money spill

8/10/2019 Money Spill

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Introduction

Last year, Ethics Watch published Spend Baby Spend , a report looking at the oiland gas industry’s spending on lobbying and elections in Colorado.

1 This new report,Money Spill , looks at oil and gas spending in the 2014 election cycle that just

concluded.

Looking only at disclosed spending – not spending by dark-money nonprofits ortrade associations – 2014 saw a titanic money spill compared to election spending bythe oil and gas industry in the past. While our 2013 report showed that oil and gas spentover $800,000 on Colorado state elections (not including United States Senate orCongressional elections) over two election cycles (2010 and 2012), this year’s reportshows that the industry spent a whopping $11.79 million on the 2014 election forColorado state offices.

The vast majority of this spending came from a ballot issue committee formed to

oppose anti-fracking initiatives that never made the ballot. Even after the anti-frackinginitiatives were withdrawn, the industry-funded issue committee spent millions oncanvassing and get-out-the-vote efforts in 2014.

Even outside of that issue committee, however, oil and gas election spending jumped – from approximately $400,000 to candidates, PACs, 527s and political partiesfor the 2010 and 2012 election cycles to over $914,000 in 2014.

It remains to be seen whether the oil and gas industry’s investment in Coloradopolitics pays off. A task force established by the governor to review Colorado oil and gasexploration regulations has not issued any recommendations, and the new General

Assembly has just begun.

Our hope is that by shining a light on the oil and gas industry’s investment in theoutcome of Colorado’s recent elections, citizens will be better able to hold publicofficials accountable if they put private industry’s interests over the common good.

1 Spend Baby Spend report is available at http://www.coloradoforethics.org/co-pages/spend-baby-spend (May 2013).

http://www.coloradoforethics.org/co-pages/spend-baby-spend








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I. Oil and Gas Industry Money Spills into 2014 State Elections

In our review of 2014 cycle filings in the state campaign finance system(TRACER) we identified 28 oil and gas companies or trade associations that spent

money in state elections. [Table A] The contributions from these companies totaled$11,655,197. Because corporations are prohibited by state law from giving moneydirectly to state candidates directly, the majority of oil and gas company money wascontributed to political committees (“PACs”) and political organizations – which areregistered to be involved in state candidate elections – and state ballot issuecommittees. Oil and gas companies contributed $779,950 to a bipartisan mix of statePACs and political organizations. However, as discussed in more detail below, thelargest political sector flooded with oil and gas money in this election was issuecommittees. Over $10.8 million was given by oil and gas companies to issuecommittees – almost all of it to one committee created to oppose fracking bans andsimilar measures: Protecting Colorado’s Environment, Economy & Energy

Independence (PCEEEI).

Under the U.S. Supreme Court ruling in Citizens United v. FEC , corporations andassociations may use corporate funds for political advertising that mentions a statecandidate. However, our review of the 2014 filings for such corporate “independentexpenditures” and “electioneering communications” shows that none of these oil andgas companies chose to undertake such direct political spending. Instead, thesecompanies donated their money to PACs and political organizations, which in turncontributed money to state candidates and ran political advertisements.

In addition to direct political spending by oil and gas companies and associations,14 registered PACs or 572 organizations sponsored by the oil and gas industry spent$130,800 in the 2014 state elections. [Table B] Most of this money was spent in directcontributions to candidate committees (as discussed in more detail later in this report),but $56,500 was given to other PACs or political organizations. Although PACs often

92%

1%

7%

Oil & Gas contributions in2014 state elections

Issue Committees

Candidates

PACs/527s



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spend money on electioneering advertisements targeting certain candidates, it does notappear any of these oil and gas industry PACs did such advertising in the 2014elections. Instead, these PACs chose to focus on contributing money directly tocandidates and other political entities (which may have done candidate-specificadvertising). Perhaps surprisingly, very little money was donated to the state political

parties in the 2014 cycle: only $1,000 to the Larimer County Republican Party and$5,925 to the state-wide Colorado Democratic Party.

According to National Institute on Money in State Politics database, individualsemployed in the oil and gas industry also contributed over $189,220 to state candidatesin the 2014 election.2 We did not conduct any further research in the state TRACERsystem regarding individual contributors. This report is based on spending by oil andgas companies, associations, and PACs.

II. Candidates Supported by Oil & Gas Money

A. Contributions to candidate campaigns from Oil & Gas PACs

Because oil and gas corporations cannot contribute money directly to statecandidates, our research traced contributions to candidates from the 14 registeredPACs sponsored by the industry. Oil and gas sponsored PACs contributed a total of$70,200 to state candidate committees. A bipartisan group of 86 state and countycandidates received contributions from oil and gas industry PACs. The 28 Democraticcandidates who received contributions were mostly incumbent lawmakers. In contrast,many of the 58 Republican candidates supported by oil and gas PACs werechallengers.

