DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO 1437 Bannock Street, Denver, CO 80202 SCOTT E.

GESSLER, individually and in his capacity as the Secretary of State of the State of Colorado, Plaintiff, v. DAN GROSSMAN, SALLY H. HOPPER, BILL PINKHAM, MATT SMITH and ROSEMARY MARSHALL in their official capacity as members of the Independent Ethics Commission and the INDEPENDENT ETHICS COMMISSION, a tribunal of the State of Colorado, Defendants. JOHN W. SUTHERS, Attorney General LISA BRENNER FREIMANN * First Assistant Attorney General RUSSELL B. KLEIN* First Assistant Attorney General JOEL W. KIESEY* Assistant Attorney General Ralph L. Carr Colorado Judicial Center 1300 Broadway, 8th Floor Denver, CO 80203 Telephone: 720-508-6385 E-Mail: lisa.freimann@state.co.us Registration Numbers: 31175, 31965, 38078 *Counsel of Record ANSWER BRIEF

DATE FILED: December 17, 2013 4:17 PM FILING ID: 85EF5F1FB5D50 CASE NUMBER: 2013CV30421

 COURT USE ONLY  Case No. 13 CV 030421

Defendants, Dan Grossman, Sally Hopper, Bill Pinkham, Matt Smith and Rosemary Marshall, in their official capacities as Commissioners, and the Independent Ethics Commission, through their undersigned counsel, submit the following as their Answer Brief. i

TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ........................................................................................... v-viii INTRODUCTION .................................................................................................................... 1 STATEMENT OF THE CASE AND FACTS ..................................................................... 1 A. B. C. The Complaint against the Secretary .................................................................. 1 The IEC’s Investigation........................................................................................... 3 The Hearing on the Complaint and the IEC’s Decision................................... 4

ARGUMENT............................................................................................................................. 5 I. II. APA Standard of Review......................................................................................... 5 The IEC properly exercised its jurisdiction over ethics issues arising under Article XXIX and “other standards of conduct and reporting requirements as provided by law.” ................................................................................................. 6 A. B. Standard of Review – Question of Jurisdiction. .................................... 6 The IEC had jurisdiction to address the complaint against the Secretary......................................................................................................... 7 1. In addition to the gift ban, the IEC has jurisdiction over ethics issues arising under Article XXIX and other standards of conduct and reporting requirements............................................... 7 The Commission had jurisdiction over the facts of this case and the standard of conduct set forth in § 24-9-105, C.R.S., and other standards of conduct provided by law............................................. 9

2.

C.

The Secretary’s argument that the IEC’s jurisdiction is limited to “the gift ban” ignores the plain language of Article XXIX and the IEC’s enabling legislation and misplaces reliance on the Bluebook and Developmental Pathways. ................................................................ 11

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D. III.

The IEC’s jurisdiction extends to misuse of the Secretary’s discretionary fund...................................................................................... 13

The IEC did not act arbitrarily and capriciously in determining the Secretary’s expenditures violated the law ........................................................ 15 A. B. Standard of Review. ................................................................................... 15 Because the record supports the IEC’s decision, it should not be overturned. ................................................................................................... 16

IV.

The IEC did not violate the Secretary’s right to due process ....................... 20 A. B. C. D. Article XXIX and the IEC’s enabling statute are not unconstitutionally vague. ......................................................................... 20 The Secretary received sufficient notice of the charges against him. ................................................................................................................ 22 The IEC did not abuse its discretion in ruling on matters related to discovery and trial management............................................................. 24 The IEC did not abuse its discretion when denying the Secretary’s request to recuse two Commissioners. ................................................... 26 1. 2. 3. E. Commissioner Marshall. ............................................................... 28 Commissioner Grossman. ............................................................. 30 Harmless Error. .............................................................................. 31

The IEC did not assume an improper prosecutorial role. ................. 32

V.

The Secretary’s First Amendment challenges should be rejected ............... 33 A. The Secretary’s “as applied” challenge fails as the State has no obligation to subsidize the exercise of free speech and the Secretary failed to raise the issue in the administrative proceeding. ............... 33 The IEC’s jurisdiction over “ethics issues arising . . . under any other standards of conduct and reporting requirements as provided by law” neither is unconstitutionally vague nor overbroad under the First Amendment. ................................................................................................. 35 iii

B.

C.

Developmental Pathways is a gift ban case and has no application to the present matter...................................................................................... 37

CONCLUSION ....................................................................................................................... 38

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TABLE OF AUTHORITIES Cases Cammarano v. United States, 358 U.S. 498 (1959) ........................................ 33-34 Colo. Bd. of Medical Exam’rs v. Boyle , 924 P.2d 1113 (Colo. App. 1996)......... 22 Colo. Citizens for Ethics in Gov’t v. Comm. for the Am. Dream, 187 P.3d 1207 (Colo. App. 2008)............................................................................................. 8-9 Colo. Cmty. Health Network v. Colo. General Assembly, 166 P.3d 280 (Colo. App. 2007).......................................................................................................... 7 Colo. Ethics Watch v. Senate Majority Fund, LLC , 269 P.3d 1248 (Colo. 2012) ................................................................................................................... 7 Colonial Bank v. Colo. Fin. Servs. Bd., 961 P.2d 579 (Colo. App. 1998) .......... 15 DeKoevend v. Bd. of Educ. of W. End Sch. Dist. RE-2, 688 P.2d 219 (Colo. 1984) ................................................................................................................. 32 Developmental Pathways v. Ritter, 178 P.3d 524 (Colo. 2008) ...............11-13, 37 Glendale v. Buchanan, 578 P.2d 221 (Colo. 1978) ................................................ 21 Goebel v. Benton, 830 P.2d 995 (Colo. 1992) .................................................... 27, 29 Horrell v. Dep't of Admin., 861 P.2d 1194 (Colo. 1993)........................................ 34 In re Application for Water Rights of Well Augmentation Subdistrict of the Cent. Colo. Water Conservancy Dist., 221 P.3d 399 (Colo. 2009)....... 5-6 Independence Institute v. Coffman , 209 P.3d 1130 (Colo. App. 2008) ........ 35-36 Johnson v. Dist. Court, 674 P.2d 952 (Colo. 1984) ................................................ 27 Joseph v. Mieka , 282 P.3d 509 (Colo. App. 2012) ..................................... 24, 26, 31 Loonan v. Woodley , 882 P.2d 1380 (Colo. 1994)..................................................... 21 Moody v. People, 159 P.3d 611 (Colo. 2007) ..................................................... 31, 34

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Negron v. Golder , 111 P.3d 538 (Colo. App. 2004) ................................................ 34 Norton v. Colo. State Bd. of Medical Exam’rs, 821 P.2d 897 (Colo. App. 1991) ............................................................................................................................. 22 People v. Botham, 629 P.2d 589 (Colo. 1981).......................................................... 27 People v. Janousek, 871 P.2d 1189 (Colo. 1994)..................................................... 36 People v. Loveall, 231 P.3d 408 (Colo. 2010)........................................................... 25 Ramseyer v. Colo. Dep't of Soc. Servs., 895 P.2d 1188 (Colo. App. 1995)......... 15 Regan v. Taxation With Representation of Washington, 461 U.S. 540 (1983) .......................................................................................................... 33-34, 37-38 Rocky Mountain Animal Defense v. Colo. Div. of Wildlife, 100 P.3d 508 (Colo. App. 2004)....................................................................................................... 6-7 Shupe v. Boulder Cnty., 230 P.3d 1269 (Colo. App. 2010) ................................... 19 Silverberg v. Colantuno, 991 P.2d 280 (Colo. App. 1998) .................................... 25 Simpson v. Cotton Creek Circles, LLC , 181 P.3d 252 (Colo. 2008) .............. 20-21 Smith v. Farmers Ins. Exch., 9 P.3d 335 (Colo. 2000) ............................................ 9 Specialist Rests. Corp. v. Nelson, 231 P.3d 393 (Colo. 2010) ................................ 7 Stamm v. City & County of Denver, 856 P.2d 54 (Colo. App. 1993) .................. 21 Table Servs., Ltd. v. Hickenlooper , 257 P.3d 1210 (Colo. App. 2011)................ 20 The Nat’l Gay Task Force v. Bd. of Educ. of the City of Okla., 729 F.2d 1270 (10th Cir. 1984) ................................................................................................ 36 United Airlines v. Indus. Claim Appeals Office, 312 P.3d 235 (Colo. App. 2013)....................................................................................................... 34 Van Sickle v. Boyes, 797 P.2d 1267 (Colo. 1990).................................................... 15 Venard v. Dep’t of Corrs. , 72 P.3d 446 (Colo. App. 2003)..................................... 27

