Republicans: Funds given to Beauprez are perfectly legal

Two Denver businessmen used a legal loophole in the state campaign finance law to funnel $25,000 in contributions through limited-liability companies to Republican GOP gubernatorial candidate Bob Beauprez.

The contributions triggered a complaint by a liberal group, Colorado Citizens for Ethics in Government, to Secretary of State Gigi Dennis.

Her agency has advised the citizens group that, under state law, it will refer the complaint to an administrative law judge for possible hearings.

Colorado Common Cause Executive Director Jenny Flanagan said, while technically legal, the practice of one person using "using multiple LLCs to max out contributions . . . flies in the face of the law."

"We think voters repeatedly have said they want to get big money to candidates out of this process," added Flanagan.

His group wrote the successful 2002 state campaign finance reform initiative to restrict individuals and LLCs to contributing $1,000 each per election cycle.
But Mike Ciletti, a principal with the Republican political consulting firm Phase Line Strategies, scoffed at Common Cause's complaint.

"They wrote the rules and now they're complaining about people following their rules," said Ciletti, who acknowledged advising Republicans to contribute via LLCs among other legitimate donation channels.

"The only thing that it flies in the face of is they need to get better bill drafters."

Beauprez spokesman John Marshall said their campaign has "abided by the letter of law at every turn."

One of the two contributors, Eric Bush, president of Bush Development Inc., a Denver real estate development firm, said he gave $9,000 to Beauprez on the same day through his nine LLCs at Ciletti's suggestion.

"I was told about this loophole from Phase Line. Call it a loophole - call it whatever you want - it's a legal channel," Bush said.

Likewise, Mark D. Campbell, an Englewood real estate investment firm president who manages 16 LLCs that contributed a total of $16,000 - $1,000 per firm - to Beauprez, said he's been assured that the donations are legal.

Bush said, "Phase Line double-checked with the secretary of state.

"I made sure they did, because the last thing I want to do is get in the middle of something illegal," he said.

"They said, yes, it is acceptable - out of every single entity, or LLC, you can turn around and write up (a contribution), even if it's the same owner of all of them," he said.

Secretary of state spokesperson Dana Williams confirmed that each LLC can contribute $1,000.

"It is true that, under Colorado campaign finance laws, LLCs can contribute to a candidate committees, and that's the information we would have provided," she said.

Bush said he created the LLCs for his business years ago - "before the congressman (Beauprez) was even running for Congress."

"So it's hard to say that I'm forming LLCs to just turn around and give a political donation."

But Chantell Taylor, director of Colorado Citizens for Ethics in Government, called the LLC loophole "a glaring end-run around the individual contribution limits."

Ciletti and other Republicans questioned why watchdog groups aren't concerned about loopholes that allow liberal Colorado tycoons like Tim Gill and Pat Stryker to contribute unlimited amounts of money to fund independent attack ads against Republican candidates.

"It's far more egregious on the 527 groups' side - a thousand dollars versus a million dollars," Ciletti said, referring to the independent groups known as "527s" because of their reference in the IRS tax code.

"The checks on the LLC side don't compare to what's being done by the 527 groups," he said.