Oil and gas industry PACs also gave contributions in three out of four statewideraces on the 2014 ballot. The largest amount of activity was in the Governor and

Attorney General races – two positions which have influence over energy policy andlitigation related to contentious issues like local fracking bans.3 While these PACsunanimously supported the Republican candidate for AG, they almost completelysupported the incumbent Governor, with only one reported contribution to hisRepublican challenger. In the Attorney General election, five oil and gas PACscontributed a total of $4,850 to Republican candidate Cynthia Coffman. GovernorHickenlooper’s re-election campaign received $9,200 from nine oil and gas PACs, whileRepublican candidate Bob Beauprez received one oil and gas PAC donation of $1,100

– from a PAC that had already maxed-out to Governor Hickenlooper’s campaign. In

fact, two of the larger oil company PACs gave almost maximum-level contributions tothe Governor’s re-election campaign right after he took office.

2 This database can be found at http://www.followthemoney.org/. 3 The third statewide race affected by oil and gas industry money was the Treasurer’s office.Treasurer Walker Stapleton’s re-election campaign received three contributions from oil and gasPACs totaling $1,550.

http://www.followthemoney.org/






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B. Oil & Gas Companies & PACs find another way to supportcandidates

Another way that oil and gas industry PACs sought to maximize support forincumbent legislators was by donating to “leadership PACs” in the 2014 election. A

“leadership PAC” is a registered political committee separate from a state legislator’scampaign committee with the explicit purpose of helping that legislator and othercandidates from that legislator’s political party. Often, the legislator is the registeredagent for the PAC and that legislator’s name is in the title of the PAC, such as the“Carroll Leadership PAC” established by Senator Morgan Carroll. Other times the PACname is generic and the affiliated legislator is listed as the registered agent on publicfilings, such as the “Peak Leadership Committee” established by Senator Bill Cadman. Some incumbents hide their affiliation with a PAC by having a friend or relative listed asthe registered agent.

The use of these leadership PACs by incumbent legislators (and even some new

candidates) was more common in the 2014 state election cycle than in prior years.Usually these leadership PACs take in corporate, individual, union and other PACcontributions and then make contributions to individual candidate committees,spreading the money around to many candidates. Leadership PACs can also be used toco-sponsor events and provide logistical support for a candidate’s committee, so longas that non-monetary support is reported and under the contribution limitations.

Leadership PACs can accept corporate contributions (which are prohibited forcandidate committees) and have higher limits than candidate committees because theycan receive up to $550 per election cycle. In this way, leadership PACs offer analternative for oil and gas companies to support a legislator with corporate money that

cannot be donated to a campaign, or to provide an additional contribution after a“maxed-out” contribution to a campaign.

Twenty-seven state leadership PACs were identified as receiving money from oiland gas industry companies or industry PACs in the 2014 election, with all but four ofthem accepting corporate contributions from oil and gas companies that would not beacceptable for their personal campaign committee. [Table C] This was again abipartisan group of state legislators that benefitted from oil and gas contributions toleadership PACs: eleven Republicans and sixteen Democrats. A total of $18,750 in oiland gas direct corporate contributions and $7,000 in contributions from oil and gasPACs were given to leadership PACs in the 2014 election cycle.

III. Protecting Colorado's Environment, Economy & EnergyIndependence (PCEEEI) Issue Committee Spending

An issue committee called “Protecting Colorado’s Environment, Economy &Energy Independence”(PCEEEI) was registered on January 22, 2014 with the statedpurpose to “support state and local ballot initiatives promoting responsible oil and gasdevelopment, and oppose state and local ballot initiatives attempting to limit or ban oil



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and gas development, including any ban or restriction on hydraulic fracturing.” Whilethere were a number of pro- and anti- fracking ballot measures submitted through thetitle board process and collecting signatures, a “compromise” was announced on

August 4, 2014 which resulted in none of these measures being submitted for ballotaccess. Yet, PCEEEI continued to operate.

PCEEEI raised a total amount of $11,618,971 in 2014, almost exclusively from16 oil and gas companies. The largest donors were Anadarko Petroleum Corporationand Noble Energy who each contributed approximately $4,115,235 of corporate fundsto the issue committee. PCEEEI still received $325,000 in corporate contributions afterthe ballot measure compromise was announced in August, even though it was clear nostatewide ballot measure would be decided in that election.

PCEEI went on to spend almost all of the money raised in 2014. The committeehas reported total expenditures of $10,839,603. While some of that money is for legaland accounting fees, approximately $5.8 million was spent before the August

compromise on campaign consulting, paid signature gathering, public opinion research& advertising. More interesting is that PCEEEI spent another $4.9 million after thecompromise was announced and it was clear no statewide ballot measure would bedecided. Over $3.5 million was spent for voter file, campaign strategy, marketing,research, polling, tracking, digital, TV and radio advertising after the Augustcompromise. In addition, at least $1.2 million was spent for “canvassing” in October2014. Without a specific statewide ballot measure to support or oppose, it appears thiscanvassing and advertising was focused more on general support for the oil and gasindustry in Colorado.

