial decision made in December 2008, the Board voted to split theuniversity chancellorship and Fort Collins presidency positions.78 As vice president of

the Board, Mr. Blake participated in the decision to create a new, stand alone universitychancellor, including the formulation of position details like salary and other benefits.Shortly thereafter, the Board convened a search committee. Although Mr. Blake did notparticipate in the search committee, its members were made up almost entirely of Mr.Blakes CSU board colleagues and his peers from executive ranks of corporateColorado.79

Mr. Blake formally submitted his application for the chancellor position on April29, the same day he attended a closed meeting with the head of the Board.

80Less than a

week later on May 4, the search committee recommended just two candidates to theBoard for its consideration, one of which was Mr. Blake.81 The Board abruptly convened

a special meeting the next day and spent over four hours in executive session discussingthe two candidates.82 The Board came out of executive session only to publicly vote onits decision to name Mr. Blake and announced that decision publicly on May 6.83

Concerns over the stealth and rushed search inspired state lawmakers to introducea transparency bill, HB 1369, just one week before the end of the legislative session andbefore Mr. Blake was named as the lone finalist.84 The bill established uniform processes

78 John Tomasic, Blake skirted formal CSU chancellor search process, selected 6 days later, The ColoradoIndependent, May 14, 2009 (Exhibit 43).79

John Tomasic, CSU board member Blake selected chancellor, The Colorado Independent, May 6, 2009(Exhibit 44).80 Tomasic, Blake skirted formal CSU chancellor search process, selected 6 days later, supra note 78(Exhibit 43).81 Gayle Perez, Consensus: Blake OK, process not, The Pueblo Chieftain, May 07, 2009 (Exhibit 45).82Id.83 Official Notice Board of Governors: Board of Governors of the Colorado State University SystemMay 5, 2009 (Exhibit 46).84 Tomasic, Blake skirted formal CSU chancellor search process, selected 6 days later, supra note 78(Exhibit 43).


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for public colleges and universities to follow when hiring a president or chancellor.85The Boards convening in a special meeting on the eve of the bills consideration by theSenate adds further suspicion that the decision to select Mr. Blake was predetermined anddeliberately rushed through to avoid outside interference.86

Weeks later, the Board agreed to release an audio tape recording of its May 5closed-door meeting during which the members discussed the two chancellorcandidates.87 The recording suggests that board members violated the states openmeetings law by voting to move forward on the recommendation of Mr. Blake as the onlyfinalist for the chancellor position.88 By state law, a vote may only be taken at a meetingthat is open to the public.89 A Larimer County District Court judge ruled on June 19 thatthe May 5 executive session did violate state law and ordered portions of the recording ofthat session to be made public.

90

The Boards lack of strict adherence to open meetings requirements incited apublic call for reconsideration from a coalition of nonprofit, good-government groups

Colorado Ethics Watch, Colorado Common Cause and New Era Colorado. The coalitionasked the CSU Board of Governors to restart the chancellor search to create moretransparency in the process.91 Promptly thereafter, the Board convened a special sessionduring which the members re-designated Mr. Blake as the sole finalist for the chancellorposition.92 The re-designation of Mr. Blake was clearly a public relations maneuver bythe Board to give the appearance that this was an open and transparent search thatincluded public input.

85Id.86 Tomasic, CSU board member Blake selected chancellor, supra note 79 (Exhibit 44).87 Gayle Perez, Tape shows board violated open meeting law, The Pueblo Chieftain, May 21, 2009 (Exhibit47).88

Id.89Id.90 Order,Multimedia Holdings Corp., et al. v. Board of Governors of the Colorado State UniversitySystem, Larimer County District Court Case No. 09CV473, June 19, 2009 (Exhibit 48).91 John Tomasic, Watchdog coalition demands CSU halt chancellor hire, wants search restarted, TheColorado Independent, May 22, 2009 (Exhibit 49).92 Designation of Mr. Joseph L. Blake as the finalist for consideration as the Chancellor of the ColoradoState University System: Board of Governors of the Colorado State University System, May 26, 2009(Exhibit 50).


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LIONEL RIVERA, COLORADO SPRINGS MAYOR

Lionel Rivera (R) was first elected in Colorado Springs to an at-large city councilseat in April 1997 and re-elected again in April 1999. In April 2001, he was elected toserve as vice mayor for a two-year term. In April 2003, he was elected mayor and was

subsequently re-elected as mayor in 2007. Mr. Riveras ethics issues stem from apossible conflict of interest with his position at UBS Financial Services and his dealingswith the U.S. Olympic Committee on behalf of the city of Colorado Springs.

U.S. Olympic Committee Conflict of Interest

Ron Johnson, an investment adviser with ties to a developer that lost out on the$53 million deal to keep the U.S. Olympic Committee (USOC) in Colorado Springsfiled an ethics complaint against Mr. Rivera with the Colorado Springs IndependentEthics Commission (CSIEC).

93The complaint alleges that Mr. Rivera, who is

employed by UBS Financial Services, committed an ethics breach in March 2008

because he is, or was, an investment adviser to LandCo Equity Partners and its chairmanRay Marshall, the developer selected for a $53 million deal involving the city and theUSOC last year.94

The complaint cited the Colorado Springs Code of Ethics, which prohibits cityofficials from "engag[ing] in any actions that may create, or does create, the appearanceof impropriety" and defines a "conflict of interest" to include "any personal or financialrelationship that could influence or be perceived to influence the representation orconduct of business for, or on behalf of the City."95

The CSIEC met on Monday, May 18, to consider the complaint and told Mr.

Johnson that it needed more specificity about the allegations, including dates, and anyevidence to support them, before it could determine whether it has jurisdiction. 96 TheCommission can only hear complaints regarding facts that occurred within the past 12months. The original deal between the city, LandCo and the USOC closed on March 31,2008.97

On June 12, the CSIEC heard arguments from the complainants counsel and

others, including an attorney for LandCo's chairman who acknowledged that in 2007,

before the USOC contract was signed, Mr. Rivera handled three brokerage accounts tied

93 Daniel Chacn, Mayor faces complaint over USOC, Colorado Springs Gazette, May 7, 2009 (Exhibit51).94 Daniel Chacn, Panel wants specificity on ethics complaint against mayor, Colorado Springs Gazette,May 18, 2009 (Exhibit 52).95 The City of Colorado Springs Code of Ethics, 1.3.106.96 Chacn, Panel wants specificity on ethics complaint against mayor, supra note 94 (Exhibit 52).97 Marshall Zelinger, Ethics panel to consider complaint against Mayor Rivera, KRDO.com, May 14, 2009(Exhibit 53).


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to its chairman, Ray Marshall.98 It concluded that the complaint was not frivolous, that it

did have jurisdiction over the allegations and that further proceedings are necessary.99

The case is still pending.

Based on the evidence presented thus far, it appears that Mr. Riveras conduct fits

squarely within the definition of conflicts of interest set forth in Colorado Springs Code

of Conduct.

98 Daniel Chacn, Business ties disclosed; Rivera denies conflict, Colorado Springs Gazette, June 12, 2009(Exhibit 54).99Id.


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Due to the voluminous nature of the exhibits,

all exhibits are posted for public view at:

www.ColoradoforEthics.org

Documents

Ethics Roundup 2009