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Weissman v. Bd. Of Educ., 547 P.2d 1267 (Colo. 1976) ....................................... 32 Wildwood Child & Adult Care Program, Inc. v. Colo. Dep't of Pub. Health & Env't, 985 P.2d 654 (Colo. App. 1999) ................................................ 15 Williams v. Indus. Claim Appeals Office, 128 P.3d 335 (Colo. App. 2006)........................................................................................................ 34 Williams v. Kunau, 147 P.3d 33 (Colo. 2006) ......................................................... 34 Code of Colorado Regulations 8 CCR 1510-1, sec. 7.A................................................................................................... 8 8 CCR 1510-1, sec. 8.A................................................................................................... 8 Colorado Constitution Article XXIX, Colorado Constitution ....1, 3, 6-9, 11-14, 16, 20, 23-24, 30, 35, 37 Colorado Rules of Civil Procedure Colo. R. Civ. P. 97 ......................................................................................................... 27 Colorado Rules of Evidence CRE 403 .......................................................................................................................... 26 CRE 702 .......................................................................................................................... 25 Colorado State Fiscal Rules 1 Code Colo. Regs. 101-1, Rule 5-2.13 ...................................................................... 10 1 Code Colo. Regs. 101-1, Rule 5-2.15 ................................................................ 10-11 1 Code Colo. Regs. 101-1, Rule 5-3.3.2 ..................................................................... 11

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1 Code Colo. Regs. 101-1, Rule 5-7.3 ........................................................................ 10 1 Code Colo. Regs. 101-1, Rule 5-7.4 ........................................................................ 10 1 Code Colo. Regs. 101-1, Rule 5-11.7 ...................................................................... 11 Colorado Statutes § 24-4-105, C.R.S. .............................................................................................22, 24-26 § 24-4-106, C.R.S. ............................................................................................ 1, 5, 6, 38 § 24-9-105, C.R.S.. ................................................................... 3-5, 9, 10,17, 22, 33, 37 § 24-17-102, C.R.S. ...................................................................................................... 3-4 §§ 24-18-101, et seq. , C.R.S. ........................................................................................ 14 § 24-18-103, C.R.S. .................................................................................... 3-4, 9, 13, 14 § 24-18.5-101, C.R.S. .................................................................................................. 6-8 §§ 24-21-101, et seq. C.R.S. ........................................................................................ 18 § 24-30-202, C.R.S. ..................................................................................................... 3-4 United States Constitution First Amendment, United States Constitution ............................................... 33-38 Sixth Amendment, United States Constitution..................................................... 25

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INTRODUCTION This matter is a judicial review of a final agency order issued by the Independent Ethics Commission acting within the scope of its constitutionally mandated authority. The IEC provided the Secretary with fair and adequate notice of the allegations against him, and gave him a fair opportunity to present evidence on the ethical issues in this case. The IEC properly reviewed the Complaint against him and determined that it was not frivolous, conducted an independent investigation into the allegations of the Complaint, notified the parties of the issues to be addressed at a hearing, held a public hearing on the allegations, rendered findings that the Secretary violated ethical rules of conduct which were supported by substantial evidence and law, and assessed penalties against the Secretary for his ethical violations. In doing so, the IEC acted appropriately, consistent with its constitutional mandate, and within its jurisdiction, as set forth in section 5 of Article XXIX of the Colorado Constitution. Accordingly, this Court should affirm the IEC’s action pursuant to § 24-4-106(7), C.R.S. STATEMENT OF THE CASE AND FACTS A. The Complaint against the Secretary.

On October 15, 2012, Colorado Ethics Watch (“CREW”) filed a complaint with the Independent Ethics Commission (“IEC”) against Scott Gessler, the current Colorado Secretary of State (“Secretary”). CREW supplemented the complaint on 1

October 22, 2013 (the complaint and the supplement are together referred to as the “Complaint”). Complaint, R. 001032-64. 1 In the Complaint, CREW alleged that the Secretary engaged in conduct that violated his ethical duties as a public official in three ways. Complaint, R. 00103264. First, the Secretary allegedly used state funds for airfare to Tampa, Florida to attend a Republican National Lawyers Association conference (“RNLA Conference”) and the Republican National Convention (“RNC”), for a hotel room at the Ritz Carlton in Sarasota, Florida for three nights during the RNLA Conference and the day before the RNC. Complaint, R. 001034-35, 001045-46. Second, CREW alleged that the Secretary used state funds to pay airline change fees and a hotel cancellation fee to return early from the RNC when he and his family were threatened. Id., R. 001035, 001048. Third, CREW alleged that the Secretary improperly received payment of all remaining funds in his discretionary fund at the end of the 2011-2012 fiscal year, without presenting receipts or documentation for the funds. Id., R. 001059-64. CREW complained that the Secretary did not spend these funds “in pursuance of official business”. Complaint, R. 001036. The Secretary responded to the Complaint on December 20, 2012 (“Response”). Response, R. 000231-732.2 The Secretary argued that all

References to the record are by document title and reference to the electronic page number, as appropriate, e.g., “Complaint, R. 001032-64”, and to transcripts by page and line number, e.g., “6/7/2013 Hearing Tr., p. 313 l. 11 – p.379 l. 8.” 2 The Secretary also filed a motion to dismiss the Complaint (R. 000215-30), which was denied orally by the IEC (1/7/13 Meeting Minutes, R. 001364) and by written order (R. 000733-35).
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reimbursements and expenditures were proper. Id. Factually, the Secretary did not dispute that he was reimbursed for the RNLA Conference expenses and costs to return to Colorado. He also did not dispute that he had received $117.99 pursuant to his request for the amounts remaining in the discretionary fund. Id. B. The IEC’s Investigation.

Pursuant to its constitutional mandate under section 5(1) of Article XXIX of the Colorado Constitution, on November 5, 2012, the IEC considered the Complaint (designated Complaint No. 12-07) and made an initial determination that the Complaint was not frivolous. 11/5/12 Meeting Minutes, R. 001360. After receiving the Secretary’s Response, the IEC appointed an independent investigator. The investigator presented his findings to the IEC at its public meeting on April 8, 2013 and issued a report (“Investigation Report”). 4/8/13 Meeting Minutes, R. 00137477. A copy of the Investigation Report was later provided to the parties. Following the investigation, the IEC set a hearing on the Complaint for June 7, 2013, and gave notice to all parties pursuant to its Notice of Hearing and Hearing Procedures (“Notice of Hearing”). Notice of Hearing, R. 000878-80. The IEC issued a Pre-Hearing Order (R. 000881-84) and an Amended Pre-Hearing Order (R. 000937-40) prior to the June 7 hearing. Within both, the parties were notified of the potential statutory rules that would be considered by the IEC. 3 The statutes

The only difference between the two orders is that the Pre-Hearing Order incorrectly cited to § 24-17-102(26), C.R.S., and was corrected in the Amended PreHearing Order to cite to § 24-30-202(26), C.R.S.
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cited and quoted included §§ 24-18-103(1), 24-9-105(1) and (2), 24-17-102(1), 24-30202(26), C.R.S., and the State Fiscal Rules. Id. Two weeks before the hearing, on May 21, 2013, the Secretary paid $1,278.90 to the state of Colorado. Secretary’s May 21 Letter, R. 001272. C. The Hearing on the Complaint and the IEC’s Decision.

