reply brief of scott gessler in appeal of iec sanctions order

8/13/2019 Reply brief of Scott Gessler in appeal of IEC sanctions order

1/58

1

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 State

of Colorado______________________________________________Co-Counsel for the Plaintiff and Special AssistantAttorneys General for the State of Colorado:

David A. Lane, #16422KILLMER,LANE &NEWMAN,LLP1543 Champa Street, Suite 400Denver, Colorado 80202Telephone: (303) 571-1000; Fax: (303) [email protected]

Robert J. Bruce, #17742RJBLAWYER,LLC1543 Champa Street, Suite 400Denver, Colorado 80202Telephone: (303) [email protected]

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

Denver, Colorado 80211Telephone: (303) 325-7843; Fax: (303) [email protected]

COURT USE ONLY

_____________________________

Case No.: 13CV030421

Division: 376

The Honorable Herbert L. Stern III

REPLY BRIEF OF SECRETARY OF STATE SCOTT E. GESSLER


2/58

2

Introduction

Like all other statewide elected officials, the Colorado Secretary of State (the

Secretary) receives a discretionary fund for expenditure in pursuance of official business as

[the Secretary]sees fit.1Three weeks before the 2012 presidential election, the leftwing, DC-

based 501(c)(4) entity Colorado Ethics Watch (CREW) filed a criminal complaint with the

Denver District Attorney, alleging that the Secretary committed a felony and two misdemeanors

in the manner in which he utilized these discretionary and other state funds. The Denver District

Attorney ultimately declined to prosecute CREWs complaint. On the eve of the 2012

presidential election, however, the Colorado Independent Ethics Commission (the IEC or the

Commission) a state entity created by the voter-initiated Amendment 41 (Article XXIX) to

the Colorado Constitution to address a gift ban, a lobbying ban, and influence peddling voted

to investigate CREWs same criminal complaint. In other words, even though CREWs criminal

allegations had no nexus to Amendment 41 and the Commission has no criminal jurisdiction, the

Commission nonetheless asserted jurisdiction.

The State Controller, the Denver District Attorney, and the Colorado Legislative Audit

Committee separately and independently reviewed CREWs allegations and declined to take any

action against the Secretary. Yet, after a fatally flawed seven-month process driven by an

objectively biased chairman (Dan Grossman) and later joined by an objectively biased

commissioner (Rosemary Marshall), a Commission hearing devoid of evidence of the

Secretarys misconduct, no fair notice of the legal allegations that the Secretary faced, and a

convoluted legal rationale, the Commission nonetheless found that the Secretary breached the

1C.R.S. 24-9-105(1) (emphasis added).


3/58

3

public trust for private gain in using public funds for personal and political purposes related to

the manner in which he spent $1,396.89 from his $5,000 annual discretionary fund in FY2011-

12.

2

In a 3-to-2 vote, the Commission also double penalized the Secretary.

3

The Commission did this after flatly and arbitrarily refusing to permit the Secretary to

call key witnesses to his defense, including all but one of the former living secretaries of state

and none of the other current statewide elected officials who also have the same discretionary

fund. The Commission denied the Secretarys request, even after he represented to the

Commission that the testimony from these current and former statewide elected officials would

show that the Secretarys discretionary expenditures were consistent with past agency practices

and their interpretations of the discretionary-fund statute4 the same statute that the Commission

held that the Secretary violated. The Commission, comprised of five commissioners with no

accounting or auditing experience, even denied the Secretarys request to call an expert in

Colorado government accounting, who the Secretary represented to the Commission would

provide expert testimony on government accounting standards and testify that the Secretarys

expenditures were acceptable under those standards.5In other words, the Commission severely

limited the Secretarys ability to prove that how he spent his discretionary fund was in line with

the law, agency precedent, and government accounting standards.

In addition to violating Amendment 41 and the explicit language in the enabling statute

by asserting jurisdiction, the Commission also violated the discretionary-fund statute itself by

2IEC Decision, R. 1352-58.3See id.4C.R.S. 24-9-105(1).

5See6/7/2013 Legal Brief Regarding the Probative Value of Opinion Testimony by AuditingExpert Kevin F. Collins (R. 1289-1294);see alsoR. 6/7/2013 Hearing Transcript, vol. #1, pgs.253-254 (Commissions order denying Secretarys request to call expert witness).


4/58

4

substituting its own judgment for the Secretarys in interpreting appropriate uses of his annual

discretionary fund.6This statute explicitly grants to the Secretary not the Commission the

ability to use state funds for official business as he sees fit.

7

And even the counterpart to the

statute on which the Commission hangs the Secretarys ethical violation contemplates that the

Denver District Attorney not the Commission enforces any violation, in addition to any

criminal action which may be brought against such public official . . . . 8The Denver District

Attorney considered and declined to bring such criminal action. Yet the Commission found an

ethical violation, based upon CREWs same criminal complaint. The Commission even relied

upon the state fiscal rules in finding the Secretarys ethical violation, even though the State

Controller indisputably testified that the fiscal rules did not apply to the Secretarys annual

discretionary fund. And the Commission found that the Secretary misspent money from his

discretionary fund, even though the Colorado Legislative Audit Committee declined any audit.

Reasonable observers could see that the Commission, driven by two objectively biased

commissioners (Grossman and Marshall), did not want this exculpatory evidence to get in the

way of their preordained determination that the Secretary violated some law, any law even if

the Commission had to devise a convoluted legal rationale to find such a violation. Moreover,

the Commission used a double standard when it comes to political activity. On one hand, the

Commission represents to the Court that commissioners political contributions to the

Secretarys political adversaries do not raise ethical concerns, because the contributions are

minor and made to a friend. Yet on the other hand, the Commission found it unacceptable

6SeeC.R.S. 24-9-105(1).7See id.

8CompareC.R.S. 24-18-103(1) withC.R.S. 24-18-103(2).


5/58

5

for the Secretary to use state discretionary funds to attend an accredited CLE because the

conference was political. To say the least, the Commission uses malleable legal standards to

achieve the end it seeks.

The Commission also fails to address an overall appearance problem that Grossmans

and Marshalls objectively biased participation could have helped convince the other

commissioners to vote against the Secretary. Indeed, the Commissions own response

contemplates the likely possibility that commissioners influence each other before key votes

apparently even outside of the sunlight of open meetings.9

The Commissions conclusions were politically driven, and they did not follow even

basic legal standards. After watching this case, even a former Democratic state legislator wrote

that the Commission is a joke and the proceedings against the Secretary were nonsense.10

In seeking this Courts ruling on whether to set aside the Commissions decision and

penalty, the Secretary makes the following arguments:

1. The Commission has made three false representations to the Court, which

calls into question the Commissions credibility.

A. The Commission misrepresents to the Court that the Secretary neverrequested fair notice of the legal allegations he faced.

B. The Commission falsely claims harmless error in the final vote, but itconceals the Commissions assessment of a double penalty by a 3-to-2 vote,with two biased commissioners forming the majority.

9SeeResponse, at 28-29 (The Secretary . . . ignores the likely possibility that [Marshall]conferred with other members of the panel before deciding to join the order [denying the motionto dismiss].).10Miller Hudson, The Ethics Commission: What a joke!, The Colorado Statesmen, available atwww.coloradostatesman.com/content/994214-ethics-commission-what-joke (last visited Jan. 10,2014).


6/58

6

C. In its attempt to retroactively rewrite the criminal complaint, theCommission misrepresents to the Court that CREW alleged violations ofethical duties.

2. The Commission misstates the facts and law in responding to the Secretarysrecusal argument that two of the five commissioners showed bias.

A. The Commission misstates the facts and law in responding to theSecretarys recusal argument that Marshall showed bias.

B. The Commission misstates the facts and law in responding to theSecretarys recusal argument that Grossman showed bias.

C. The Commissions harmless-error analysis is legally flawed and basedupon a factual misrepresentation.

3. The Commission exceeded its jurisdiction by using the term other standards

of conduct to penalize the Secretary for his expenditures from his annual

discretionary fund.

A. The Court should not simply defer to the Commissions unreasonableinterpretation of its jurisdiction.

B. The Commission does not have the power to assert supervisory power overspending by executive branch officers; Colorado law expressly allocates

that power among other state entities.

C. The Commission improperly found that the Secretary violated a statute,even though that statute creates no legal duty for the Secretary to violate.

4. The Commission fails to respond to the Secretarys other arguments

that the Commission violated his due-process rights to fair notice of the

legal allegations against him and a fair hearing on those allegations.

A. The Secretary received no fair notice that he risked running afoul ofAmendment 41 and the enabling statute by using his discretionary fund.

B. The Commission never provided the Secretary with pre-hearing notice ofthe legal allegations that he faced, and the Commission now falsely

represents to this Court that the Secretary never made any formalrequest[] for a more definite statement or something similar.