PCEEEI still has $779,367.78 cash on hand as of the December 4, 2014reporting deadline. It is unclear what that money will be used for going forward.

54%

46%

PCEEEI Spending in 2014($10.84 million total)

Pre-Aug Compromise

($5.8 mil)

Post-Aug Compromise

($4.9 mil)



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Table B:Registered PACs & 527s sponsored by the oil and gas industry that

spent money in 2014 Colorado Elections

Anadarko Petroleum PAC

Atmos Energy Corporation PAC

Chesapeake Energy Corporation Fed PAC

Colorado Energy Education Pac (CEEPAC)

Colorado Petroleum Marketers Association PAC

Colorado Petroleum PAC

Colorado Wyoming Petroleum Marketers Association Action Fund

Fund For Colorado's Energy Future

Noble Energy PAC (Federal PAC)Occidental Petroleum Corp PAC (Federal)

PDC Energy Inc. Colorado PAC

QEP Resources PAC

Whiting Petroleum Corporation PAC/Whiting Petroleum Corporation PAC FEC

WPX Energy, Inc. PAC



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Table C:State Legislator Leadership PACs which received industry money

in 2014 Colorado Elections

Name of Leadership PAC Candidate/ Legislatoraffiliated with PAC

Aguilar Leadership Fund Irene Aguilar Angela Williams Leadership Fund Angela WilliamsCarroll Leadership PAC Morgan CarrollDan Nordberg Political Committee Dan NordbergDominick Moreno Political Committee(DOMPAC) Dominick MorenoFrankPAC Frank McNulty

Garnett Leadership Fund Alex GarnettGuzman Green Fund for a Better Colorado

Lucia GuzmanJohn P. Morse Leadership PAC John MorseKathleen's PAC Kathleen ContiKevin's Political Action Committee (KPAC)

Kevin PriolaMcCann Leadership PAC Beth McCannPabon Leadership Fund Dan PabonPeak Leadership Committee CadmanPollyPAC Polly LawrenceRosenthal Majority Fund Paul RosenthalSzaboPAC Lizzy SzaboUlibarri Leadership Initiative Political ActionCommittee Political Action Committee (ULIPAC)

Jessie UlibarriWaller's Outstanding Leadership Fund

Mark WallerJenise May Leadership Fund Jenise MayWolf PAC Mary HodgeDickey Lee Hullinghorst Leadership Fund

Dickey Lee HullinghorstCheriPAC Cheri JahnWilsonPAC James WilsonDuran for CO Leadership Crisanta DuranBrianPAC Brian DelGrassoTransmountain Political Action Bob Rankin



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Research methodology

1. We started with a list of oil & gas entities active in Colorado elections for the 2014election cycle as compiled at www.followthemoney.org, a project of the Montana-based National Institute on Money in State Politics.

2. Followthemoney.org also provided the total amount contributed to candidates byindividuals employed in the oil & gas industry for 2014 cycle but we did not digdeeper into these numbers.

3. We then searched the Colorado Secretary of State’s TRACER database (located athttp://tracer.sos.colorado.gov) for political spending information regarding theseentities –corporations, trade associations, and their sponsored PACs. Becausecorporations remain prohibited from making direct contributions to state-levelcandidates in Colorado, corporate political money (from oil and gas companies andtrade associations) usually flowed to five types of political groups:

Political committees (a/k/a PACs), groups that are subject to contribution limitsand can make both direct contributions to candidates and independentexpenditures expressly supporting of or opposed to candidates;

Political organizations (a/k/a 527s), groups that are not subject to contributionlimits but cannot make direct contributions to candidates and who may spendmoney to support or oppose candidates so long as they avoid using “magicwords” that “expressly advocate” for or against a candidate;

Independent expenditure committees (a/k/a Super-PACs), groups which are

not subject to contribution limits and may not make direct contributions tocandidates, but who may make “independent expenditures” that constitute“express advocacy” (this type of organization sprung up in the wake of theSupreme Court’s decision in Citizens United v. F.E.C ., 558 U.S. 310 (2010));

Political party committees (e.g., the Colorado Democratic Party and ColoradoRepublican Party and their county and local counterparts); and

Issue committees, groups that may raise unlimited money to support or opposeballot initiatives and referenda.

4. Once we identified the list of oil and gas industry sponsored PACs, we identified

through TRACER reports the candidates who received contributions (from PACs).This enabled us to determine how many candidates and state & local races wereinfluenced by oil and gas industry spending.

5. In order to determine whether a PAC receiving contributions from oil and gascompanies, trade associations and sponsored PACs should be counted as a“leadership PAC”, we reviewed the name and registered agent inf ormation for thatPAC in TRACER to see if it referred to a candidate or legislator.

http://tracer.sos.colorado.gov/



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