COLORADO COURT OF APPEALS

Court Address: 2 East 14th Avenue

Denver, CO 80203

District Court for Denver County
Honorable Herbert L. Stern, III
Case No. 13cv0030421
______________________________________
SCOTT GESSLER,

Plaintiff-Appellant,

v.

DAN GROSSMAN, SALLY H. HOPPER, BILL
PINKHAM, MATT SMITH, and ROSEMARY
MARSHALL, in their official capacities as
members of the Independent Ethics Commission,
and THE INDEPENDENT ETHICS
COMMISSION,

Defendants-Appellees.
_______________________________________
Attorneys for Proposed Amicus Curiae Colorado
Ethics Watch:
Luis Toro, #22093
Margaret Perl, #43106
1630 Welton Street, Suite 415
Denver, CO 80202
Telephone: 303-626-2100
Email: ltoro@coloradoforethics.org
pperl@coloradoforethics.org















COURT USE ONLY
________________________

Case No. 2014CA670


BRIEF OF AMI CUS CURI AE COLORADO ETHICS WATCH
IN SUPPORT OF DEFENDANTS-APPELLEES


i

TABLE OF CONTENTS

I. STATEMENT OF IDENTITY OF AMICUS CURIAE ...................................... 1
II. ARGUMENT ....................................................................................................... 2
A. Colorados Citizens Enacted Ethics Reform and Created the IEC to Enforce
Constitutional and Statutory Ethical Standards ...................................................... 2
B. The IEC Acted Well Within its Article XXIX Jurisdiction ............................. 6
C. There is No History of the IEC Improperly Expanding its Jurisdiction
Beyond the Authority in Article XXIX ................................................................10
III. CONCLUSION .............................................................................................14
CERTIFICATE OF COMPLIANCE .......................................................................15
CERTIFICATE OF SERVICE ................................................................................16



ii

TABLE OF AUTHORITIES
Cases
City of Arlington v. FCC, 133 S. Ct. 1863, 1868 (2013) ........................................... 7
Colorado State Civil Service Emp. Ass'n v. Love, 448 P.2d 624, 630 (1968) ........... 9
Developmental Pathways v. Ritter, 178 P.3d 524, 533 (Colo. 2008) .............. passim
Jet Courier Service, Inc. v. Mulei, 771 P.2d 486, 492 (Colo. 1989) ......................... 8
McCool v. Sears, 186 P.3d 147, 150 (Colo. App. 2008) ........................................... 7
North Colo. Medical Ctr., Inc. v. Committee on Anticompetitive Conduct, 914 P.2d
902, 907 (Colo. 1996) ............................................................................................. 7
Sierra Club v. Billingsley, 166 P.3d 309, 312 (Colo. App. 2007). ............................ 7
Statutes
C.R.S. 24-6-402 ....................................................................................................13
C.R.S. 24-9-105 ..................................................................................................6, 9
C.R.S. 24-18-101 .................................................................................................... 4
C.R.S. 24-18-103(1) ............................................................................................6, 8
C.R.S. 24-18-108 ..................................................................................................13
C.R.S. 24-50-117 ..................................................................................................13
Other Authorities
IEC Position Statement 11-01 (2011) ........................................................................ 2
Regulations
1 C.C.R. 1-101 (2012) ............................................................................................. 9
8 C.C.R. 1510-1 (2011) ........................................................................................... 5
Constitutional Provisions
Colo. Const. art. XXIX, 1 ...................................................................................2, 6
Colo. Const. art. XXIX, 2(6) .................................................................................12
Colo. Const. art. XXIX, 3 ...................................................................................2, 4
Colo. Const. art. XXIX, 4 ....................................................................................... 3
Colo. Const. art. XXIX, 5 ...................................................................................3, 6
Colo. Const. art. XXIX, 5(1) ................................................................................... 8
Colo. Const. art. XXIX, 5(3)(a) .............................................................................. 4
Colo. Const. art. XXIX, 5(3)(b) ............................................................................11
Colo. Const. art. XXIX, 5(3)(c) .............................................................................. 5
Colo. Const. art. XXIX, 6 ............................................................................ 5, 8, 14


1

Colorado Ethics Watch, by its undersigned attorneys, respectfully submits its
brief of amicus curiae:
I. STATEMENT OF IDENTITY OF AMI CUS CURI AE
Colorado Ethics Watch (Ethics Watch) is a state-level project and
registered trade name of Citizens for Responsibility and Ethics in Washington, a
nonprofit corporation. Since the doors of its Denver office opened in 2006, Ethics
Watch has sought to improve ethics and transparency in Colorado government
using legal tools. Among other things, Ethics Watch has filed five complaints with
the Independent Ethics Commission (IEC) since its inception and submitted
comments in both the 2008 and 2011 IEC rulemaking proceedings. Ethics Watch
maintains a webpage, Eye on the IEC, chronicling the IECs actions since its
inception.
1