On June 7, 2013, the IEC held a hearing on the Complaint. A copy of the transcript of the June 7 Hearing is attached and incorporated hereto as Exhibit 1 (“6/7/2013 Hearing Tr.”). 4 Both CREW and the Secretary appeared through counsel at the 11 hour hearing, presented evidence, examined witnesses and argued before the IEC. 6/7/2013 Hearing Tr., p. 1-387, Ex. 1. Both parties submitted written closings to the IEC on June 12, 2013. CREW’s Closing Argument , R. 001326-40; The Secretary’s Closing Argument, R. 001341-51. On June 19, 2013, the IEC issued Findings of Fact and Conclusions of Law (“IEC Decision”). IEC Decision, R. 001352-58. The IEC found that the Secretary violated ethical rules in two ways. First, the IEC determined that the $1,278.90 was spent “primarily for partisan purposes, and therefore personal purposes . . . ” and therefore was a violation of § 24-9-105, C.R.S. IEC Decision, R. 001356. Second, the IEC determined the Secretary’s request and receipt of $117.99 “was not in

The IEC believes that the transcript contains differences between the recording and the transcription of that recording. A copy of the IEC’s list of changes to the transcript is attached as Exhibit 2.
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pursuance of official business but was personal in nature . . . .” and therefore was a violation of § 24-9-105, C.R.S. 5 Id. The IEC found that the Secretary did not violate any ethical rules in accepting reimbursement for the additional expense incurred in returning to Colorado as a result of the threats against him and his family. IEC Decision, R. 001356. Based on its findings, the IEC concluded that the Secretary “breached the public trust for private gain using funds for personal and political purposes . . . .” and imposed a penalty against the Secretary in the amount of $1,514.88. IEC Decision, R. 001356. The IEC determined this figure by doubling the amounts the Secretary improperly received ($1,278.90 and $117.99), reduced by the $1,278.90 the Secretary repaid. Id. ARGUMENT I. APA Standard of Review. The IEC agrees with the Secretary that § 24-4-106, C.R.S. (2013) of the APA governs this judicial review. In re Application for Water Rights of Well Augmentation Subdistrict of the Cent. Colo. Water Conservancy Dist., 221 P.3d 399, 417 (Colo. 2009) (stating “APA section 24-4-106 governs judicial review of agency

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One member, Sally Hopper, of the five-member IEC dissented from the findings of fact and conclusions of law relating to the Secretary’s acceptance of reimbursement of $117.99. IEC Decision, R. 001357. Ms. Hopper otherwise joined in the decision of the IEC. Id. In addition, a second member of the IEC, Matt Smith, dissented from assessing a double penalty against the Secretary for his spending of $1,278.90, but otherwise joined in the decision of the IEC. Id. 5

actions and provides the standards for judicial review of the agency action unless a specific statutory provision conflicts with it.”). Under § 24-4-106(7), C.R.S., the court shall affirm the IEC’s action unless it finds that the action “is arbitrary or capricious, a denial of statutory right, contrary to constitutional right, power privilege, or immunity, in excess of statutory jurisdiction, authority, purposes, or limitations, not in accord with the procedures or procedural limitations of this article or as otherwise required by law, an abuse or clearly unwarranted exercise of discretion, based upon findings of facts that are clearly erroneous on the whole record, unsupported by substantial evidence when the record is considered as a whole, or otherwise contrary to law ….” II. The IEC properly exercised its jurisdiction over ethics issues arising under Article XXIX and “other standards of conduct and reporting requirements as provided by law.” The Secretary argues the IEC lacked jurisdiction over the Complaint, claiming the IEC’s jurisdiction is limited to enforcing the “ban on gifts.” 6 The Court should reject this argument because it ignores the plain language of Article XXIX and the IEC’s enabling statute. A. Standard of Review – Question of Jurisdiction.

The question of whether the IEC exceeded its jurisdiction involves the interpretation of both Amendment XXIX and § 24-18.5-101, C.R.S., raising
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The Secretary raised this issue before the IEC. Motion to Dismiss, R.000216-22. The IEC rejected it. Order on Motion to Dismiss, R. 000733-35. The Secretary again raised this argument in a Motion for Temporary Restraining Order and/or Preliminary Injunction. Plaintiff’s Motion for Temporary Restraining Order and/or Preliminary Injunction, p. 12-13. This Court denied it. 6

questions of law the Court reviews de novo. Rocky Mountain Animal Defense v. Colo. Div. of Wildlife, 100 P.3d 508, 513 (Colo. App. 2004) (interpretation of a constitutional amendment); Specialist Rests. Corp. v. Nelson, 231 P.3d 393, 397 (Colo. 2010) (statutory interpretation). Appellate courts construe statutes according to their plain and ordinary meaning, and defer to an agency’s interpretation of its own enabling statute. Nelson, 231 P.3d at 397. When interpreting a constitutional amendment like Article XXIX courts give effect to the electorate’s intent in enacting the amendment. See Colo. Ethics Watch v. Senate Majority Fund, LLC , 269 P.3d 1248, 1253 (Colo. 2012). To determine voter intent, words should be given their ordinary and popular meaning. Id. at 1253-1254. If the language of the amendment is clear and unambiguous, it must be enforced as written. Id. at 1254; Colo. Cmty. Health Network v. Colo. General Assembly, 166 P.3d 280, 283 (Colo. App. 2007). B. The IEC had jurisdiction to address the complaint against the Secretary. 1. In addition to the gift ban, the IEC has jurisdiction over ethics issues arising under Article XXIX and other standards of conduct and reporting requirements.

Article XXIX consists of nine sections, not just the gift ban upon which the Secretary focuses. Section 1 sets forth the amendment’s purposes and findings, section 3 is the gift ban, section 5 establishes the IEC, and section 6 sets forth penalties.

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Article XXIX’s section 5 creates the IEC and defines its jurisdiction. This section also empowers the IEC to hear complaints “on ethics issues arising under Article XXIX and others standards of conduct and reporting requirements as provided by law.” Colo. Const. art. XXIX, § 5(1). See also Colo. Const. art. XXIX, § 5(3)(a) (referencing the Commission’s jurisdiction to hear complaints on ethics issues arising under other standards of conduct and reporting requirements). The IEC’s enabling statute contains virtually identical language. § 24-18.5-101(4)(a), C.R.S. The clear and unambiguous language of both Article XXIX and the IEC’S enabling statute therefore provide that, in addition to the gift ban, the IEC has jurisdiction over ethics issues arising under other standards of conduct. Moreover, since its inception, the Commission regularly and consistently has exercised jurisdiction over ethics issues arising under standards of conduct other than those contained in Article XXIX. See, e.g., list of examples of the IEC exercising jurisdiction over standards of conduct other than those set forth in Article XXIX, attached and incorporated hereto as Exhibit 3. The Commission’s Rules, adopted pursuant to an explicit grant of authority to administer and enforce Article XXIX (Colo. Const. art. XXIX, § 5(3)(d)), also reflect the Commission’s interpretation of Article XXIX as providing the Commission with jurisdiction to hear ethics issues arising under standards of conduct other than those set forth in Article XXIX. See 8 CCR 1510-1, sec. 7.A; 8 CCR 1510-1, sec. 8.A. Deference should be given to an agency’s interpretation in construing constitutional provisions and statutes relevant to its activities. Colo. Citizens for Ethics in Gov’t v. Comm. for the 8

Am. Dream, 187 P.3d 1207, 1214 (Colo. App. 2008). Cf. Smith v. Farmers Ins. Exch., 9 P.3d 335, 340 (Colo. 2000) (providing that great deference is given to an agency’s interpretation of a statute when that agency is charged with implementing the statute’s provisions). For these reasons, the Commission has jurisdiction over ethics issues arising under standards of conduct as provided by law, other than the gift ban. 2. The Commission had jurisdiction over the facts of this case and the standard of conduct set forth in § 24-9-105, C.R.S., and other standards of conduct provided by law.

The Complaint alleges that the “Secretary’s Florida trip was manifestly personal and political, in which he participated only in partisan events, not in pursuit of state business.” Complaint, R. 001036. The Complaint also claims that the Secretary used discretionary funds for other than “official public business.” Id., R. 001036. These allegations raise ethics issues regarding the possible misuse of public funds, issues addressed by standards of conduct set forth in Colorado statutes and rules. These standards can be found in many places, including Article 18 of Title

24, immediately preceding the IEC’s enabling statute. Title 24 pertains to “State Government,” Article 18 is entitled “Standards of Conduct,” and Part 1 of Article 18 is “Code of Ethics.” Under Article 18, Part 1 are provisions regarding “Public trust – breach of fiduciary duty,” § 24-18-103, C.R.S., which provides that a public officer “shall carry out his duties for the benefit of the people of the state.”