C. The Commission misleads this Court about the Secretarys ability to callkey witnesses.


7/58

7

D. The Commission fails to respond to the Secretarys legal argument that theCommission assumed an improper prosecutorial role by penalizing theSecretary after finding he violated legal duties separate from the criminal

statutes cited in CREWs criminal complaint.

5. All of the evidence demonstrates that the Secretary properly spent his

discretionary funds, and the Commission fails to cite to any evidence of how

the Secretary violated any legal duty.

6. The Commission violated the Secretarys First Amendment rights to speech

and assembly by utilizing a vague and overbroad standard and penalizing the

Secretary for using his discretionary fund to attend a state-approved CLE

simply because a Republican organization sponsored the CLE.

* * *

Ultimately, this case is about whether the Court permits the Commission to act as a

super-tribunal, empowered to review any action by any employee in any governmental entity,

while bending and twisting basic concepts of fairness and due process to achieve the outcome it

wants. In its response, the Commission does not even attempt to supply any limiting principle for

its overly broad assertion of jurisdiction under Amendment 41s and the enabling statutes other

standards of conduct language. Under the Commissions legal theory, it has jurisdiction over

every alleged violation of any legal standard apparently so long as the Commission simply

slaps an ethics label on it. And the Commission itself believes it is the ultimate arbiter of what

constitutes ethics.

One hopes that the Star Chamber remains a historical footnote. But the Commissions

actions show the dangers of a secretive and biased panel, asserting unlimited jurisdiction, and

unwilling to follow procedural safeguards painfully established over time and clearly set out in

Colorado statute for virtually every other state agency. In fact, the Secretary made numerous

requests for the Commission to follow the rules well established by Colorado statute and


8/58

8

agency precedent that virtually every other state agency follows.11The Commission ignored

the Secretarys reasonable request, instead choosing to follow its own novel, vague, and

inconsistent rules and procedures.

12

Clearly, the voters of Colorado never intended to create such

a monster in passing Amendment 41. The Secretary requests that this Court rein in this state

agency that acts without legal, procedural, or ethical restraint.

Argument

1. The Commission has made three false representations to the Court, which

calls into question the Commissions credibility.

As a preliminary matter, three of the Commissions representations to this Court are false

and call into question the Commissions credibility. Unfortunately, correcting the record requires

somewhat lengthy discussion.

A. The Commission misrepresents to the Court that the Secretary neverrequested fair notice of the legal allegations he faced.

The Secretary argues that the Commission never provided him with fair notice of the

legal allegations he faced. The Commission makes an obvious misrepresentation to the Court

when it states that the Secretary never requested such notice. Specifically, the Commission

represents to the Court the following:

Although the Secretary states that he asked the IEC to identify the charges againsthim, he does not provide any citations to the record, nor does the record revealany formal requests for a more definite statement or something similar.13

11SeeC.R.S. 24-4-105;see also, e.g., 2/14/2013 Motion to Delegate to ALJ (R. 736-768, at 28-31); 2/22/2013 Amended Motion to Delegate to ALJ (R. 811-847, at 31-35); 5/2/2013 RenewedMotion to Delegate to ALJ (R. 917-929, at 10, 29-31) (three examples of the Secretarysfailed request of the Commission to follow Colorado administrative rules established by C.R.S. 24-4-105).12See id.(comparing C.R.S. 24-4-105 with the Commissions rules and procedures).13Response, at 23 (emphasis added).


9/58

9

The Commission ignores large parts of the record, because the Secretary consistently,

repeatedly, and sometimes even aggressively requested that the Commission provide the

Secretary with fair notice of the legal allegations he faced.

As this Court is aware, the Secretary sought a preliminary injunction against the

Commission, in part because the Commission provided inadequate legal notice of the charges. In

response, on February 7, 2013, Lisa Brenner Freimann assured the Court that the Commission

would provide the Secretary such pre-hearing notice of the legal allegations that he faced.14

Relying on this representation, the Court stated:

What I hear the Commission saying is that they are very sensitive to thein thiscase, Mr. Gesslers due process rights. Theyre certainly going to let him knowwhat it is he is alleged to havewhat standard of conduct he is alleged to haveviolated if, in fact, it gets that way.15

But this simply never happened; the Commission never provided the Secretary with pre-hearing

notice of the legal allegations he faced.

And it certainly was not for lack of the Secretarys asking, as the Commission now

falsely represents. In fact, the Secretary made many more and repeated (futile) attempts to obtain

from the Commission fair notice of the legal allegations that he faced.

The Secretarys opening brief even specifically quotes an early example:

On December 20, 2012, the Secretary filed with the Commission a motionto 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. To

14SeeOpening, at 35-36 (quoting transcript of the 2/7/2013 preliminary-injunction hearing).15Id., at 36 (quoting 2/7/2013 Hearing Transcript, at 84:15-21).


10/58

10

hold 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. 215).

The motion continued, To be precise, if CREW . . . does not allegecriminal violations after citing in its complaint three specific criminal statutes it is entirely unclear what CREW alleges. The Secretary has no notice or ability todefend himself against evolving and unspecified allegations. 12/20/2012 Motionto Dismiss, at 13-14.16

* * *

Moreover, other examples of the Secretarys requesting notice of the legal allegations he

faced include the following seven requests:

1. 1/7/2013 IEC Meeting on Case No. 12-07 (R. Transcript at 15:20-16:7):

[DEPUTY SECRETARY OF STATE SUZANNE STAIERT]: We dont know whether[CREWs] complaint is about Secretary Gesslers activity. We dont know whether thecomplaint is about the adoption of our fiscal rules. We dont know whether the complaintis about our accounting processes. We dont know whether the complaint is criminal innature.

The complaint is so vague that we would have no idea what that defense is in thismatter. And so whether this is a defense against Secretary Gessler, or whether this is adefense against the entire department has been made completely unclear, and has notbeen cleared up at the last meeting.

2. 1/7/2013 IEC Meeting on Case No. 12-07 (R. Transcript at 38:17-24, 41:5-9, 76:18-

21, 83:11-16, 96:24-98:14, 105:13-106:11):

[MICHAEL DAVIS, COUNSEL TO THE SECRETARY]: [T]o the extent that EthicsWatch is somehow making noncriminal allegations, it is entirely unclear what EthicsWatch is alleging. The Secretary has no way of defending himself against vague andundefined allegations. And by interpreting Amendment 41s, quote, other standards ofconduct, unquote, to include undefined allegations, the Commission violates theSecretarys right to a fair hearing.

16Response, at 23.


11/58

11

* * *

[E]ven if the Commission were to consider Ethics Watchs complaint under some vagueand undefined other standards of conduct, it is entirely unclear how the Secretary would

have committed an ethics violation.

* * *

[I]f you interpret the other standards of conduct to include noncriminal allegations, wehave no idea what they are. They are not stated.

* * *

[B]y interpreting other standards of conduct to include undefined allegations, thecomplaint violates the Secretarys right to a fair hearing. The point is, we dont know

what were defending against, and that is fundamentally unfair.

* * *

[MR. DAVIS:] [T]his goes to the bigger problem that the Commission is obviouslystruggling with, which is, this complaint is very vague. And if you guys cant figure outwhat theyre alleging, put yourself in Mr. Gesslers shoes, where he is trying to defendagainst a complaint that is completely vague, and they cant even stand behind their facts,which is required by the Commission rules.

From the discussion right here today, it sounds like you guys are denying themotion to dismiss. So apparently you guys are asserting criminal jurisdiction? Becausethe motion to dismiss was based upon the fact that you guys lack criminal jurisdiction.But that was denied four to nothing. So all four of the commissioners believe you havecriminal jurisdiction. Is that a fair reading of todays vote?

CHAIRMAN GROSSMAN: Were getting beyond the scope. So well go ahead andclose, but thats not what were saying. Well issue a written order on the fact of theCommissions denial of your motions today.

MR. DAVIS: And what are we supposed to what are the allegations? I understand thatthere are factual allegations. What specific laws are you alleging the Secretary violated?We dont know. How can we defend if we dont even know what they are alleging heviolates? He spent money here, and he spent money there. Well, great. Those are factualallegations. What are the violations? We see three criminal statutes.

CHAIRMAN GROSSMAN: Mr. Davis, first we have to go through the investigation.

MR. DAVIS: I understand, but we have to respond in the meantime.


12/58

12

CHAIRMAN GROSSMAN: You also have to respond to the investigation, and you andyour client will have ample opportunities to challenge at every opportunity the allegationsagainst your client.

Lets can I move on from that.

* * *

MR. DAVIS: When are we going to find out what the specific allegations are against theSecretary, meaning, is the Commission going to give us an order saying that, This is whatyou have to defend against? When is that going to happen?

