A pool of federal money meant to boost Colorado’s economy in the early 2000s still exists 16 years after its creation — and was used by at least two governors for a hodgepodge of expenses, including the creation of a $13,000 website touting former Gov. John Hickenlooper’s legacy.

The fund, which came to public attention in November when it was found to be covering the cost of Hickenlooper’s ethics defense, was created in 2003 by the Jobs and Growth Tax Relief Reconciliation Act, to help states recover from the 2001 recession. Under the law, the money given to states could only be used to “provide essential government services or cover the costs” of federal mandates. Colorado received about $157 million.

For the past dozen years, the fund has been treated as a highly discretionary tool in the budgetary tool belts of Colorado’s governors, granting them wide flexibility over how its money was spent. Budget officials for the past two governors say there were few, if any, limits on what dollars in the federal fund could be spent on, augmenting governor’s office spending that’s otherwise controlled by the legislature.

On Dec. 9, Democratic state lawmakers on Colorado’s Legislative Audit Committee voted down a Republican request to audit the federal fund. Republicans had sought an audit to determine whether the fund was ever used by Hickenlooper to cover nonessential government services in violation of the federal law that created it.

If an audit had been conducted, it would have found the fund, in its 16-year history, has primarily been used the way it was meant to be used: to fund essential government services and cover the cost of unfunded federal mandates. Most of the money was spent in the first two years, to pay for transportation, job training, dental care for low-income children, law enforcement upgrades and prison costs, among other government services.

But auditors would also have found expenses that less evidently align with the federal law’s restrictions. Between mid-2014 and the start of 2019 — a time span that includes the end of Hickenlooper’s first term in office and his entire second term — those expenses include $20,381 in rentals of a state-owned aircraft, $111,842 on “personal services” and at least $399,006 in dues to groups like the National Governors Association, Western Governors Association and National Association of State Budget Officers.

Those expenses appear on the state’s transparency website, which dates back to July 2014. To analyze expenses prior to that time, The Denver Post acquired less detailed state budget documents through the Colorado Open Records Act. In total, the Post received records from more than a half-dozen CORA requests in December to explain how the state has spent the federal dollars between 2003 and today.

In December 2018, the last month of his governorship, Hickenlooper’s office used $13,385 from the fund to pay a marketing firm, Merritt+Grace, to design and build a website. That website, ListenHarderCO.com, told “the story of how Governor Hickenlooper” and his administration “paved the way for Colorado’s journey and growth,” Hickenlooper’s office said at the time it was created. But the site no longer exists — its license expired in December 2019 after only a year online.

Consulting firms were paid $28,900 from the fund in 2014 and $5,000 from the federal fund in 2015. In late 2014, $5,000 from the fund went to the Civic Center Conservancy for an official function. A four-star hotel in Cherry Creek was paid $2,500 from the fund in 2015 to host another official function, according to the transparency website.

“The Hickenlooper administration continued the practice of the Republican and Democratic governors before and used federal flex funds from the 2003 Bush tax cuts to cover miscellaneous state expenses,” said Melissa Miller, the former governor’s campaign spokeswoman.

Hickenlooper, a Democrat, is now running for U.S. Senate. Asked at a campaign stop Dec. 19 whether he ever spent money from the federal fund on nonessential government services, Hickenlooper said he did not know, citing the complexities of state government budgeting.

“I don’t know. I can’t describe how many different accounts there are, and they don’t come to the governor and say, ‘We’re going to use this account, we’re going to use that account.’ Henry Sobanet can tell you because Henry Sobanet — the reason I had a Republican as my budget manager is he understood all those accounts, or his team did,” Hickenlooper said, referring to his former budget director. “He knew exactly who knew the details. No one person could ever know all that stuff.”

When asked in a followup question whether the budget office, and not the governor’s office, decided which fund to pull money from, the former governor said, “Well, I don’t know if it was the budget office. I assume it was the budget office but … they don’t come to me every time and say, ‘Well, is this account sufficient or is that account sufficient?’”

In 2003, all money in the federal fund went through the governor’s office, which passed the vast majority on to other areas of state government to pay for essential government services. Under former Gov. Bill Ritter, who took office in 2007, the fund’s uses were expanded to cover bureaucratic costs, such as building rentals, technological upgrades and employee wages. By the time Hickenlooper took office in 2011, less than $10 million remained in the fund.

“The recession impacted state finances and so the rules of the grant allowed regular government expenditures to be addressed at the discretion of the governor. And so, over time, that’s what this fund has been used for,” said Sobanet, the former budget director, in an interview.

Jim Carpenter, who was chief of staff for Ritter, said the federal fund is discretionary and was treated as such by the Ritter administration. There is not a definition of “essential government services” that is used by Colorado’s state government, Carpenter said.

“We really had wide discretion to use these funds, to use these dollars,” he said. “They were truly flex funds, truly discretionary accounts.”

The governor’s office under Hickenlooper’s successor, Jared Polis, has used the federal fund sparingly. Many of the expenses from the fund under the Polis administration have been payments to Recht Kornfeld PC, the law firm defending Hickenlooper in an ethics dispute. That arrangement began before Polis took office.

On at least one occasion, the federal fund was partially reimbursed with state tax dollars to keep it afloat. During the 2018 legislative session, Hickenlooper requested and the General Assembly approved a transfer of $562,240 from the state’s general fund to the federal fund.

Now, 16 years after its creation, the federal fund has about $1 million remaining in it, according to the Department of Personnel and Administration. State Sen. Paul Lundeen, a Monument Republican who has called for an audit of the fund, remains frustrated that Democrats on the Legislative Audit Committee voted down his request.

“In the interest of good government, I asked the government to police itself, and that’s why we brought this to the auditor and the Audit Committee. I think anyone who cares about transparent, good government has to support that,” he said Tuesday. “The fact there has been a party-line rejection starts to smack of a coverup.”