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Section 24-9-105(1)(e), C.R.S. provides yet another “standard of conduct” with respect to how public officials spend money out of their discretionary account. By statute, the Secretary has available to him an annual amount of five thousand dollars. While these funds are referred to as “discretionary funds”, see the title of § 105, the public officer’s use of these funds is not unlimited. Rather, § 105 makes clear that the funds are “for expenditure in pursuance of official business as each elected official sees fit . . . .” § 24-9-105(1), C.R.S. (emphasis added). Accordingly, when a public officer is reimbursed for expenditures that are not in pursuance of official business, then the public officer has violated this standard of conduct and has breached the public trust. As the IEC noted, “official business” is not defined in § 105. IEC Decision, R. 001355. The IEC therefore looked to the State Fiscal Rules, set forth at 1 Code Colo. Regs. 101-1, for guidance. Chapter 5 of the State Fiscal Rules, entitled “Travel”, sets forth the rules for reimbursement of travel expenses. Rule 7 bars reimbursement of any travel expenses for “[p]ersonal expenses incurred during travel that are primarily for the benefit of the Traveler and not directly related to State Business” or for “Political Expenses”. 1 Code Colo. Regs. 101-1, Rule 5-7.3 & 7.4. Rule 2.13 defines “Political Expenses” as those expenses “incurred in relation to activities that are primarily designed to further the interests of a candidate, political party, or special interest group.” 1 Code Colo. Regs. 101-1, Rule 5-2.13. Rule 2.15 defines “State Business” as “[o]fficial State business or other duties

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undertaken for State purposes and for the benefit of the State.” 1 Code Colo. Regs. 101-1, Rule 5-2.15. Rule 3.3.2 states that “travel charged to the State regardless of the funding source, shall be for the benefit of the State; . . . and is only for the time period necessary.” 1 Code Colo. Regs. 101-1, Rule 5-3.3.2. Rule 11.7 provides that when a trip is partially related to State Business and personal or political purposes, then the person “shall make a reasonable allocation of the expenses between State Business and personal or political purposes. . . .” 1 Code Colo. Regs. 101-1, Rule 511.7. As a result, the IEC properly exercised its jurisdiction over the Complaint, which raised ethics issues arising under standards of conduct provided by Colorado law. Neither the IEC’s investigation nor the evidence introduced at hearing gave rise to facts which required the IEC to dismiss the Complaint for lack of jurisdiction. See IEC Decision, R. 001352-58 (setting forth the factual findings, based on the investigation and the evidence introduced at the hearing, underlying the IEC’s decision). C. The Secretary’s argument that the IEC’s jurisdiction is limited to “the gift ban” ignores the plain language of Article XXIX and the IEC’s enabling legislation and misplaces reliance on the Bluebook and Developmental Pathways.

Rather than confront the plain language of Amendment XXIX and the IEC’s enabling statute, the Secretary attempts to limit the IEC’s jurisdiction to violations of the gift ban. His attempt fails. First, he focuses only on the gift ban’s language,

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ignoring the remainder of Amendment XXIX and the IEC enabling statute. As set forth above, the IEC’s jurisdiction is broad and extends to the violations alleged here. Second, he misplaces his reliance on the language from the 2006 Bluebook. As a threshold matter, the Court does not need to consider the Bluebook’s language unless it finds that Amendment XXIX and the IEC’s enabling statute are ambiguous with respect to jurisdiction. Colo. Cmty. Health Network, 166 P.3d at 283. In such a case, a court may consider the ballot title, the submission clause and the Bluebook analysis of the ballot proposal. Id. Here, the Secretary does not argue that the relevant language is ambiguous; he just focuses on certain words while ignoring others. Even assuming the language is ambiguous, which it is not, the Bluebook’s Summary and Analysis section states, on page 10: “Any person can file a complaint with the commission alleging a violation of the proposal, or any other standard of conduct or reporting requirement specified in law.” (emphasis added). The Bluebook therefore supports the IEC’s jurisdiction over this matter. The Secretary also misplaces his reliance on Developmental Pathways v. Ritter, 178 P.3d 524, 526 (Colo. 2008). In Developmental Pathways, the Court reviewed only the constitutionality of the gift ban; it did not address any issues related to the IEC’s jurisdiction. In fact, the IEC did not exist at the time the Court issued its ruling. Moreover, the Attorney General’s office was not representing the IEC in that matter. The Attorney General’s comments, made while representing

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Governor Ritter, must therefore be viewed in the context of the issues before the Court, and are not binding on, or even relevant to, this matter. D. The IEC’s jurisdiction extends to misuse of the Secretary’s discretionary fund.

The Secretary also argues that the issue of the proper use of the Secretary’s discretionary fund lies outside of the IEC’s authority. His argument is not persuasive. While presuming that the IEC’s jurisdiction is limited to enforcing the gift ban, the Secretary argues that his expenditures were not a gift. This misses the point. The Secretary’s actions do not involve the gift ban, but rather, concern ethical violations arising under Article XXIX and other statutory provisions addressing how public officials spend state money. Specifically, as the IEC held, his conduct violates the statute concerning a public official’s fiduciary duty to the state and its people, see § 24-18-103(1), C.R.S., and the statute stating that a public official may spend discretionary funds “in pursuance of official business.” The Complaint before the IEC alleges facts violating these laws. These laws, and the IEC’s ability to enforce them, undermine several other arguments the Secretary makes. Although the Secretary argues that he has control over how he spends his discretionary funds (Opening Brief, p. 15), his control is limited by the “standards of conduct” pertaining to public officials. See § 24-18-101 et seq., C.R.S. He also argues that the General Assembly has not specified the standards for spending discretionary funds. Id. It has – such funds must be used

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for official business – and the IEC properly looked to the State Fiscal Rules for guidance. IEC Decision, R. 001355. The Secretary claims he did not and could not “influence himself” by spending discretionary funds, (Opening Brief, at p. 18) but he does so under the assumption that the IEC’s jurisdiction is limited to the gift ban. As demonstrated herein, it is not. Finally, the Secretary argues that the IEC may not create liability based on § 24-18-103(1)’s “statement of purpose.” Opening Brief, p. 19-20. This argument also is misleading. Section 24-18-103 exists under Article 18,’s “Standards of Conduct,” and “Code of Ethics.” Subsection one of the statute imposes the mandate that a public officer “shall carry out his duties for the benefit of the people of the state.” § 24-18-103(1), C.R.S. Subsection two states that a public officer “whose conduct departs from his fiduciary duty is liable to the people of the state…” § 24-18-103(2), C.R.S. Subsection two also gives the district attorney permissive authority to bring appropriate judicial proceedings, not exclusive authority, as the Secretary suggests. In sum, none of the Secretary’s arguments undermine the conclusion that the IEC possesses jurisdiction over the alleged violations of Article XXIX and the “Standards of Conduct” found in Article 18 or Title 24, C.R.S.

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III.

The IEC did not act arbitrarily and capriciously in determining the Secretary’s expenditures violated the law. The Secretary argues that, because he spent his discretionary funds

appropriately, the IEC acted arbitrarily and capriciously in ruling otherwise. The record does not support his contention. A. Standard of Review.

“Administrative proceedings are accorded a presumption of validity and regularity, and all reasonable doubts as to the correctness of administrative rulings must be resolved in favor of the agency.” Wildwood Child & Adult Care Program, Inc. v. Colo. Dep't of Pub. Health & Env't, 985 P.2d 654, 655 (Colo. App. 1999) (citing Van Sickle v. Boyes, 797 P.2d 1267 (Colo. 1990)). “The burden is on the party challenging the agency action to overcome the presumption that the agency's acts were proper.” Id. (citing Colonial Bank v. Colo. Fin. Servs. Bd., 961 P.2d 579 (Colo. App. 1998)). In determining whether an administrative agency’s decision is arbitrary or capricious, the court must determine whether a reasonable person, considering all of the evidence in the record, would fairly and honestly be compelled to reach a different conclusion. If not, no abuse of discretion has occurred and the agency decision must be upheld. Ramseyer v. Colo. Dep't of Soc. Servs., 895 P.2d 1188, 1192 (Colo. App. 1995). Under this standard, if there is substantial evidentiary and legal support for the agency decision, it will not be overturned. Id.

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B.

Because the record supports the IEC’s decision, it should not be overturned.