CHAIRMAN GROSSMAN: All I can tell you is the next thing that will happen will bethe investigation. And there will be a report of the investigation. That should serve as aguide to the allegations against your client in further proceedings going forward.

There may be at some point some sort of a prehearing order by the Commission tokind of set forth what the issues are. Im sure there would be pleadings from you all andmore motions practices from you all as the issues move forward.

The only thing I can commit to at this point, Mr. Davis, is we will conduct aninvestigation, and that investigation will probably shed a lot of light on the questions thatyouve been asking. It will give us an opportunity to figure out what the facts andcontentions are and what the legal issue are.

3. 2/14/2013 Motion to Delegate to ALJ (R. 736-768), at 2; 2/22/2013 Amended Motion

to Delegate to ALJ (R.811-847), at 28 (emphasis in the original):

Following further deliberation and argument by counsel [at the January 7,2013 meeting], the Commission voted to fully deny the Secretarys motion todismiss. [See1/7/2013 IEC Hearing Transcript, at] 80:3-108:7. The Secretarymaintains that the Commission acted arbitrarily and contrary to the law in denyingthe Secretarys motion to dismiss. The Secretarys counsel asked the Commissionwhen the Secretary would learn the specific legal allegations against him. See id.105:11-18. The Chairman [Dan Grossman] stated that the Commission wouldconduct an investigation and issue a report and potentially a prehearing order. Seeid. 105:19-106:4. He continued:

The only thing that I can commit to at this point, Mr. Davis, is wewill conduct an investigation, and that investigation will probablyshed a lot of light on the questions that youve been asking. It willgive us an opportunity to figure out what the facts and contentionsare and what the legal issues are.

Id.106:5-11 [emphasis in original submission to the Commission].


13/58

13

In other words, the Commission has found CREWs complaint non-frivolous and is moving forward with an investigation while it admits it has notidentified a standard of conduct the Secretary is alleged to have violated.

4. 2/14/2013 Motion for Independent Investigator, (R. 779-794), at 8:

The Commission voted during [the November 5, 2012] meeting to moveforward with CREWs criminal (or some other vague legal) allegations. Theytook this stance, even though Commissioners expressed concern about thevagueness of the Complaint and confusion over their own jurisdiction. And theytook this stance, even though the Commissions rules specifically allow theCommission to defer a frivolous determination until after a preliminaryinvestigation of the complaint by the staff of the Commission. IEC Rule 7(F).With the presidential election the next day, it was unclear why the Commission

did not appreciate that prudence may require a short investigation, as permitted bythe Commissions rules, before proceeding with what they considered as vagueallegations against the states chief election officer in a hotly contested swingstate.

5. 2/14/2013 Motion for Independent Investigator, (R. 779-794), at 12:

The Commission refused to grant the Secretarys request to have CREWamend its Complaint to include non-criminal legal allegations. Instead, theCommission effectively instructed the Executive Director to go find theSecretarys potential legal violations, separate from what CREW alleged in itsComplaint. By doing this, the Commission inappropriately allowed the ExecutiveDirector to assume a biased prosecutorial role, in violation of Colorado law. . . .And this fishing expedition will likely result in new Commission-driven legalallegations in the Executive Directors report scheduled for release on February15, 2013, four months after CREW submitted its initial complaint allegingpotential violations of three criminal statutes.

6. 5/2/2012 Motion in Limine and Motion to Strike (R. 930-936), at 2, 4-5, 4-6, 9-11

(emphasis in original submission to the Commission):

At the January 7, 2013 hearing, the Commission denied the Secretarysmotion to dismiss. . . . Since this time, the Commission has refused to tell theSecretary what legal allegations he faces. In other words, the Secretary still doesnot know what law or laws that he allegedly violated.

. . .

On April 30, 2013, the Commission stated the Secretary may or may not


14/58

14

have violated five different civil statutes and five different fiscal rules, all ofwhich are subject to change depending on the evidence presented, and thearguments made, at the hearing in this matter. In other words, the legal standardsagainst which the Secretary must defend arestill unknown, will remain unknown,

and may even change, until afterthe Secretary puts on his defense at his hearingon June 7, 2013.

. . .To the extent that CREW is not making criminal allegations, the Secretary

argued, . . . the legal allegations against the Secretary are vague and undefined.They remain this way. . . . Moreover, the Secretary argued that since CREWssubmission of its complaint, the Commission has refused to tell the Secretarywhat legal allegations he faces (other than the three criminal allegations inCREWs complaint). In other words, the Secretary still does not know what lawor laws that he allegedly violated.

. . . By continuing its refusal to specify what legal allegations the Secretarymust face at the June 7, 2013 hearing, the Commission is continuing to violate theSecretarys constitutional right to due process and a fair hearing. The Secretaryargued this extensively in his December 20, 2012 motion to dismiss andnumerous hearings since then. The Commission has refused to follow the rule oflaw; instead, the Commission is effectively laying the groundwork to ensure thatit has every conceivable way to find a violation at its June 7, 2013 hearing. Seealso, Transcript of Proceedings 5/6/2013, pg. 89, 11.8-14.

7. 6/12/2012 Written Closing Argument (R. 1341-1351), at 3, 4:

On April 30, 2013, however, the Commission listed five different civilstatutes and five different fiscal rules, any or all of which may or may not serveas the legal standard(s) in this case. Neither CREW nor the Commission hasalleged that the Secretary violated these legal standards, let alone how theSecretary even could have violated these legal standards. In other words, there arenot even legal allegations made against the Secretary in IEC Case No. 12-07.

* * *

Contrary to the Commissions obviously false representation to the Court, the record

reveal[s] [numerous and repeated] formal requests for a more definite statement or something

similar17 starting from the Secretarys very first substantive written submission (motion to

17SeeResponse, at 23.


15/58

15

dismiss) on December 20, 2012 through his written closing argument on June 12, 2013. With

such obvious and overwhelming evidence contradicting the Commissions false representation to

the Court on this critical legal issue, the Commissions arguments to the contrary smack of

gamesmanship. Under any reasonable interpretation, the Secretary repeatedly and consistently

requested more definite and concrete allegations.

B. The Commission falsely claims harmless error in the final vote, but itconceals the Commissions assessment of a double penalty by a 3-to-2 vote,with two biased commissioners forming the majority.

The Secretary argues that he presented prima facie evidence demonstrating that two of

the five commissioners (then-Chairman Dan Grossman and Commissioner Rosemary Marshall)

had an objective bias against the Secretary, and that the Commission committed reversible error

by not recusing them. The Commission now raises harmless error as a defense, claiming that

even if Grossman and Marshall were biased, their participation did not change the outcome

because the Commission voted against the Secretary by a vote of either 4-to-1 ($117.99) or 5-to-

0 (all other issues). Thus, according to the Commission, the Secretary would have lost, even

without one or more of Grossmans and Marshalls votes.18

As discussed below, the Commissions legal standard is wrong, because biased

commissioners influence other commissioners and taint the overall integrity of the proceedings.

But the Commission also makes a key factual misrepresentation: The Commissions

response incorrectly states that Commissioner Sally Hopper joined the Commissions 4-to-1

vote, with just Commissioner Matt Smith dissenting, in imposing the double penalty (an

18SeeResponse, at 31-32.


16/58

16

additional $1,396.89).19In fact, Commissioner Hopper also joined in the dissent, with the biased

commissioners forming a partisan, 3-to-2 majority.20Thus, the Commissions response fails to

address in its harmless-error analysis the fact that without both of Grossmans and Marshalls

votes, the double penalty would have either failed 2-to-2 or 1-to-2. 21In other words, under the

Commissions own overall simplistic and legally flawed analysis, the Secretary was harmed by

$1,396.89 in economic damages alone, separate from any other damages to his liberty interests,

when the Commission imposed the double penalty with two objectively biased commissioners

voting for it.

C. In its attempt to retroactively rewrite the criminal complaint, theCommission misrepresents to the Court that CREW alleged violations ofethical duties.

For its complaint, CREW merely submitted a copy of a letter and a supplemental letter

that it also sent to the Denver District Attorney, citing a felony and two misdemeanor statutes

that the Secretary may have implicate[d] through his expenditure of state funds. CREWs

complaint never mentioned any ethical duties.22

The Commission, however, now represents to the Court that [i]n the Complaint, CREW

alleged that the Secretary engaged in conduct that violated his ethical duties as a public official

in three ways.23This is simply not true.

The Commissions ethics complaint representation is no accident; indeed, as discussed

below, the Commission seems to argue that its vague and evolving standard for its jurisdiction

19SeeResponse, at 5, n. 5.20

See IEC Decision, R. 1352-58.21See id.22Complaint (R. 1032-64).23Response, at 2 (emphasis added) (citing Complaint, R. 1032-64).