Ethics Watch filed the complaint against Secretary of State Gessler that is
the subject of this action, and was forced to act as prosecutor at its own expense
against Gesslers publicly-funded defense team during an eleven-hour hearing on
June 6, 2012. Ethics Watchs perspective as the complaining party and its years of
experience watching IEC actions will assist the court in determining the questions
presented in this review of the District Courts order upholding the IECs findings

1
Eye on the IEC, http://www.coloradoforethics.org/co-pages/eye-on-the-iec/ (last
visited October 3, 2014).
2

and penalty. Specifically, this amicus brief focuses on the issue presented
regarding the scope of the IECs jurisdiction.
II. ARGUMENT
Secretary Gessler raises the specter of a rogue agency ruthlessly expanding
its jurisdiction without proper oversight through judicial review. In reality, the case
under review is a garden-variety breach of public trust matter that falls squarely
within the IECs jurisdiction.
A. Colorados Citizens Enacted Ethics Reform and Created the IEC to
Enforce Constitutional and Statutory Ethical Standards

In order to make certain that elected officials avoid conduct that is in
violation of their public trust or that creates a justifiable impression among
members of the public that such trust is being violated, Colorado citizens passed a
comprehensive ethics reform ballot initiative with 62.5% of Colorado voters in
support.
2
Colo. Const. art. XXIX 1. Amendment 41, now Article XXIX of the
Colorado Constitution, had three major components:
The gift ban, which prohibits lobbyists from giving gifts to public officials
or employees and limits most other gifts to public officials to a value of $50
per year, adjusted for inflation. Colo. Const. art. XXIX, 3; see also IEC
Position Statement 11-01 (2011) (adjusting gift limit to $53 for inflation).

2
Colorado Secretary of State, Colorado Cumulative Report, December 13, 2006,
posted at http://www.sos.state.co.us/pubs/electionresults2006G/.
3

The gift ban was the subject of a constitutional challenge that was dismissed
by the Colorado Supreme Court as unripe. Developmental Pathways v.
Ritter, 178 P.3d 524, 533 (Colo. 2008);
The revolving door prohibition, which bans members of the General
Assembly from working as state lobbyists for two years after the expiration
of their terms. Colo. Const. art. XXIX, 4; and
The creation of the IEC as an independent agency empowered to issue
advisory opinions and hear complaints regarding ethics issues arising under
this article and under any other standards of conduct and reporting
requirements as provided by law. Colo. Const. art. XXIX, 5.
This case centers on the third of these pillars of Article XXIX: the scope of the
IECs jurisdiction when hearing complaints.
Based on the plain language of Article XXIX, the IEC has jurisdiction to
consider both advisory opinion requests and complaints that raise ethical issues
under the gift ban and revolving door provisions of Article XXIX, and under other
standards of conduct and reporting requirements found elsewhere in Colorado law.
Although Secretary Gesslers brief dismisses this half of the IECs
jurisdiction as a little-noticed phrase (Opening Br. at 9), the inclusion of pre-
existing standards of conduct known by (and binding upon) state and local officials
was a centerpiece of the newly-created IECs jurisdiction. The Bluebook used by
4

voters to explain Amendment 41 in the 2006 election explicitly referred to the
statutory Code of Ethics in C.R.S. 24-18-101 et seq. and stated that IEC
jurisdiction included violation of the proposal [amendment] or any other standard
of conduct or reporting requirement specified in law. See State of Colorado,
Legislative Council, Colorado General Assembly, Analysis of the 2006 Ballot
Proposals, at 9-10 (2006).
Colorado voters intended the IEC to enforce (and provide advice regarding)
the new gift ban, revolving door provisions, and existing statutory standards of
conduct such as the state Code of Ethics. This interpretation of the IECs
jurisdiction was the foundation of the Developmental Pathways challenge to the
gift ban provisions of Article XXIX, 3. See 178 P.3d at 534 (Plaintiffs sought to
have the gift bans of Amendment 41 rendered unconstitutional, leaving only the
provision creating the Commission, which, in their view, would then enforce
existing ethics laws.).
Enforcement actions at the IEC are initiated when any person files a
complaint asking whether a public officer, member of the general assembly, local
government official, or government employee has failed to comply with this article
or any other standards of conduct or reporting requirements as provided by law
within the preceding twelve months. Colo. Const., art. XXIX, 5(3)(a). The
amendment does not require that a complaining party be certain that a violation has
5