The IEC concluded that the Secretary violated ethical standards in two ways: (1) for his reimbursement of $1,278.90 for travel and hotel stay in Sarasota Florida for the RNLA Conference and the RNC; and (2) for receiving the amount remaining in his discretionary fund account of $117.99 without supporting documentation or detail of any expenses incurred. IEC Decision, R. 001352-58. There is substantial evidentiary and legal support for this determination. The record supports the IEC’s conclusion that the Secretary violated his ethical obligations in receiving reimbursement (in the amount of $1,278.90) for his trip to the RNLA Conference. Specifically: • • The Secretary is a public officer as defined by the Article XXIX, section 2(6), of the Colorado Constitution. 6/7/2013 Hearing Tr. p. 317 ll. 20-23, Ex. 1. The Secretary flew to Tampa, Florida to attend the RNLA Conference principally sponsored by the Republican National Lawyer’s Association on August 23, 2012, titled “National Election Law Seminar”. Trial Exhibit S, R. 001238-39; Trial Exhibit N, R. 001175. The Secretary was invited to attend and to participate in the RNLA Conference as a panelist on the topic of “The Department of Justice, the Role of the States, and Voter ID.” Trial Exhibit N, R. 001177. The RNLA Conference took place on August 24-25, 2012 in Sarasota, Florida. Trial Exhibit N, R. 001175. In order to sign up for the RNLA Conference, a participant must agree with the RNLA Mission Statement, which includes advancing Republican ideals and party goals. Trial Exhibits 14 & 15, R. 001027-29. More than one of the topics at the RNLA Conference did not pertain to the law in Colorado and was concerned with partisan values and/or politics. Trial Exhibit N, R. 001175-86. 16

• •

The Secretary did not recall details or specifics of the RNLA Conference, including what he discussed as a scheduled speaker. 6/7/2013 Hearing Tr. p. 327 l. 9 - p. 328 l. 14, Ex. 1. The Secretary stayed at the Ritz-Carlton hotel in Sarasota, Florida on August 23, 24, and 25, 2012. Trial Exhibit S, R. 001238. The amount the Secretary requested reimbursement for the RNLA Conference was $1,278.90. This included costs for lodging of $694.37 for August 23, 24, and 25; airfare to and from Florida of $498.78; meals of $66.05; and luggage of $20.00. Trial Exhibit 7, R. 001009-10; Trial Exhibit 11, R. 001019-23. The Secretary received a discounted rate for lodging for August 23 and 24, paying $145.00 per night. The Secretary paid the full rate of $269.00 on August 25. Trial Exhibit 11, R. 001019-23. On August 26, 2013, the Secretary travelled from Sarasota, Florida to the RNC in Tampa, Florida. He planned to return to Denver on September 1. Trial Exhibit S, R. 001238-39. Costs of lodging and meal associated with the Secretary’s stay at the RNC were paid out of campaign funds, and some personal funds. 6/7/2013 Hearing Tr. p. 259 ll. 17 – 20, Ex. 1. The Secretary was reimbursed $1,278.90 from the discretionary funds provided to the Secretary of State pursuant to § 24-9-105, C.R.S. Trial Exhibit 2, 000994-98 (see line item for payment of $1,452.52 on September 6, 2012). In requesting reimbursement for the expenses, the Secretary stated that they were “incurred in pursuant of state business” and that they were “incurred while meeting with constituents, county clerks, lobbyists, staff and legislators to discuss state business.” Trial Exhibit A, R. 001045. The Secretary testified that he asked to be reimbursed the $1,278.90 for the RNLA Conference from the discretionary funds because he knew that given that the sponsor had the word Republican in its name, the conference could be subject to scrutiny, and he believed that he had more leeway with the use of these funds than with monies from the Department of State’s travel budget. 6/7/2013 Hearing Tr. p. 358 l. 23 - p. 359 l. 18, Ex 1. 17

• •

• • •

The Secretary repaid $1,278.90 to the state on May 21, 2013, 17 days before the scheduled hearing date. Trial Exhibit XX, R. 001272. There is no legal requirement that the Secretary of State be a licensed attorney. See, e.g., §§ 24-21-101 et seq., C.R.S. The Secretary of State’s office was advised by the State Controller in November of 2011 that the discretionary fund was to reimburse only expenses used in pursuance of official state business, and not for personal use. Trial Exhibit 3, R. 000999-001000. The record also supports the IEC’s conclusion that the Secretary violated his

ethical obligations by receiving his remaining discretionary funds (in the amount of $117.99) without receipts or other supporting documentation. Specifically: • • On July 5, 2012, the Secretary requested payment of “any remaining discretionary funds.” Trial Exhibit 1, 000993. The Secretary did not provide any receipts, documentation, or other information to support reimbursement of these funds. Trial Exhibit 1, 000993. Other requests for reimbursement from the discretionary fund from the Secretary in evidence contained receipts and/or documentation. Trial Exhibit T, R. 001241-42; Trial Exhibit U, R. 001248-49; Trial Exhibit V, R. 00125456; Trial Exhibit X, R. 001264-66; Trial Exhibit Y, R. 001273-80; Trial Exhibit Z, R. 001281-83; Trial Exhibit AA, R. 001049 (referencing documentation); Trial Exhibit DD, R. 001113-14; Trial Exhibit EE , R. 001117-18; Trial Exhibit FF, R. 001121-23. The Secretary of State’s office was advised by the State Controller that the discretionary fund was to reimburse only expenses used in pursuance of official state business, and not for personal use, and that all expenditures should have supporting documentation. Trial Exhibit 3, R. 000999-001000. The Secretary testified that he knew that without receipts, amounts paid to him from his discretionary account would be viewed as personal income subject to taxation. 6/7/2013 Hearing Tr. p. 349 ll. 2 – 18, Ex. 1. He did not know if that money was added to his W-2. Id. The Secretary therefore treated and intended to treat the reimbursement of the balance of his discretionary fund as personal income. 18

The Secretary was paid $117.99, through payments of $8.99 and $109.00. Trial Exhibit BB , R. 001066. A reviewing court must uphold an agency’s factual findings so long as there is

competent evidence in the record to support them. Shupe v. Boulder Cnty., 230 P.3d 1269, 1273 (Colo. App. 2010). Here the evidence amply supports the IEC’s factual findings. Notably absent from the Opening Brief is any challenge to these facts. Instead, the Secretary argues that there is no evidence to support the IEC’s determination. Opening Brief, p. 25. The record refutes his argument as set forth previously. The Secretary’s characterization of the payments as “proper” does not negate competent evidence in the record to the contrary. Simply because the RNLA Conference was accredited for continuing legal education credit does not mean that the charges were not partisan or personal. A grant of CLE credit does not equal compliance with ethical standards. Likewise, the Secretary’s argument that the $117.99 could be supported after-the-fact does not alter the substantial and competent evidence in the record supporting the IEC’s decision. Even if the Secretary can justify reimbursement for more than $117.99, that does not change the fact that at the time the Secretary made his request for reimbursement, it was unsubstantiated and unsupported. Trial Exhibit 1, 000993.

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Moreover, the Secretary asked for the remaining funds without concern for whether they were due to him or not. When asked why he took the $117.99, the Secretary testified that “there is [sic] a lot of other expenses that I incur that I don't get official reimbursement from . . . .” 6/7/2013 Hearing Tr. p. 369 ll. 7-9, Ex. 1. The Secretary also stated that it was not worth his time to “go through every single penny and mile” to support the amounts he claimed were due to him. 6/7/2013 Hearing Tr. p. 371 ll. 3-16, Ex. 1. Thus, the Secretary was not asking for reimbursement for the expenses that his attorneys have now compiled in a misguided attempt to justify the Secretary’s violation. In sum, there is substantial evidentiary and legal support for the IEC’s determination. The decision was neither arbitrary nor capricious. IV. The IEC did not violate the Secretary’s right to due process. Next, the Secretary argues the IEC violated his right to due process, advancing five contentions in support of his argument. Each is addressed below, and each should be rejected. A. Article XXIX and the IEC’s enabling statute are not unconstitutionally vague.