17/58

17

now at least as of December 17, 2013, when the Commission filed its response touches on

any conduct on which it can slap an ethics label. Thus, by retroactively reframing CREWs

criminal complaint as an ethics complaint, the Commissions attorneys are attempting to

cleanup the Commissions jurisdictional and fair-notice mess. This is particularly true, given the

numerous examples that the Secretary cites of the Commissions refusal to provide pre-hearing

fair notice of the legal allegations that the Secretary faced.

2. The Commission misstates the facts and law in responding to the Secretarys

recusal argument that two of the five commissioners showed bias.

The Secretary cites to specific factual allegations that amount to a prima facie case that

two of the five commissioners (Commissioner Rosemary Marshall and then-Chairman Dan

Grossman) demonstrated bias or at least, the appearance of bias against the Secretary.24The

Commission fails to even defend several actions by its commissioners, it continues to apply the

wrong standard, it advances a non-existent harmless-error theory, and it even misrepresents facts

to advance that theory.25

The Commission should have used an objective (not subjective) test to determine whether

Marshall and Grossman displayed the appearance of bias: The test for appearance of

impropriety is whether the conduct would create in reasonable minds a perception that the

administrative law judge's ability to carry out judicial responsibilities with integrity, impartiality,

and competence is impaired.26

The Colorado Supreme Court recognized inJohnson v. District Court,674 P.2d 952,

956 (Colo. 1984), that the purpose of the disqualification requirement is to prevent a party from

24SeeOpening, at 39-42.25SeeResponse, at 26-32.261 Colo. Code Regs. 104-2:2(A), Commentary.


18/58

18

being forced to litigate a matter before a judge with a bent of mind.27Both Commissioner

Rosemary Marshall and then-Chairman Dan Grossman had such a bent of mind against the

Secretary, as the Secretary argued in his opening brief, and he was forced to litigate a matter

before them when they evidenced such an appearance of bias.28

The Court utilizes the following test for recusal of judges, based upon bias or the

appearance of bias:

Ordinarily, the question of whether a judge should be disqualified in a civil case isa matter within the discretion of the trial court. However, where an attorney forone of the litigants signs a verified affidavit alleging conduct and statements on

the part of the trial judge which, if true, show bias or prejudice or the appearanceof bias or prejudice on the part of the trial judge, it is an abuse of discretion if thatjudge does not withdraw from the case, even though he or she believes thestatements are false or that the meaning attributed to them by the party seekingrecusal is erroneous. In such a case, the judge should not pass upon the truth orfalsity of the facts alleged in the affidavit, but only upon the adequacy of themotion as a matter of law. The motion and supporting affidavit speak forthemselves and the only question involved is whether the facts alleged aresufficient to compel the judge to disqualify himself. The motion and affidavits arelegally adequate if they state facts from which it may reasonably be inferred thatthe judge has a bias or prejudice that will prevent him from dealing fairly with theparty seeking recusal.29

Because Marshalls and Grossmans appearance of impropriety is as strong a basis for

disqualification as factual impropriety, it is irrelevant that the matters alleged in . . . affidavit may

not be accurate.30It is not for the Commission to decide whether it agrees with the motions

factual assertions; [t]he motion and affidavits are legally adequate because they state facts

27Goebel v. Benton, 830 P.2d 995, 998 (Colo. 1992).28

SeeOpening, at 39-42.29Goebel, 830 P.2d at 998-99 (citations and quotations omitted) (emphasis added).305 Colo. Prac., Civil Rules Annotated R 97 (4th ed.) (citing Goebel, 830 P.2d 995;Holland v.Bd. of Cnty. Comm'rs of Cnty. of Douglas, 883 P.2d 500, 503 (Colo. App. 1994).


19/58

19

from which it may reasonably be inferred that [Marshall and Grossman] ha[d] a bias or prejudice

that [would] prevent [them] from dealing fairly with the [the Secretary].31

A. The Commission misstates the facts and law in responding to theSecretarys recusal argument that Marshall showed bias.

The Secretary cites to prima facie factual allegations of Commissioner Rosemary

Marshalls objective bias against the Secretary, including her (1) confronting the Secretary

outside a public hearing, accusing him of lying, and warning him that she would keep an eye

on him; (2) rushing to vote against the Secretary in pending proceedings as her first act on the

Commission, without any evidence of being brought up to speed on the pending proceedings; (3)

inappropriately discussing with the media the merits of the Secretarys pending motion to recuse

her; (4) donating to the Secretarys 2010 political challenger; and (5) politicizing at a

Commission meeting whether the Secretary would announce a bid for governor.32The

Commission fails to respond to these arguments.

First Allegation and Argument of Marshalls Objective Bias

The Secretary cites to prima facie factual allegations that Marshall confronted the

Secretary outside a public hearing, accused him of lying, and warned him that she would keep

an eye on him.33Specifically, Andrew Cole, one of the Secretarys aides, swore to the

following:

3. In approximately late summer 2011 I attended a preliminary injunctionhearing in Denver District Court in an action commenced by Secretary of StateScott Gessler in his official capacity as Secretary of State involving the DenverClerks office. The judge denied the preliminary injunction.

31Goebel, 830 P.2d at 998-99.32See Opening, at 39-42.33See id., at 40-41.


20/58

20

4. Rosemary Marshall and Secretary Gessler also attended the preliminaryinjunction hearing.

5. After the hearing, Rosemary Marshall approached Secretary Gessler in the

hallway and stated: We know what you are all about! Ms. Marshall wasdemeaning in her tone. Secretary Gessler responded to the effect that he wassurprised by her statement because the Court action was recommended byDepartment of State staff. Ms. Marshall responded with words to the effect thatshe did not believe Secretary Gessler and that she intended to keep an eye onhim.34

In response, the Commission confusingly dismisses this factual allegation as an opinion

about her [Marshalls] subjective belief, not a fact.35

But this is not opinion; the Secretarys

aide unequivocally and clearly swore in the affidavit that he personally witnessed Marshall

confront, accuse, and warn the Secretary.36These are more than enough factual allegations to

raise a prima facie case of objective bias, and the Commission should have voted to recuse

Commissioner Marshall. The Commissions argument that these factual allegations relate to her

subjective belief (i.e., that she, in fact, does question the Secretarys motive, believe that the

Secretary lied to her, and intend[ed] to keep an eye on him) not only admit apparent bias, but

also show that Marshall demonstrated actual (subjective) bias.37Regardless of whether

Marshalls bias was actual or apparent, the law clearly requires her recusal. It simply does not

matter that she stated that she could be fair or that her fellow commissioners rallied around her

and agreed.38

The Commission relied on an improper subjective legal standard.39

Second Allegation and Argument of Marshalls Objective Bias:

34Affidavit of Andrew Cole (R. 777-778).35Response, at 29.36

SeeAffidavit of Andrew Cole (R. 777-778).37SeeResponse, at 29.38SeeResponse, at 29.39Seesupra (discussing Colorado recusal law);see alsoOpening, at 39-42 (same).


21/58

21

Next, the Secretary cites to prima facie factual allegations that Marshall rushed to vote

against the Secretary in pending proceedings on the Secretarys motion to dismiss as her first act

on the Commission, without any evidence of Marshall being brought up to speed on the pending

proceedings.40The Commission responds with three arguments.

First, the Commission argues that [t]he Secretary ignores the possibility that

Commissioner Marshall could have reviewed the motion and listened to the recording in private,

and also ignores the likely possibility that she conferred with other members of the panel before

deciding to join the order.41

The Secretary does not ignore the possibility. Rather, the Secretary assumes that

Commissioner Marshall and the Commission did not violate the Colorado Open Meetings Law

(COML) by conducting proceedings or deliberations in secret. Indeed, if Commissioner Marshall

conferred with other members of the [Commission] before deciding to join the order [denying

the Secretarys December 20, 2012 motion to dismiss], the Commission violated COML

because the Commission issued no meeting notice, nor did the Commission record any minutes

of such a meeting. The Secretary presumes that the Commission did, in fact, follow the law.

Accordingly, Marshall did not confer with others and voted against the Secretary without

understanding the merits of the matter before her.

COML states: It is declared to be a matter of statewide concern and the policy of this

state that the formation of public policy is public business and may not be conducted in secret. 42

Moreover, [a]ll meetings of two or more members of any state public body at which any public

40See Opening, at 41.41Response, at 28-29 (emphasis added).42C.R.S. 24-6-401.


