Wealthy people and political groups embraced a more secretive way to influence Denver’s elections in 2019, spending more than $1 million through nonprofits that provide minimal information about their donors.

The groups had optimistic names such as Rise Up Denver, Committee for a Great Denver, Colorado’s Best People and A Better Denver for All of Us.

They were funded by some of the most powerful interests in the city, and more than $740,000 of the money supported Mayor Michael Hancock — about a third the amount of his campaign budget. The outside money paid for yard signs and television ads, door-knocking crews and cartoon mailers.

Such outside spending has a growing presence in local politics across the United States. Just like in federal and state elections, people and organizations can use independent groups to spend unlimited money to support a local political candidate, as long as it’s not coordinated with the official campaign.

“This election in Denver I think pretty much blew apart all previous records for spending on a municipal election, at least in Colorado,” said campaign finance reformer Matt Arnold.

Outside spending is mutating faster than the city can keep pace, and it threatens to undermine the campaign finance reforms that were recently approved by Denver voters.

In 2011, independent groups spent more than $700,000 on Denver’s elections, according to Denver Post analysis. But much of that earlier spending came through political action committees, which must report their finances through the city’s standard forms.

In 2019, the money cascaded into a different outlet. The biggest donors embraced nonprofit groups that disclose less information about their supporters during the election. It’s part of a national trend that accelerated with the Citizens United case decided by the U.S. Supreme Court in 2010.

“They realized that there’s just less paperwork,” said Dan Aschkinasi, a local political consultant. “Seriously, it’s crazy.”

The biggest groups, such as Rise Up Denver and Committee for a Great Denver, are registered as 527 political nonprofits; others operate as 501(c)(4) “social welfare” organizations, which are not supposed to “primarily” operate in politics. The latter political spending is referred to as “dark money” because of the lack of donor reporting requirements.

“Folks who don’t want to disclose what they’re doing in politics are abusing the 501(c)(4) vehicles,” said Arnold, who works under the name Campaign Integrity Watchdog. “They’ve been abusing that vehicle to play in politics and political campaigns while staying hidden.”

Partial transparency

Denver’s city officials already have tried to counter the rise of these new groups, including through a 2017 law that requires basic disclosure about independent political spending.

Previously, the city government didn’t require local finance reporting from 527s and other groups. It’s therefore difficult to quantify their role in previous elections, but several observers said they were more prevalent this year.

The first election cycle under the new system exposed frustrating shortcomings that obscured important details.

“It’s a level of disclosure we hadn’t seen before, but it’s still lacking some of the full transparency we’d like to see,” said Owen Perkins, a leader of the campaign finance reform effort in Denver last year.

For example, the nonprofits now must give the names of their financial supporters. The reports show a long list of the city’s elite, from Colorado Rockies owner Dick Monfort to developer Patrick Hamill.

But it’s impossible to say how much money any person or group spent, because those details aren’t required in the city reports. Some of the groups may report that information under other laws — but often it’s not until months after the fact. City officials may have decided not to require more specific disclosures because they were cautious of legal challenges, according to former Elections Director Amber McReynolds; other cities are more aggressive in their requirements.

Meanwhile, the information that was disclosed was spread across a confusing array of documents.

“Pardon my language; it’s a (expletive) show,” said Florence Sebern, an eagle-eyed resident who filed several campaign finance complaints this year.

To track the spending of just one group can require reviewing and tabulating a dozen different PDF documents. To analyze overall independent spending, The Denver Post combed through more than 60 individual reports. Unlike for typical campaign spending, the city does not provide interactive files with information about the nonprofits’ and others’ spending.

Furthermore, enforcement of the reporting rules is spotty.

Friends for Denver’s Future, which mailed cartoons that criticized the Hancock administration, faces $2,000 in fines from Denver Elections for failure to file reports. But enforcement is largely driven by resident complaints, allowing other groups to submit shoddy or incomplete paperwork without repercussions.

“I can’t tell you how many hours and how many hundreds of dollars I have lost in just engaging in this campaign process,” Sebern said. “Candidates are being paid. The political action committees, they’re all getting paid. Everyone gets a little something, somewhere — except in this situation, where the complainant takes it in the neck.”