The Secretary argues that the phrase “other standards of conduct” is unconstitutionally vague. When faced with a void for vagueness challenge, the Court examines a constitutional amendment in the same way it would examine a statute. Table Servs., Ltd. v. Hickenlooper, 257 P.3d 1210, 1214 (Colo. App. 2011). Both are presumed to be constitutional, and the parties seeking to set a provision

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aside must prove their case beyond a reasonable doubt. Id.; see Simpson v. Cotton Creek Circles, LLC , 181 P.3d 252, 261 (Colo. 2008). The Court indulges every reasonable presumption in favor of a constitutional amendment which the people have adopted at a general election. Glendale v. Buchanan, 578 P.2d 221, 224 (Colo. 1978). A statute or regulation is void only if it is so vague that persons of common intelligence must necessarily guess as to its meaning and differ as to its application. Loonan v. Woodley, 882 P.2d 1380, 1389 (Colo. 1994). Otherwise, it will be upheld if it provides fair notice of prohibited conduct and its language does not result in arbitrary and discriminatory enforcement. Id. Constitutional provisions, like statutes, often contain broad terms to allow their applicability to various circumstances. Stamm v. City & County of Denver, 856 P.2d 54, 56 (Colo. App. 1993). “[G]enerality is not the equivalent of vagueness, and . . . terms used need not be defined with mathematical precision in order to withstand a vagueness challenge.” Id. Here, the Secretary claims that “the laws creating the IEC’s jurisdiction are so vague that [the] Secretary and other elected officials cannot know what is prohibited.” Opening Brief, p. 32. The Secretary focuses on the phrase “other standards of conduct” claiming its vagueness is “unconscionable” and that he could not know what “other standards of conduct” could possibly mean. By making these arguments, the Secretary appears to ignore that he is a public official subject to specific “Standards of Conduct” and a “Code of Ethics” set 21

forth by statute, discussed above. The IEC held that the Secretary violated certain standards of conduct under the “Code of Ethics” related to his fiduciary duty, set forth in Article 18. IEC Decision, R. 001352-58. Even in this case, the Secretary sufficiently understood the primary standard of conduct the IEC applied at the time the Complaint was filed because he cited to it in his Response to the Complaint. Response, R. 000239 (footnote 27, citing § 24-9-105(1), C.R.S.) Thus, the phrase “other standards of conduct” is not so vague that reasonable persons have to guess at what the phrase means. While the phrase is broad, so are the standards that apply to public officials, and those at issue in this case are defined by statute. B. The Secretary received sufficient notice of the charges against him.

The Secretary also complains that the IEC failed to identify the charges against him. The record does not support his complaint, and it does not amount to a due process violation. Due process only requires that a respondent be notified of the nature of the proceedings and apprised of the right to present evidence on his or her own behalf. Colo. Bd. of Medical Exam’rs v. Boyle, 924 P.2d 1113, 1117 (Colo. App. 1996); see Norton v. Colo. State Bd. of Medical Exam’rs, 821 P.2d 897, 901 (Colo. App. 1991). Under the APA an agency must give a respondent notice of the “the legal authority and jurisdiction under which [the hearing] is to be held, and the matters of fact and law asserted.” § 24-4-105(2)(a), C.R.S.

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Here, the Secretary received sufficient notice under the APA. First, CREW’s original complaint described, in detail, the Secretary’s alleged improper expenditures. Complaint, R. 001032-48. Second, CREW requested fines pursuant to section 6, of Article XXIX, which imposes liability whenever a public officer “breaches the public trust for private gain”. Id., R. 001033. Third, in his response to the complaint, the Secretary acknowledged that any expenditures out of his discretionary account must be made in pursuance of official business. Response, R. 000240. Fourth, the Secretary was served with a Prehearing Order and an Amended Pre-Hearing Order, both of which set forth the specific “standards of conduct and/or reporting requirements” at issue, including citations to the fiduciary duty statute and the discretionary funds statute. Prehearing Order, R. 000881-83; Amended Prehearing Order, R. 000937-40. Finally, the Secretary appeared at the hearing, testified on his own behalf, and argued that his expenditures were proper. 6/7/2013 Hearing Tr., p. 313 l. 11 – p.379 l. 8. Although the Secretary states that he asked the IEC to identify the charges against him, he does not provide any citations to the record, nor does the record reveal any formal requests for a more definite statement or something similar. Instead, the record contains motions reiterating the same vagueness arguments made here, and does not refute the pre-hearing order the Secretary received. Distilling this case to its essence, the facts are not complicated, were set forth at the outset, and have not been seriously contested. The violations at issue are also not mysterious; the conduct at issue is specifically covered by statute and Article XXIX, 23

and the Secretary was given notice of those statutes to the extent he was not already aware of them, and demonstrated his awareness of the discretionary funds statute in his response to the complaint. Under these circumstances, the Secretary received notice of the facts and law at issue and was provided with an opportunity to be heard and to defend himself. Additionally, even assuming this notice was somehow inadequate, the Secretary has not shown prejudice. See Joseph v. Mieka, 282 P.3d 509, 520 (Colo. App. 2012) (concluding there was no prejudice where the respondents received notice of the witnesses identity and contact information three days before the hearing, crossexamined him at hearing, and did not articulate what they would have done differently). C. The IEC did not abuse its discretion in ruling on matters related to discovery and trial management.

The Secretary claims he was denied the right to conduct discovery and to confront witnesses, pointing to the IEC’s decisions to preclude an expert from testifying and to preclude former secretaries of state from testifying. The IEC did not abuse its discretion. An agency serving an adjudicatory function is granted wide discretion on matters related to discovery and trial efficiencies. Under the APA, the person or panel conducting the hearing “may exclude incompetent and unduly repetitious evidence.” § 24-4-105(7), C.R.S.

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The Secretary does not refer to any discovery rulings in his brief; instead he argues broadly that the IEC violated his right to confront witnesses under the Sixth Amendment. As the Secretary recognizes, the Sixth Amendment’s application is limited to criminal prosecutions. See People v. Loveall, 231 P.3d 408, 420 n.18 (Colo. 2010). Nevertheless, citing only to the Sixth Amendment and related authority, the Secretary argues the IEC violated his due process rights when it limited the evidence he sought to present. The only evidentiary ruling he cites is the IEC’s decision to preclude Kevin Collins’ testimony, whom the Secretary intended to call as an expert witness in governmental accounting. 6/7/2013 Hearing Tr., p. 243 ll. 15-16, Ex. 1. The IEC by unanimous decision ruled that the expert’s testimony would not be helpful because his expertise lay in auditing, not the state fiscal rules, and his testimony not relating to the fiscal rules would not be relevant. Id., p. 244 l. 17 – p. 254, l. 19, Ex. 1. Expert testimony must “assist the trier of fact to understand the evidence or to determine a fact in issue.” CRE 702. A trial court has broad discretion to determine the admissibility of expert testimony and will not be reversed absent an abuse of discretion. Silverberg v. Colantuno, 991 P.2d 280, 291 (Colo. App. 1998). The IEC did not abuse its discretion. The Secretary argues that his expert would have opined on what constitutes “official business.” However, as Commissioner Grossman stated, “we have a pretty straightforward issue as to whether or not the expenditures we are talking about were appropriate under the 25

standards and statute and under the fiscal rules is pretty clear, there has to be official State business purpose.” 6/7/2013 Hearing Tr., p. 246 ll. 2-6, Ex. 1. The expert was not qualified as an expert with respect to the fiscal rules, and the IEC concluded that his testimony outside of the fiscal rules was not relevant or helpful, and was a waste of time under CRE 403. The ruling should not be overturned. With respect to the prior secretaries of state and other witnesses, the Secretary fails to cite to the record where the court ruled he was precluded from calling them. A refusal to issue a subpoena is not the same as a refusal to allow testimony. To the contrary, the record shows that the IEC authorized the Secretary to issue subpoenas to former secretaries of state and members of his office. 5/23/13 Meeting Minutes, R. 001384. Moreover, the Secretary did call former secretary of state Bernard Buescher. 6/7/2013 Hearing Tr., p. 243 ll. 15-16, Ex. 1. In any event, the Secretary has not shown how these witnesses’ testimony have any relevance to the propriety of his expenditures under the applicable statues and fiscal rules, and he cannot show prejudice from their failure to testify. See Mieka, 282 P.2d at 520. D. The IEC did not abuse its discretion when denying the Secretary’s request to recuse two Commissioners.