22/58

22

business is discussed or at which any formal action may be taken are declared to be public

meetings open to the public at all times.43The Commission is a state public body, as it is a

board, committee, commission, or other advisory, policy-making, rule-making, decision-

making, or formally constituted body of any state agency, [or] state authority . . . to which the

state, or an official thereof, has delegated a governmental decision-making function.44Minutes

of any meeting of a state public body shall be taken and promptly recorded, and such records

shall be open to public inspection. The minutes of a meeting during which an executive session

authorized under subsection (3) of this section is held shall reflect the topic of the discussion at

the executive session.45If elected officials use electronic mail to discuss pending legislation or

other public business among themselves, the electronic mail shall be subject to the requirements

of this section.46

If Marshall conferred with other members of the panel before deciding to join the

order,47the meeting was subject to COML.48COML required the Commission to open the

meeting to the public and record minutes of this meeting.49

There is no evidence that the Commission noticed the meeting, opened the meeting to the

public, or issued any recorded minutes of Marshalls likely possib[le] confer[ence] with other

members of the panel before deciding to join the order. In fact, the Commissions records show

the following:

43C.R.S. 24-6-402(2)(a) (emphasis added).44SeeC.R.S. 24-6-402(1)(d).45C.R.S. 24-6-402(2)(d)(I).46

C.R.S. 24-6-402(2)(d)(III).47Response, at 28-29.48SeeC.R.S. 24-6-402(2)(a).49SeeC.R.S. 24-6-402(2)(d)(I) (minutes).


23/58

23

1. On December 20, 2012, the Secretary filed with the Commission his motion to

dismiss.50

2. On January 7, 2013, the Commission held oral argument on the motion, went into

executive (non-open) session, returned to open session, and orally voted to deny the motion.51

Marshall did not attend this meeting, as she had not yet joined the Commission.52

3. On January 23, 2013, the Commission held a special meeting, to discuss and

approve the draft of the order denying the Secretarys motion to dismiss.53Marshall voted to join

the draft order.54This was Marshalls first Commission meeting as a commissioner, as shown by

the fact that the Commissions own minutes state: Chairman Grossman welcomed

Commissioner Marshall to the Commission.55

50See Secretarys Motion to Dismiss (R. 215-30).51SeeIEC 1/7/2013 Minutes, available athttp://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3D364%2F693%2FMinutes+of+Jan7.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1251849503417&ssbinary=true (lastvisited Jan. 10, 2014).52See id.53SeeIEC 1/23/2013 Minutes, available athttp://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3D696%2F341%2FMinutes+of+Jan23.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1251849503458&ssbinary=true (lastvisited Jan. 10, 2014).54See id.55See id., at 3 (emphasis supplied).


24/58

24

4. The Commission posted no other notices of, or minutes from, any other meetings

between December 20, 2012 (when the Secretary filed his motion to dismiss) and January 23,

2013 (when Marshall voted to join the order denying the Secretarys motion).

56

5. Despite an obligation to conduct proceedings in public, no meeting was scheduled

for Marshall to be briefed on the issues, and the minutes of the meeting do not describe any

briefing.57

Thus, either (a) Marshall violated COML and conferred with other members of the panel

before deciding to join the order; or (b) Marshall never conferred, which creates a credibility

problem for the Commissions representation to the Court that there is a likely possibility that

the meeting occurred. Presuming that Marshall and the Commission did not violate COML,

Marshalls likely possib[le] meeting in fact never happened. This only bolsters the Secretarys

factual allegation that she rushed to vote against the Secretary in pending proceedings as her

first act on the Commission, without any evidence of being brought up to speed on the pending

proceedings.

Second, the Commission argues [i]n fact, Commissioner Smith stated in an open

meeting that Commissioner Marshall reviewed all the material prior to ruling on motions . . .

.58Whether the Secretarys factual allegation is incorrect is not the appropriate legal standard

for determining recusal.59The issue for the Court is whether the Secretarys factual allegation

that Marshall rushed to vote against the Secretary in pending proceedings as her first act on the

56SeeIEC Agenda and Minutes, available athttp://www.colorado.gov/cs/Satellite/DPA-IEC/IEC/1209461755470 (last visited Jan. 10, 2014).57SeeR. 1365.58Response, at 29 (citing 3/4/13 Meeting Minutes, R. 1371).59See Goebel, 830 P.2d at 998-99.


25/58

25

Commission, without any evidence of being brought up to speed on the pending proceedings

assuming it is true is enough, on its own or cumulatively with the other allegations of bias, to

make a prima facie showing of Marshalls objective bias, for which the Commission must have

recused her.60

Third and finally, the Commission argues that Commissioner Smith also stated that . . .

Commissioner[] Marshall . . . could be fair and impartial, andthe remaining Commissioners

concurred.61As discussed, this shows that the Commission continued to utilize the legally

incorrect subjective legal standard in determining recusal.

The Colorado Supreme Court has already squarely addressed this issue and found that it

is reversible error:

Although the trial judge is convinced of his or her own impartiality, if itnonetheless appears to the parties or the public that the judge may be biased orprejudiced, the same harm to public confidence in the administration of justiceoccurs.

62

Simply put, it does not matter what Marshall or the other commissioners subjectively

believed about her fairness; what matters is whether the factual allegations, taken as true,

objectively evidence bias or the appearance of bias. They did, and the Commission committed

reversible error by refusing to recuse Marshall.63

Third, Fourth, and Fifth Allegations and Arguments of Marshalls Objective Bias:

60See id.61Response, at 29.62Johnson, 674 P.2d at 956-57.63

See, e.g.,People v. Dist. Court In & For Third Judicial Dist., 560 P.2d 828, 831-32 (1977);Johnson, 674 P.2d at 956-57; United States v. Amico, 486 F.3d 764, 777 (2d Cir. 2007);Prestonv. United States, 923 F.2d 731, 735-36 (9th Cir. 1991);Potashnick v. Port City Constr. Co., 609F.2d 1101, 1115 (5th Cir. 1980) (reversible error for failure to recuse).


26/58

26

The Secretary also cites to prima facie factual allegations that Marshall inappropriately

discussed with the media the merits of the Secretarys pending motion to recuse her; donated to

the Secretarys 2010 political challenger; and politicized at a Commission hearing whether the

Secretary would announce a bid for governor.64The Commission fails to respond to these last

three factual allegations and the related legal arguments.65The Commission, therefore, waives

these arguments.66Any one of these last three factual allegations evidences Marshalls objective

bias and the need for her recusal. Thus, the Commission committed reversible error by refusing

to recuse Marshall, based upon any of these allegations.67

B. The Commission misstates the facts and law in responding to theSecretarys recusal argument that Grossman showed bias.

The Secretary also cites to prima facie factual allegations of then-Chairman Dan

Grossmans objective bias against the Secretary, including Grossmans (1) making campaign

contributions to the Secretarys 2010 and 2014 political challengers; (2) improperly instructing

the Commissions independent investigator to add to his investigative report, and thus

politicizing, 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; (3) potentially misleading the Commission and improperly participating in denying

the Secretary the right to learn the truth about Grossmans involvement with the potential

politicization of the Secretarys and his familys personal security; and (4) refusing to deny

64See Opening, at 40-41.65

SeeResponse, at 28-29.66SeeMoody v. People, 159 P.3d 611, 614 (Colo. 2007).67See, e.g.,People, 560 P.2d at 831-32;Johnson, 674 P.2d at 956-57;Amico, 486 F.3d at 777;Preston, 923 F.2d at 735-36;Potashnick, 609 F.2d at 1115 (reversible error for failure to recuse).


27/58

27

evidence that Grossman made sexist and derogatory comments about the Secretarys deputy,

Suzanne Staiert, referring to the Deputy Secretary of State as The Dragon Lady.68

First Allegation and Argument of Grossmans Objective Bias:

First, the Secretary cites to prima facie factual allegations that Grossman made campaign

contributions to former Secretary of State Bernie Buescher and former Senate Majority Leader

Ken Gordon, the Secretarys 2010 and 2014 Democratic challengers, respectively, for election to

the Office of the Secretary of State.69This is evidence of objective bias and the Commission

committed reversible error by refusing to recuse Grossman.70

The Commissions response dismisses the Secretarys argument by stating that [a]

minor campaign contribution to a friend does not demonstrate a bias against his political

opponent for purposes an ethics inquiry.71

As an initial matter, the fact that the Secretarys political challenger was Grossmans

friend exacerbates not mitigates Grossmans appearance of bias. It shows not only a

political connection, but also personal motivation to help the Secretarys political opponents.

Any reasonable observer would come to the conclusion that Grossmans political contributions

show that he wanted his friend to succeed politically. His friend was running against the

Secretary. The Secretary is elected. The Commissions actions were front-page news, and the

Commissions finding may be politically damaging to the Secretary. This could hurt the

Secretarys ability to win re-election and hurt his ability to succeed electorally against

Grossmans friend. Thus, Grossmans decisions in this case helped his friend politically.

68SeeOpening, at 39-42.

