Rocky article misled on 527s

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The Rocky Mountain News uncritically repeated a Republican political consultant's misleading characterization of organizations known as 527s as "loopholes that allow liberal Colorado tycoons like Tim Gill and Pat Stryker to contribute unlimited amounts of money to fund independent attack ads against Republican candidates." The article failed to note the existence of conservative Colorado 527s such as the Trailhead Group that fund attack ads against Democratic candidates and also are financed by wealthy Coloradans.

In an August 23 article by reporter Alan Gathright, the Rocky Mountain News uncritically repeated a Republican political consultant's misleading characterization of the independent fundraising organizations known as 527s as "loopholes that allow liberal Colorado tycoons like Tim Gill and Pat Stryker to contribute unlimited amounts of money to fund independent attack ads against Republican candidates." The article failed to note the existence of conservative Colorado 527s such as the Trailhead Group that fund attack ads against Democratic candidates and also are financed by wealthy Coloradans.

The misleading statement was in an article regarding complaints by Colorado Citizens for Ethics in Government, a watchdog group, about two Denver businessmen who, in the News' words, "used a legal loophole in the state campaign finance law to funnel $25,000 in contributions through limited-liability companies to Republican GOP gubernatorial candidate Bob Beauprez." On its website, CCEG describes itself as "a state-based project of Citizens for Responsibility and Ethics in Washington (CREW), a non-partisan 501(c)(3) organization that targets government officials who sacrifice the common good to special interests." The News article reported that "Colorado Common Cause Executive Director Jenny Flanagan said, while technically legal, the practice of one person using (sic) 'using multiple LLCs to max out contributions . . . flies in the face of the law.' "

The News reported that "[Republican political consultant Mike] Ciletti and other Republicans questioned why watchdog groups aren't concerned about loopholes that allow liberal Colorado tycoons like Tim Gill and Pat Stryker to contribute unlimited amounts of money to fund independent attack ads against Republican candidates." The News clarified that Ciletti was "referring to the independent groups known as '527s' because of their reference in the IRS tax code," but failed to note that wealthy Coloradans also are funding conservative 527s such as Trailhead Group that produce attack ads against Democratic candidates.

The Internal Revenue Service (IRS) defines an "organization subject to 527" as "a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office or office in a political organization."

The Denver Post reported on July 19 that "Trailhead was founded in May 2005 by Gov. Bill Owens, beer magnate Pete Coors and Republican Party fundraiser Bruce Benson," and that since that time the group has collected $1.6 million in contributions, including "$150,000 from Pete Coors, and $50,000 donations from Holly Coors, Denver businessman Charlie Gallagher and Village Homes chief executive John Osborn." The Post reported that Gill and Stryker together have contributed $178,680 to a 527 called Clear Peak Colorado, and $83,334 each to a 527 called Citizens for Colorado.

Trailhead has run radio ads attacking Democratic gubernatorial candidate Bill Ritter and State Rep. Jim Riesberg (D-Weld), and also ran a "robocall" telemarketing campaign attacking State Rep. Michael Merrifield (D-Manitou Springs).

From the August 23 Rocky Mountain News article by Alan Gathright titled "Liberal group knocks GOP campaign gifts"

But Chantell Taylor, director of Colorado Citizens for Ethics in Government, called the LLC loophole "a glaring end-run around the individual contribution limits."

Ciletti and other Republicans questioned why watchdog groups aren't concerned about loopholes that allow liberal Colorado tycoons like Tim Gill and Pat Stryker to contribute unlimited amounts of money to fund independent attack ads against Republican candidates.

"It's far more egregious on the 527 groups' side - a thousand dollars versus a million dollars," Ciletti said, referring to the independent groups known as "527s" because of their reference in the IRS tax code.

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