The Secretary also argues his right to due process was violated because two Commissioners did not recuse themselves. His argument is not persuasive. Under § 24-4-105(3) of the APA, members of an agency may recuse themselves if a party files, in good faith, a timely and sufficient affidavit of personal

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bias of a member. (emphasis added). The agency shall rule on the allegations in such affidavit, and a member may withdraw “if he or she deems himself or herself disqualified for any good reason … unless his or her withdrawal makes it impossible for the agency to render a decision.” On appeal, an adjudicatory hearing is presumed to be impartial, though the presumption is rebuttable. Venard v. Dep’t of Corrs., 72 P.3d 446, 449 (Colo. App. 2003). The appellate court treats members of a quasi-judicial panel as judges, considering the standards set forth in Colo. R. Civ. P. 97. A motion to recuse and accompanying affidavit are sufficient if they “state facts from which it may be reasonably inferred that the judge has a bias or prejudice that will prevent [the judge] from dealing fairly with the party seeking recusal.” Venard, 72 P.3d at 449 (quoting Johnson v. Dist. Court, 674 P.2d 952, 956 (Colo. 1984) and People v. Botham, 629 P.2d 589, 595 (Colo. 1981)). However, mere allegations, opinions or conclusions unsubstantiated by facts are not legally sufficient to mandate disqualification. Goebel v. Benton, 830 P.2d 995, 999 (Colo. 1992). Here, the Secretary filed motions to recuse Commissioner Marshall (R. 000770-76) and Commissioner Grossman. R. 000861-69. The IEC denied both motions by unanimous decision from all five Commissioners. 3/4/13 Meeting Minutes, R. 001370. The IEC later granted the Secretary leave to file an amended motion to recuse Commissioner Grossman. 4/30/13 Meeting Minutes, R. 001378. After hearing oral argument, the IEC denied this motion by unanimous vote because “the Motion did not contain facts from which it may be inferred that 27

Commissioner Grossman has a bias or prejudice that will prevent him from dealing fairly with Secretary Gessler or the office of the Secretary of State.” 5/6/13 Meeting Minutes, R. 001382. Commissioner Grossman also stated that the allegations in the affidavit were false. Id. The Secretary now argues that the affidavits before the IEC showed that both Commissioner Marshall and Chairman Grossman were biased. Each argument is addressed below, and neither shows a bias or prejudice sufficient for recusal. 1. Commissioner Marshall.

The Secretary relies on speculation in asserting that Commissioner Marshall was biased. Opening Brief, p. 39-42. First, he cites to the statement, made in a hallway after a hearing over two years ago, that “questioned the Secretary’s motives in unrelated legal proceedings.” He also cites to her statement that “she was going to keep an eye on the Secretary.” Id., p. 41. The Affidavit was made by a member of the Secretary’s staff, based on his recollection of events in the summer of 2011. The Secretary also speculates that Commissioner Marshall joined a written order against the Secretary without having fully considered the matter in advance of her decision. Motion to Recuse Commissioner Marshall, R. 000771. The Secretary did not submit an affidavit alleging these facts, but rather assumes “[t]here is no evidence that she had even read the Secretary’s … motion to dismiss or listened to a recording of the counsel’s January 7, 2013 oral argument.” Id., R. 000771-72. The Secretary ignores the possibility that Commissioner Marshall could have reviewed the motion and listened to the recording in private, and also ignores 28

the likely possibility that she conferred with other members of the panel before deciding to join the order. In fact, Commissioner Smith stated in an open meeting that “Commissioner Marshall reviewed all the material prior to ruling on motions…” 3/4/13 Meeting Minutes, R. 001371. Commissioner Smith also stated that both Commissioners Marshall and Grossman could be fair and impartial, and the remaining Commissioners concurred. Id. These facts, taken as true, do not show bias. The Secretary’s argument that Marshall “questioned the Secretary’s motives” after a 2011 hearing is an opinion about her subjective belief, not a fact. The hearsay statement upon which the Secretary bases his argument is vague, ambiguous, and lacks context. Additionally, the statement was made over two years ago, before Commissioner Marshall began serving on the IEC. In response to the Secretary’s recusal motion, Commissioner Marshall stated on the record that she could be fair and impartial, and her fellow Commissioners agreed unanimously. 3/4/13 Meeting Minutes, R. 001371. Thus, the affidavit does not demonstrate as a matter of fact that Commissioner Marshall was biased toward the Secretary. The Secretary’s second argument is not supported by any affidavit. Additionally, his argument is based on speculation as to what Commissioner Marshall did or did not review or consider before joining the order, and is belied by Commissioner Smith’s comments in open meeting. As a matter of law, his second argument must be rejected as unsubstantiated by facts. See Goebel, 830 P.2d at 999. 29

2.

Commissioner Grossman.

The Secretary submitted two affidavits in an attempt to show bias: (1) the affidavit of Stephen Bouey (R. 000870-71) showing Commissioner Grossman’s campaign contributions; (2) the affidavit of Suzanne Staiert (R. 000896-900), claiming that, based on hearsay and circumstantial evidence, she believed Commissioner Grossman referred to her as “the Dragon Lady”, along with a transcript of a hearing before the IEC (R. 000901-16) where Commissioner Grossman stated that he did not instruct an investigator to investigate the Secretary’s use of his discretionary fund on purchasing an alarm system. None of the affidavits demonstrate bias. The Bouey affidavit merely shows the Commissioner’s minor campaign contributions, some of which were to his friends who ran against the Secretary. A minor campaign contribution to a friend does not demonstrate a bias against his political opponent for purposes an ethics inquiry. Moreover, the voters contemplated that the IEC’s members would be involved with different political parties as evidenced by the requirement that the Commission not be made up of more than two members of a single political party. Colo. Const. art. XXIX, § 5(2)(b) (providing that “[n]o more than two members [of the IEC] shall be affiliated with the same political party.”) See also Colo. Const. art. XXIX, § 5(2)(a) (providing that certain IEC Commissioners are appointed by the politically elected Colorado senate, Colorado house of representatives, and Colorado governor). 30

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. The transcript fails to show bias, and actually supports Commissioner Grossman’s impartiality. The Secretary’s lawyer accused the Commissioner of instructing an independent investigator to investigate the Secretary’s alarm system purchase. The Secretary did not present any evidence supporting his accusation, and in response, Commissioner Grossman plainly stated that he gave no such instruction. The Secretary did not submit an affidavit or any other form of credible evidence to contrary. The Secretary did not make his remaining arguments regarding Commissioner Grossman’s bias below, and has therefore waived them. See Moody v. People, 159 P.3d 611, 614 (Colo. 2007). The affidavits and transcript the Secretary presents do not demonstrate as a matter of fact that Commissioner Grossman was biased. Instead improperly rely solely on speculation, hearsay, and conjecture. 3. Harmless Error.

Even assuming either or both Commissioners should have recused themselves, the court may affirm for harmless error. Any error in an administrative proceeding is harmless if the Respondent does not show prejudice. Mieka, 282 P.3d at 520. Any error in not recusing was also harmless because the panel found that the Secretary had committed ethics violations in votes of 5-0 (RNLA Conference trip) and 4-1 (remaining funds in the discretionary account).

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Removing the votes of Commissioners Grossman and Marshall would have resulted in votes of 3-0 and 2-1. E. The IEC did not assume an improper prosecutorial role.

Finally, the Secretary contends that his due process rights were violated because the IEC assumed in improper prosecutorial role by “making up its own legal allegations against the Secretary separate from CREW’s complaint.” The Court should reject this final contention. The Secretary relies primarily on DeKoevend v. Bd. of Educ. of W. End Sch. Dist. RE-2, 688 P.2d 219, 227 (Colo. 1984). In DeKoevend, a case concerning a school board’s action against a teacher, the Court found that the teacher’s due process rights were violated because the school’s superintendent and principal participated in the school board’s deliberations. Id. The Court relied on Weissman v. Bd. Of Educ., 547 P.2d 1267, 1276 (Colo. 1976), which held that it was improper for the school board’s attorney, who had acted in a prosecutorial role during the evidentiary hearing before the board, to participate in the board’s deliberations. This case is unlike DeKoevend and Weissman. The Secretary does not argue that a third party improperly influenced the IEC’s deliberations. Rather, he claims the IEC assumed an improper prosecutorial role by essentially doing its job. Here, the IEC received CREW’s complaint, correctly determined that it was not frivolous, referred the investigation to an independent investigator, and then issued a pre-hearing order, notifying the respondent of the date of the hearing, the possible claims against him, and his right to present evidence. 32

This record does not demonstrate that the IEC acted as a prosecutor. To the contrary, it evaluated a complaint, gathered information from an independent investigation, and then set the matter for a hearing where it heard evidence from both parties. V. The Secretary’s First Amendment challenges should be rejected. A. The Secretary’s “as applied” challenge fails as the State has no obligation to subsidize the exercise of free speech and the Secretary failed to raise the issue in the administrative proceeding.

