As the 2012 race in Colorado’s always hotly contested 4th congressional district officially kicked off this week, Republicans in Larimer County, the most populous county in the district, are suffering through another humiliating chapter in the unfolding history of incompetence and corruption that plagued the county party under the recent direction of Larry Carillo. Police issued a felony theft arrest warrant for the former party chairman Tuesday, accusing him of stealing more than $17,000 to pay bills and gambling debts. Carillo is alleged to have unwittingly set up payments to a company created by the Department of Homeland Security to fight online gambling and money laundering. Carillo paid more than $27,000 in online gambling debts while he was party chairman.

Mounting evidence suggests Carillo was struggling personally and part hapless and part opportunist as party chair from February 2009 to February 2011. He failed repeatedly to file campaign finance reports, racking up roughly $65,000 in state fines.

State Senate President Brandon Shaffer, a Longmont Democrat, announced Monday he was running to unseat CD4 Republican freshman Congressman Cory Gardner in 2012. The race is sure to be hard fought. Shaffer has eyed the seat for some time, running briefly to represent CD4 in 2008, before withdrawing to make room for Democrat Betsy Markey, who that year unseated Republican social conservative Marilyn Musgrave.

Carillo was replaced as Larimer GOP chairman by Tom Lucero, one-time CU regent and Republican CD4 2010 candidate. Lucero told Bob Moore at the Fort Collins Coloradoan that the warrant for Carillo’s arrest represents a big step forward out of the swamp of mismanagement and bad news that has dogged the local party for months.

“We’re finally able to bring closure to this and we’re able to move on to the final step, which is our [campaign finance fine] appeals process with the secretary of state and we’ll be able to very soon put this chapter behind us and close the book on it.”

Carillo on Tuesday afternoon told Moore he was planning to surrender to Fort Collins police. The Coloradoan has owned the story of the struggling Larimer County GOP. Read Bob Moore’s story posted today for rich detail.

[ Via Fort Collins Coloradoan ]