What’s changing

Denver’s laws are supposed to limit the power of money in politics.

For example, an individual can’t give more than $3,000 to a politician’s campaign. And those limits are getting stricter: Denver voters in 2018 approved a new law that will lower future donation limits. The city also will ban corporations and other groups from contributing to candidates, closing a loophole that developers on both sides used in this election.

But, as shown in Citizens United, there’s a way around all this: The First Amendment allows people to spend unlimited money to express political messages, as long as the candidates aren’t directly involved.

That spending may now be reaching local elections in a greater volume.

“We hear about big spending in certain races here and there, and informally surmise that IE spending is on the rise,” but there’s no comprehensive data to support a strong conclusion, said Denise Roth Barber, managing director of the National Institute on Money in Politics, in a written statement.

In New York City, independent expenditures spiked to nearly $16 million in 2013, far exceeding previous years, according to the New York Campaign Finance Board.

So, even while Denver voters attempt to shut out big money, its influence is growing. In 2019, the two largest Hancock-supporting groups reported more than $700,000 in combined spending. In the month of May, they spent more than 50 percent of what the candidate did.

“Instead of candidates driving the message, it’s the third-party groups that are supposedly not coordinating with the candidates,” McReynolds said. She argues that restrictions on individual donations to campaigns are accelerating the trend: Unable to spend directly through the better-regulated system, they’re using more shadowy options.

And big money isn’t just flowing on behalf of the incumbents.

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Supporters of challenger Jamie Giellis spent nearly $130,000, mostly on cartoon flyers that attacked the mayor, through a group that hasn’t offered any details about its donors. A separate political action committee, “Better Denver,” funded tens of thousands of dollars of Facebook ads. Its primary backer, “I LOVE YOU DENVER,” is a nonprofit affiliated with the Zeppelin family of developers.

In District 1, firefighter labor groups spent more than $100,000 through a nonprofit on polls, yard signs and more in a failed attempt to get firefighter Mike Somma elected to the Denver City Council — more than the candidate himself spent. A firefighters’ political committee spent another $59,000.

Somma lost by a 33-point margin — evidence that independent money isn’t always effective.

“Money that’s spent outside of the campaign tends to stick out like a sore thumb,” Perkins said. “And that doesn’t always go over well.”

Candi CdeBaca, who defeated incumbent Albus Brooks, benefited from about $67,000 in spending from independent groups such as Colorado People’s Alliance. Separately, the Denver Working Families Party spent $70,000 on her, Chris Hinds and Jamie Torres. Brooks also had independent backing.

Carlos Valverde, the Working Families Party’s state director, said he moved his office and cut off contact with CdeBaca, a friend, in order to obey the law, which doesn’t allow candidates to coordinate with their independent supporters.

The entrance of independent money, he suggested, could make for sharper campaigns.

“It’s not really appropriate — in my opinion, anyway — for candidates to attack their opponents,” he said. “We’re a little bit more comfortable with highlighting the negatives of our candidates’ opponents.”

A different way

By all appearances, independent money is here to stay. But cities and states have the power to make it more transparent.

New York City tracks both independent and candidate spending on an interactive data portal called “Follow the Money.”

The NYC website allows residents to easily see how much money has been spent by independent groups to support various candidates. The closest thing that Denver offers is a huge Excel spreadsheet. The spreadsheet doesn’t include 501(c)(4) and 527 spending, so it was missing more than $1 million this year.

Unlike in Denver, voters in New York City can see how much money each individual or group is donating toward independent spending. New York requires the disclosure of all donors who give more than $1,000 to a group, and independent advertising must disclose the individual person who was responsible for the message and the group’s top three donors.

The New York City site also includes copies of advertisements, allowing voters to see what messages each group is pushing.

“People have a right to know who is attempting to influence their vote,” Arnold said. “That’s a clear public interest.”

Denver Elections has considered overhauling its own tech systems for years, and may soon issue a request for proposals. Councilman Paul López, who just won election as the city’s clerk, will oversee that effort.

“Yeah, absolutely,” he said. “I think the system needs some updating and I look forward to having these conversations with the current staff and leadership in the clerk’s office. There’s a lot of work on the horizon, and I’m going to be ready for that.”