The Secretary argues that his rights to free speech and free assembly were violated by the IEC’s finding that the Secretary’s attendance and speech at a Republican sponsored event was improper. Opening Brief, p. 44-45, 46-48. In this regard, the Secretary argues that a strict scrutiny standard should be applied. Id., p. 45. The Secretary misframes the issue. The IEC did not find that the Secretary’s attendance and speech at the RNLA Conference in and of itself was improper. Rather, the IEC found that the Secretary violated the ethical standard of conduct in § 24-9-105, C.R.S., by using state funds to attend and speak at the RNLA conference. The government has no obligation to subsidize the exercise of free speech or assembly. Regan v. Taxation With Representation of Washington, 461 U.S. 540, 545-46 (1983). See e.g. Cammarano v. United States, 358 U.S. 498 (1959) (upholding a Treasury regulation that denied business expense deductions for

33

lobbying activities by deciding that the First Amendment does not require Congress to subsidize lobbying); Negron v. Golder, 111 P.3d 538 (Colo. App. 2004) (finding no constitutional right to the government paying for photocopying services). Thus, strict scrutiny is not applicable. See Taxation With Representation of Washington , 461 U.S. at 549-550 (stating that the Supreme Court has held in several contexts that a legislature's decision not to subsidize the exercise of a fundamental right does not infringe the right, and thus is not subject to strict scrutiny). As a result, the Secretary’s first amendment “as applied” challenges should be dismissed because the Secretary has no right to have the State subsidize his First Amendment rights of speech and assembly. Moreover, the Secretary failed to raise his First Amendment “as applied” challenges in the administrative proceedings below. A basic principle of appellate jurisprudence is that arguments not advanced in the trial court and on appeal generally are deemed waived. Moody, 159 P.3d at 614. While facial constitutional challenges may be raised for the first time on appeal from administrative agency’s final action, the same is not be true for “as applied” challenges. Williams v. Indus. Claim Appeals Office, 128 P.3d 335, 339 (Colo. App. 2006) (holding that “as applied” due process claim not preserved when not brought before agency for determination) (citing Horrell v. Dep't of Admin., 861 P.2d 1194, 1198 & n.4 (Colo. 1993)), rev'd on other grounds, Williams v. Kunau, 147 P.3d 33 (Colo. 2006). But see United Airlines v. Indus. Claim Appeals Office, 312 P.3d 235, 2013 COA 48, ¶ 27 (Colo. App. 2013) (distinguishing Williams and Horrell in dicta). 34

Here, the Secretary’s failure to raise his “as applied” First Amendment challenges before the IEC kept the IEC from making factual determinations that would have addressed the issues raised for the first time before this Court. Accordingly, the Secretary did not exhaust his administrative remedies or preserve this issue for judicial review, and this Court should not consider it now. B. The IEC’s jurisdiction over “ethics issues arising . . . under any other standards of conduct and reporting requirements as provided by law” neither is unconstitutionally vague nor overbroad under the First Amendment.

The Secretary contends that Colorado Constitution, Article XXIX’s grant of jurisdiction to the IEC over ethics issues provided for in “any other standard of conduct and reporting requirements as provided by law” is unconstitutionally vague and overbroad under the First Amendment. Opening Brief, p. 46. The Secretary’s facial challenges should also be denied. Facial challenges are disfavored because: (1) courts may be forced to rely on speculation; (2) courts may have to rely on constitutional law when unnecessary; (3) there is a risk of premature statutory interpretation; (4) courts may have to formulate constitutional rules broader than those required by the precise facts to which they would have applied; and (5) they may prevent laws from being implemented that embody the will of the people. Independence Institute v. Coffman, 209 P.3d 1130, 1136 (Colo. App. 2008). With respect to the Secretary’s First Amendment vagueness challenge, the IEC incorporates its due process vagueness discussion set forth on pages 20 through

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23 of this Answer Brief. Although a First Amendment vagueness challenge may be analyzed under stricter vagueness standards than a due process analysis (Coffman, 209 P.3d at 1137), for the same reasons this Court should reject the Secretary’s due process vagueness challenge, so too should this Court reject the Secretary’s first amendment vagueness challenge. “In First Amendment cases, an overbreadth challenge will not void a statute on its face unless the statute substantially chills constitutionally protected expression or activity.” People v. Janousek, 871 P.2d 1189, 1193 (Colo. 1994). Invalidating a law as facially overbroad should be done only as a last resort. Coffman, 209 P.3d at 1140; The Nat’l Gay Task Force v. Bd. of Educ. of the City of Okla., 729 F.2d 1270, 1273-74 (10th Cir. 1984). A party may establish a law is facially overbroad when a “substantial number” of applications are unconstitutional in relation to the statute’s legitimate sweep. Coffman, 209 P.3d at 1139-40. The Secretary’s brief fails to set forth any, let alone a “substantial number” of applications of the IEC’s jurisdiction which may be viewed as unconstitutional under the First Amendment. Even application of the IEC’s jurisdiction to the facts of this case exemplifies a constitutional application. As previously discussed, the IEC’s Order finding that the Secretary could not use state funds to attend a partisan event does not implicate any first amendment rights as the State need not subsidize the Secretary’s exercise of free speech or any other fundamental right. As a result, the Secretary’s overbreadth challenge should be denied.

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C.

Developmental Pathways is a gift ban case and has no application to the present matter.

The Secretary asserts that his First Amendment rights were violated in “exactly” the same manner that the Developmental Pathways plaintiffs feared their rights were violated. Opening Brief, p. 48-51 (citing Developmental Pathways v. Ritter, 178 P.3d 524 (Colo. 2008)). According to the Secretary, the Developmental Pathways decision supports the Secretary’s First Amendment challenges in this case. Id. Contrary to the Secretary’s assertions, the facts and legal standards applied in the present case are different from those examined in the Developmental Pathways matter. In that case, the Supreme Court’s review was limited solely to Article XXIX’s gift ban provisions. Developmental Pathways, 178 P.3d at 526. In contrast, this case involves § 24-9-105, C.R.S., an ethical standard of conduct provided by law, outside of Article XXIX. As a result, the Supreme Court’s analysis in the Developmental Pathways case is not relevant to the present matter and does not support the Secretary’s First Amendment claims. The Secretary also argues that the IEC’s ruling acts as a prior restraint and has a chilling effect on speech because he can no longer attend CLE’s or other social gatherings for fear of a future ethics complaint. As previously stated, the IEC’s ruling did not find his attendance in and of itself at the partisan sponsored CLE improper. Rather, the IEC found that it was improper to attend a partisan event with taxpayer funds. As the State does not have to fund the exercise of a

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fundamental right (see Taxation With Representation of Washington, 461 U.S. at 549-550), there can be no first amendment prior restraint based on the IEC’s ruling. CONCLUSION For the foregoing reasons, the IEC requests that this Court: (1) reject the Secretary’s requests for relief (Opening Brief, p. 51), and (2) affirm the IEC’s determination that the Secretary “breached the public trust for private gain using funds for personal and political purposes . . . .” and its imposition of a penalty against the Secretary in the amount of $1,514.88 pursuant to § 24-4-106(7), C.R.S. IEC Decision, R. 001356. Respectfully submitted this 17th day of December, 2013. JOHN W. SUTHERS Attorney General
Pursuant to C.R.C.P. 121, §1-26(7), a printable copy of this EServed document is maintained in the Office of the Attorney General for the State of Colorado

/s/ Joel W. Kiesey LISA BRENNER FREIMANN * First Assistant Attorney General RUSSELL B. KLEIN * First Assistant Attorney General JOEL W. KIESEY * Assistant Attorney General Attorneys for DEFENDANTS *Counsel of Record

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CERTIFICATE OF SERVICE This is to certify that I have duly filed and served the within ANSWER BRIEF upon all parties herein via the ICCES E-filing service at Denver , Colorado on December 17, 2013. Robert J. Bruce RJB LAWYER, LLC 1543 Champa Street, Suite 400 Denver, Colorado 80202 Michael R. Davis LAW OFFICE OF MICHAEL R. DAVIS, LLC 3301 West Clyde Place Denver, Colorado 80211 David A. Lane KILLMER, LANE & NEWMAN, LLP 1543 Champa Street, Suite 3400 Denver, Colorado 80202
Pursuant to C.R.C.P. 121, §1-26(7), a printable copy of this EServed document is maintained in the Office of the Attorney General for the State of Colorado

/s/ Maria Ruiz

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