69SeeOpening, at 41.70See id.71Response, at 30.


28/58

28

The Commissions minor-contribution-to-a-friend argument is without merit. A judges

contribution to a litigants opponent especially one who also happens to be the judges friend

raises an appearance of bias. Colorado recusal law does not distinguish between minor and

major bias; the Commission cannot argue that it was permitted to allow Grossmans

objectively biased participation, because it was only minor.

Moreover, Grossmans campaign contributions to the Secretarys 2010 and 2014 political

challengers were not minor; they were actually major contributions, compared to Grossmans

other campaign contributions. On July 29, 2008, Grossman made a $100 campaign contribution

to Bernie Buescher, the Secretarys 2010 Democratic challenger.72But on October 30, 2006,

Grossman made a $500 campaign contribution to the late-Ken Gordon, the Democratic candidate

for Colorado Secretary of State in 2006 and the candidate who had filed paperwork to run against

the Secretary for the same job in 2014.73Further, the $500 contribution made up a very large

percentage of all of Grossmans political contributions. Grossman made up to twelve campaign

contributions as of the time the Secretary sought his recusal.74Of the twelve contributions, the

contribution to the Secretarys 2014 political challenger ($500) is the largest.75In fact, it is 250%

larger than Grossmans next-biggest contribution ($200), and it is 417% larger than Grossmans

average contribution ($120).76Grossmans contributions to the Secretarys 2010 and 2014

72SeeAffidavit of Stephen Bouey (R. 870-871).73See id.;see alsoFIVE AGAINST TWO: Dems Gang Up on Gessler for IEC Hearing,ColoradoPeakPolitics, available athttp://coloradopeakpolitics.com/2013/02/26/five-against-two-dems-gang-up-on-gessler-for-iec-hearing/ (last visited Jan. 10, 2014).74SeeAffidavit of Stephen Bouey (R. 870-871).75See id.76See id.


29/58

29

challengers comprise 42% ($600) of the twelve total identified contributions to date ($1,440).77

In other words, Grossman supported with his wallet the Secretarys political challengers. For

Grossman, the Gordon contribution was major, and the contribution showed bias against the

Secretary. Grossman and the Commission committed reversible error, for voting to deny

recusing Grossman.78

This again shows the Commissions double standard when it comes to political activity..

Second Allegation and Argument of Grossmans Objective Bias:

Second, the Secretary cites to prima facie factual allegations that Grossman improperly

instructed the Commissions independent investigator to add to his investigative report, and thus

politicize, allegations surrounding the Secretarys and his familys personal security after

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

old daughter.79

In response, the Commission argues that [t]he Secretary did not present any evidence

supporting his accusation. . . .80This is clearly incorrect, as evidenced by the May 2, 2013

affidavit submitted to the Commission by Colorado Deputy Secretary of State Suzanne Staiert.81

The relevant portion of Staierts affidavit states the following:

13. Moreover, on March 28, 2013, the Commissions independent

investigator Ellis Armistead interviewed me about Case No. 12-07. He told me

that the Chair (who was then-Chairman Dan Grossman) asked him to

investigate the Secretarys discretionary expense for the resumption of the

Secretarys monthly home-alarm monitoring service. The Secretary resumed his

77See id.78See, e.g.,People, 560 P.2d at 831-32;Johnson, 674 P.2d at 956-57;Amico, 486 F.3d at 777;Preston, 923 F.2d at 735-36;Potashnick, 609 F.2d at 1115 (reversible error for failure to recuse).79SeeOpening, at 41.80Response, at 31.81R. 896-900.


30/58

30

alarm service, following specific and credible threats of sexual violence against

his wife and four-year-old daughter last summer, directly related to the

Secretarys official duties.

14. I represented to the Commission on April 8, 2013 the following:

The investigator told me when I pointed out to the investigator, as he was askingquestions, that this was not part of the complaint, he indicated that ChairmanGrossman had told him to follow up on this issue specifically. And it not beingpart of the complaint, we find that outrageous. And I will also note that thepayment for this item had not even come -- the payment came the same day wegot the records request from the investigator. The Secretary had not even beenreimbursed for the alarm system. It was quite concerning to us that somehowpeople in the community had found out about the Secretarys security system inhis home and were now coming back this quickly, within one day of even making

the request. I mean this is the security of his house, of his family, of his wife andhis daughter. So yes, we took it very seriously. That is why I asked the question ofthe investigator, Where is this coming from? We didn't know how many peoplewere aware of what kind of security the Secretary of State has. We were told atthat time that -- the investigator said to us at that time that Chairman Grossmaninstructed him to investigate it.

Exhibit Bto Renewed and Supplement to Motion to Recuse Commissioner Dan

Grossman (Trans. of April 8, 2013 Hearing), at 43:17-44:15 (emphasis added).82

* * *

In other words, the Secretary presented this evidence to the Commission twice: (1)

through Staierts oral representation at the April 8, 2013 Commission meeting; and (2) through

Staierts May 2, 2013 affidavit. Staierts testimony is admissible, even if what the investigator

told her is hearsay.83Moreover, the Commission refused the Secretarys request to question the

investigator or Grossman on what Grossman instructed the investigator to include in his report.84

82Id.83

See, e.g., C.R.E. 803(8) and C.R.E. 807.84See4/8/13 IEC Hearing Transcript (R. 35:2-47:9). Because the transcript is extensive, theSecretary did not copy it into the brief. The Secretary requests that the Court read this excerpt inits entirety.


31/58

31

In other words, the Commission cannot now complain that the Secretary lacks certain evidence

when it refused the Secretarys request to obtain such evidence.85

The Commission also argues that Commissioner Grossman plainly stated that he gave

no such instruction.86Again, Grossmans subjective belief even if true is plainly irrelevant

for purposes of Colorado recusal law; the Commission should have simply considered the factual

allegations and determined whether they were sufficient (even if false or misleading) to

objectively make a prima facie case of Grossmans appearance of bias against the Secretary.87If

so, Grossman had to be recused.88Grossmans recusal was important because of the need for

confidence in the Commission proceedings, particularly in light of the public nature of the

proceedings.

Third Allegation and Argument of Grossmans Objective Bias:

Third, the Secretary cites to prima facie factual allegations that Grossman potentially

misled the Commission and improperly participated in denying the Secretary the right to learn

the truth about Grossmans involvement with the potential politicization of the Secretarys and

his familys personal security.89The Commission incorrectly represents to the Court that [t]he

Secretary did not make his remaining arguments regarding Commissioner Grossmans bias

below, and has therefore waived them.90The Commissions claim is false. In fact, the Secretary

85SeeRichardson v. Richardson, 236 P.2d 121, 127 (1951) (party cannot complain about aproponents lack of evidence, when the party denied the proponent the ability to obtain suchevidence).86Response, at 31.87

SeeGoebel, 830 P.2d at 998-99.88See id.89SeeOpening, at 41-42.90SeeResponse, at 11.


32/58

32

raised his argument in his renewed motion to recuse Grossman, submitted to the Commission on

May 2, 2013.91The Commission cannot pretend that it never heard these arguments.

Fourth Allegation and Argument of Grossmans Objective Bias:

The Secretary also cites to prima facie factual allegations that Grossman refused to deny

evidence that Grossman made sexist and derogatory comments about the Secretarys deputy,

referring to the Deputy Secretary of State as The Dragon Lady.92

In response, the Commission states as follows:

The Staiert affidavit does not even concern the Secretary directly, and to the

extent it may relate to him indirectly, it is based on speculation and hearsay. Thetranscript fails to show bias, and actually supports Commissioner Grossmansimpartiality.93

A reasonable observer could conclude that Grossmans derogatory comments to, and hostility

toward, the Secretarys representative, deputy, and legal-team member objectively shows

contempt toward the Secretarys due-process rights and a bias toward the Secretary.

Finally, like it did for Marshall, the Commission argues that Commissioner Smith also

stated that . . . Commissioner[] Grossman . . . could be fair and impartial, andthe remaining

Commissioners concurred.94Like Grossman and Marshall, the Commission continued to use

the incorrect legal standard to determine recusal.95It simply does not matter what Smith or the

other commissioners subjectively believed about Grossmans fairness; what matters is whether

91See5/2/2013 Renewed and Supplement to the Motion to Recuse Commissioner Dan GrossmanDue to the Appearance of Bias (R. 917-929).92

SeeOpening, at 42.93Response, at 31.94Response, at 29.95SeeGoebel, 830 P.2d at 998-99.


33/58

33

the factual allegations, taken as true, objectively show bias or the appearance of bias.96They did,

just as they did with Marshall, and the Commission committed reversible error by refusing to

recuse Grossman.

97

The Secretary has cited ample evidence showing Marshalls and Grossmans bias. And

there can be no doubt of the ongoing appearance of bias. But recitation of the transcript does not

fully capture the injustice committed by the Commission. Rather, the Commissioners tone and

behavior is important to understand, and the Secretary urges the Court to listen to just two tape

excerpts that demonstrate the Marshall and Grossmans hostility and bias:

(1) Marshalls politicization of whether the Secretary had announced his bid forgovernor;98and

(2) Grossmans reaction to the Secretarys allegation that he improperly instructed theCommissions independent investigator to add to his investigative report, and thuspoliticize, allegations surrounding the Secretarys and his familys personalsecurity following specific and credible threats of sexual violence against theSecretarys wife and then-four-year-old daughter.

99

Separately, the affidavits of Department of State employees Stephen Bouey100and

Andrew Cole101show an appearance of bias. Accordingly, the Secretary met his prima facie

burden for Marshalls and Grossmans recusal.102

96See id.97See, e.g.,People, 560 P.2d at 831-32;Johnson, 674 P.2d at 956-57;Amico, 486 F.3d at 777;Preston, 923 F.2d at 735-36;Potashnick, 609 F.2d at 1115 (reversible error for failure to recuse).98Recording of 6/13/2013 IEC Meeting, Comments of Commissioner Rosemary Marshall,CIC_20130613-1137_01ce6819c6fbb9a0, at 5:05-11:58.99Recording of 4/8/2013 IEC Meeting, Comments of Chairman Dan Grossman, 04-08-13-mtn_realarm.system, at 00:01-16:1.100R. 870-871.101R. 777-778.102See C.R.S. 24-4-105(3);see alsoMoody, 159 P.3d at 614.


34/58

34

The Secretary firmly argues that Commissioners Grossman and Marshall were heavily

biased against him. But Colorado law required the recusal of those two commissioners in the

underlying case before the Commission and any other matter involving the Secretary because

their impartiality might reasonably be questioned.103[I]t [was] an abuse of discretion [when

the two commissioners did] not withdraw from the case, even though . . . [they] believed [the

affidavits] are false or that the meaning attributed to them by the [Secretary was] erroneous.104

The Commission should not [have] pass[ed] upon the truth or falsity of the facts alleged in [the

affidavits].105Thus, the Commission committed reversible error in its refusal to recuse Marshall

and Grossman.106

C. The Commissions harmless-error analysis is legally flawed and basedupon a factual misrepresentation.

The Secretary argues that the Commission committed reversible error when it voted to

deny the Secretarys many motions to recuse two of the Commissions five commissioners

(Grossman and Marshall) for bias. The Commission responds that any error in the Commissions

refusal to recuse Grossman and Marshall was harmless, as the Commission would still have

voted against the Secretary, 2-to-1 on the $117.99 reimbursement and 3-to-0 on all other issues if

Grossman and Marshall did not vote.107

But again, the Commissions legal analysis is based upon a misrepresented fact: The

Commission voted 3-to-2 (not 4-to-1) to impose the double penalty. Thus, the double penalty

103See1 Colo. Code Regs. 104-2(C)(1)(a) (shall disqualify).104Goebel, 830 P.2d at 998-99.105

Id.106See, e.g.,People, 560 P.2d at 831-32;Johnson, 674 P.2d at 956-57;Amico, 486 F.3d at 777;Preston, 923 F.2d at 735-36;Potashnick, 609 F.2d at 1115 (reversible error for failure to recuse).107SeeResponse, at 31-32.


35/58

35

would have failed under the Commissions own harmless-error analysis, either 2-to-2 or 1-to-2,

if Grossman or Marshall (or both) recused.

Moreover, the Commissions legal analysis is flawed. In making its harmless-error

argument, the Commissions simplistic vote-counting argument ignores the fact that tribunals

generally cannot proceed with actually or apparently biased judges, as they taint the proceedings

and undermine the appearance of propriety.108Indeed, the Colorado Supreme Court has long

held that:

[b]ecause appearances can be as damaging to public confidence in the courts as

actual bias or prejudice, a trial judge must scrupulously avoid any appearance ofbias or prejudice.109

The Commissions harmless-error analysis also ignores that the commissioners

participated in discussions, had an impact on others thinking, voted on what evidence could and

could not be introduced, and questioned witnesses, including the Secretary. Limiting the analysis

to just simply the final vote ignores 99% of their participation in the proceedings.

Finally, Grossmans and Marshalls objectively biased participation could have helped

convince the other commissioners to vote against the Secretary. Indeed, the Commissions own

response contemplates the likely possibility that commissioners influence each other before

key votes apparently even outside of the sunlight of open meetings.110

108See, e.g.,People, 560 P.2d at 831-32;Johnson, 674 P.2d at 956-57;Amico, 486 F.3d at 777;Preston, 923 F.2d at 735-36;Potashnick, 609 F.2d at 1115 (reversible error for failure to recuse).109People, 560 P.2d at 833 (citing Commonwealth Coatings Corp. v. Continental Casualty Co.,393 U.S. 145 (1958)).110SeeResponse, at 28-29 (The Secretary . . . ignores the likely possibility that [Marshall]conferred with other members of the panel before deciding to join the order [denying the motionto dismiss].).


36/58

36

3. The Commission exceeded its jurisdiction by using the term other standards

of conduct to penalize the Secretary for his expenditures from his annual

discretionary fund.

A. The Court should not simply defer to the Commissions unreasonableinterpretation of its jurisdiction.

For the proposition that the Commissions jurisdiction is limited to enforcing the gift ban,

lobbying ban, and ban on influence peddling, the Secretary cites Amendment 41s plain

language, the Bluebook language that shows voter intent, the enabling statutes111explicit

limitation of the Commissions jurisdiction, and the Colorado Supreme Courts confirming

language in theDevelopmental Pathways

112

decision.

113

The discretionary fund is not a gift, and

the Secretary cannot influence himself.114In other words, the Commission is the wrong agency

and without power to determine whether the Secretary properly spent $1,396.89 from his

$5,000 discretionary fund in FY2011-12.

The Commission sidesteps most of the Secretarys arguments and attempts to reframe the

jurisdictional analysis. First, it merely invokes the ambiguous term ethics issues by arguing

that [t]he clear and unambiguous language of both Article XXIX [Amendment 41] and the

IECs enabling statute [C.R.S. 2418.5101] . . . provide that, in addition to the gift ban, the

IEC has jurisdiction over ethics issues arising under other standards of conduct.115These

phrases are so expansive as to be overly broad and meaningless. Indeed, this was the point of

Developmental Pathways.

111C.R.S. 2418.5101.112

178 P.3d at 526.113See Opening, at 9-14.114See id., at 16-18.115Response, at 8 (emphasis added).


37/58

37

Second, the Commission asserts that it regularly and consistently has exercised

jurisdiction over ethics issues arising under standards of conduct other than those contained in

Article XXIX.

116

But flawed, illegal behavior in the past is no justification for flawed, illegal

behavior against the Secretary. Amendment 41 and its enabling statute specifically preclude the

Commission from simply slapping an ethics label on any complaint and asserting jurisdiction,

when the complaint does not have anything to do with the gift ban, lobbying ban, or ban on

influence peddling. In other words, the Commission has regularly and consistently ignored its

jurisdictional limitations plainly stated in Amendment 41 and the enabling statute. An agency

cannot reward itself with more power by regularly and consistently ignoring legal limitations

placed on its power.

Finally, the Commission demands that this Court defer to its legal interpretation, broadly

asserting that [a]ppellate courts . . . defer to an agencys interpretation of its own enabling

statute.117Thus, the Commission argues, the Court should simply defer to the Commissions

interpretation.118

But Colorado law, including the Commissions cited cases, does not support the

Commissions expansive view regarding agency deference. The Colorado Supreme Court has

held: We give considerable weight to an agencys reasonable interpretation of its own enabling

statute, but we are not bound by its legal interpretations.119We defer to an agencys

interpretation in construing constitutional provisions and statutes relevant to its activities, and

116Id.117Id., at 7 (citing Specialty Restaurants Corp. v. Nelson, 231 P.3d 393, 397 (Colo. 2010)).118

See id., at 8-9 (Deference should be given to an agencys interpretation in construingconstitutional provisions and statutes relevant to its activities.).119Specialty Restaurants Corp. v. Nelson, 231 P.3d 393, 397 (Colo. 2010) (emphasis added)(citation omitted).


38/58

38

rules the agency has promulgated, but its interpretation is not binding.120When construing a

constitutional amendment, courts must ascertain and give effect to the intent of the electorate

adopting the amendment. . . . If that intent is not clear from the language of the amendment,

courts should construe the amendment in light of the objective sought to be achieved and the

mischief sought to be avoided by the amendment.121[D]eference would not be appropriate if

the [agencys] statutory interpretation would defeat the General Assemblys intent in enacting

the statute or is contrary to the plain meaning of the statute.122

The Commissions interpretation of its power is unreasonable: it is contrary to the plain

language and intent of Amendment 41 and its enabling statute, it erroneously dismisses the

Colorado Supreme Courts decision inDevelopmental Pathways, it is inconsistent with prior

agency interpretation, and it is in no way binding on the Court.

Critically, the Commission fails to respond to the Secretarys argument that the

Commissions enabling statute specifically limits the Commissions jurisdiction to cases

involving any money, forbearance, forgiveness of indebtedness, gift, or other thing of value

given or offered by a person seeking to influence an official act that is performed in the course

and scope of the public duties of a public officer.123

This provision applies to any complaint

filed under article XXIX.124The Commission simply ignores this argument, for the simple

120Colorado Citizens for Ethics in Gov't v. Comm. for Am. Dream, 187 P.3d 1207, 1214 (Colo.App. 2008) (emphasis added).121Colorado Citizens for Ethics in Govt, 187 P.3d at 1215 (citation omitted).122

Bd. of Cnty. Commrs of Cnty. of San Miguel v. Colorado Pub. Utilities Commn, 157 P.3d1083, 1089 (Colo. 2007).123Opening, at 12 (quoting C.R.S. 24-18.5-101(5) (emphasis added)).124C.R.S. 24-18.5-101(5)(a) (emphasis added).


39/58

39

reason that it cannot present any coherent legal justification for exceeding its jurisdiction.

Accordingly, the Court should not simply defer to the Commissions assertion of jurisdiction.

The Commission also ignores the Colorado Supreme Courts plain language in

Developmental Pathways. There, the Court stated that the enabling statute confirm[ed] the

existence of a nexus between the gift ban provisions and the receipt of gifts in violation of the

public trust for private gain.125The Commission argues that the Court reviewed only the

constitutionality of the gift ban; it did not address any issues related to the IECs jurisdiction.126

This is wrong; the Court addressed the enabling statute, which expressly limits the Commissions

jurisdiction. That enabling statute applies to any complaint filed under article XXIX.127The

Commission has simply chosen to ignore this jurisdictional limitation.

The Commission argues that it is not bound by the representations made by Governor

Ritter inDevelopmental Pathwayrelated to the jurisdictional reach of Amendment 41, because

the Commission was not in existence at the time.128But this argument only helps demonstrate

why the Court should not give agency deference to the Commissions overly broad interpretation

of its power. The Supreme Court inDevelopmental Pathwayshas already ruled that Governor

Ritter was a proper representative of the Commission and a proper defendant, thus rejecting the

Commissions attempt to prevent the Court from deciding these issues. Further,Developmental

Pathwaysaddressed the Commissions jurisdiction, and the Commission is bound by the

principles of res judicata, just as all litigants. And finally, whether the Governor or the

125Developmental Pathways, 178 P.3d at 528 (emphasis added).

126Response, at 12.127C.R.S. 24-18.5-101(5)(a) (emphasis added).128SeeResponse, 12-13.


40/58

40

Commission appeared inDevelopmental Pathways, the fact remains that the agency responsible

for Amendment 41 and the enabling statute has interpreted its jurisdiction inconsistently.129

Ultimately, the Commissions position gives it the right to assert unlimited jurisdiction,

because the Commission does not even attempt to supply any limiting principle for its overly

broad claims of authority under the other standards of conduct language in either Amendment

41 or the enabling statute. Amendment 41, the Bluebook, the enabling statute, and the Colorado

Supreme Courts confirming language inDevelopmental Pathways make it simply

unreasonable for the Commission to argue that the voters of Colorado gave it the power to

unilaterally decide that it has jurisdiction over every alleged violation of any legal standard

apparently so long as the Commission simply slaps an ethics label on it. The Commission has

now defined ethics to include all accounting standards and all spending regulations.

The Court should not simply defer to the Commissions convoluted, incorrect, and

inconsistent legal rationale. Instead, the Court should hold that the Commission exceeded its

jurisdiction in penalizing the Secretary for his expenditure of $1,396.89 from his $5,000 annual

discretionary fund in FY2011-12, because the Commissions jurisdiction under Amendment 41

is limited to enforcing the gift ban, lobbying ban, and the ban on influence peddling, as the

Colorado Supreme Court inDevelopmental Pathwaysheld that C.R.S. 24-18.5-101(5)

confirm[ed].130

129SeeColorado Citizens for Ethics in Govt, 187 P.3d at 1215 (Here, we reject CCEGsinvitation to defer to the ALJs interpretation of the regular business exception because therecord shows that at least one other administrative law judge has reached a contraryconclusion.).130Both Colorado Common Cause and CREW have asked to file amicus briefs in this case. Bothbriefs come to the Commissions aid and argue in support of the Commissions overly broad andexpansive jurisdiction. Their arguments, in effect, seek to protect their symobotic relationships


41/58

41

B. The Commission does not have the power to assert supervisory power overspending by executive branch officers; Colorado law expressly allocatesthat power among other state entities.

In addition to violating Amendment 41 and the explicit language in the enabling statute

by asserting jurisdiction, the Commission also violated the discretionary-fund statute itself by

substituting its own judgment for the Secretarys in interpreting appropriate uses of his annual

discretionary fund. The statute grants the Secretary not the Commission the ability to spend

his annual discretionary fund for expenditure in pursuance of official business as [the Secretary]

sees fit.131And even the counterpart132to the statute on which the Commission hangs the

with the Commission. Indeed, the Commission is the turf on which these special-interest groupsplay and on which they promote their political agendas; in return, these special-interest groupskeep the Commission occupied and relevant. But the jurisdiction of a government agency is notdetermined by the poltical desires of special-interest groups; rather, enabling authorities specifyand limit the jurisdiction of government agencies. Here, enabling authorities are Colo. Const.Art. XXIX (Amendment 41) and C.R.S. 29-18.5-101 (then enabling statute).

Moreover, and stated delicately, Common Causes legal position related to the Commissionsjurisdiction has evolved. Indeed, its argument to the Colorado Supreme Court inDevelopmentalPathways, Common Cause took a more cautious and limited approach in its jurisdictionalargument, as opposed to the overly broad jurisdictional argument that Common Cause andCREW now advocate in this case. InDevelopmental Pathways, Common Cause advised theSupreme Court that Amendment 41 was passed to prohibit only gifts that violate the publictrust. SeeExhibit A (Br. of Amicus Curiae Colorado Common Cause, Developmental Pathwaysv. Ritter, Case No. 07SA181 (Colorado Supreme Court, filed Sept. 7, 2007). Common Causethen acknowledged that the goal of Amendment 41 was to stop the use of gifts, trips and mealsto curry favor and build relationships with decision makers.Id., at 11. Common Cause thenargued that the inherent limitations within Amendment 41 were designed to avoid aninterpretation that would lead to absurd results and defeat the objectives of the amendment.Id.,at 20. Notwithstanding Common Causes contrary argument to the Colorado Supreme Court in2007, a broad jurisdictional argument is now advanced by Common Cause and CREW. TheCommissions overly broad exercise of jurisdiction in this case, a case having nothing to do withthe gift ban or even influence peddling more generally, resulted in an absurd result: TheCommission has penalized the Secretary for spending sums from his own discretionary fund forofficial business as he sees fit, as expressly permitted by statute. SeeC.R.S. 29-18.5-101.131Opening, at 14-16 (quoting C.R.S. 24-9-105(1)) (emphasis added).132C.R.S. 24-18-103(2)


42/58

42

Secretarys ethical violation133contemplates that the Denver District Attorney not the

Commission enforces any violation, in addition to any criminal action which may be brought

against such public official . . . .

134

The Denver District Attorney considered and declined to

bring such criminal action. Yet the Commission found an ethical violation, based upon

CREWs same criminal complaint. In a breathtaking rejection of the State Controllers expertise,

the Commission even relied upon the state fiscal rules to find an ethical violation, even though

the State Controller indisputably testified that the fiscal rules did not apply to the Secretarys

annual discretionary fund. And the Commission found that the Secretary misspent money from

his discretionary fund, even though the Colorado Legislative Audit Committee declined any

audit.135

The Commission requests from the Court great deference when interpreting its

jurisdiction, yet the Commission ignores the statutory deference given to the Secretary, the

Denver District Attorney, the State Controller, and the Colorado Legislative Audit Committee.

The Commission brushed all of these agencies aside and inserted itself under the vague label of

ethics.

C. The Commission improperly found that the Secretary violated a statute,even though that statute creates no legal duty for the Secretary to violate.

Even if the Commission had jurisdiction to penalize the Secretary under C.R.S. 24-18-

103(1), the Comm

reply brief of scott gessler in appeal of iec sanctions order

Documents