occurred. Rather, any person is entitled to file a complaint that asks the IEC to
determine whether a violation has occurred. The IEC is mandated to conduct an
investigation, hold a public hearing, and render findings on each non-frivolous
complaint pursuant to written rules adopted by the commission. Id. 5(3)(c). The
IEC may fine any covered person who breaches the public trust for private gain
double the amount of the financial equivalent of any benefits obtained by such
actions. Id. 6.
Under the constitutional scheme, a citizen asks whether an ethical standard
of conduct has been violated, and if not frivolous, the request is to be investigated
by the IEC. Nothing in Article XXIX or the IEC Rules handcuffs the IEC by
restricting its constitutionally-mandated investigation to legal theories specifically
cited in a complaint. Such a limitation would be inconsistent with Article XXIXs
command that the IEC investigate a complaint, not leave it to complaining parties
to dictate the course and scope of the inquiry. Indeed, the IECs procedural rules
sensibly leave it to the IEC to determine what ethics standards will be considered
at a hearing: The scope of the hearing shall be determined by the IEC and may be
limited to specific factual, ethical or legal issues. IEC Rule of Procedure 8.A.2., 8
C.C.R. 1510-1 (2011). This rule is well within the IECs constitutional authority
to prescribe written rules to govern the investigation and hearing, Colo. Const. art.
XXIX, 5(3)(c), and Secretary Gessler does not contend otherwise.
6

This was the process followed in this case when Ethics Watch submitted a
copy of its letter to the Denver District Attorney as an attachment to a complaint
asking the IEC to investigate and determine if ethical standards of conduct had
been broken. Additional public documents, provided in a supplement to that
complaint, were also considered in the IECs determination of whether the
complaint was frivolous under Article XXIX. After determining that the
complaint was not frivolous, the IEC spent months conducting an investigation
into the law and the facts applicable to the issues raised in the complaint. The IEC
also considered and decided a series of evidentiary and legal motions filed by
Secretary Gessler in the months leading up to the June 2013 hearing that relied
upon the same statutory standards of conduct as those argued at the final hearing.
B. The IEC Acted Well Within its Article XXIX Jurisdiction

The IECs final decision applied two longstanding statutory ethical
standards of conduct: the prohibition against breaching the public trust for private
gain contained in the Colorado Code of Ethics, C.R.S. 24-18-103(1), and the
statute creating discretionary funds for statewide elected officials, C.R.S. 24-9-
105. Despite Secretary Gesslers claims that these two statutes fall outside the
IECs jurisdiction as outlined in Article XXIX 5, these matters constitute the type
of conduct that is in violation of their public trust contemplated by Colorado
voters in Colo. Const. art. XXIX, 1.
7

The Colorado Supreme Court has made it clear that the IEC is entitled to the
deference normally accorded to administrative agencies when they interpret
statutes or regulations, even in its interpretation of Article XXIX itself. See
Developmental Pathways, 178 P.3d at 535. Agency interpretations of statutes they
administer are entitled to judicial deference if they are based upon a permissible
construction of the statute. North Colo. Medical Ctr., Inc. v. Committee on
Anticompetitive Conduct, 914 P.2d 902, 907 (Colo. 1996). The principle of
deference to administrative agencies fully applies when an agency acts in a judicial
or quasi-judicial capacity. See Sierra Club v. Billingsley, 166 P.3d 309, 312 (Colo.
App. 2007).
Moreover, the principle of deference to administrative agency interpretations
of its own statute applies to an agencys interpretation of the scope of its own
authority. See City of Arlington v. FCC, 133 S. Ct. 1863, 1868 (2013). The
question whether a complaint addresses an ethics issue arising under a standard
of conduct applicable to Article XXIX covered individuals is a quintessential
example of an agency's interpretation of a statute within its expertise that is is
entitled to deference if the statutes plain language is subject to different
reasonable interpretations. McCool v. Sears, 186 P.3d 147, 150 (Colo. App.
2008).
8

Under any standard, the two statutes considered by the IEC fit within the
definition of ethical issues arising any other standards of conduct . . . as provided
by law. Colo. Const. art. XXIX, 5(1). C.R.S. 24-18-103(1) is part of the state
Code of Ethics, which in turn is part of Article 18 of Title 24, C.R.S., entitled
Standards of Conduct. This is the same Code of Ethics referred to in the
Bluebook issued when voters adopted Article XXIX. The Code of Ethics mandates
that a public officer carry out his duties for the benefit of the people of the state,
C.R.S. 24-18-103(1), and provides a standard of conduct very similar to the
private sector requirement that an agent is subject to a duty to his principal to act
solely for the benefit of the principal in all matters connected with his agency. Jet
Courier Service, Inc. v. Mulei, 771 P.2d 486, 492 (Colo. 1989). That this standard
of conduct generally applies to every agent of the state in a wide variety of
circumstances does not make it any less a standard of conduct under the IECs
jurisdiction. It is not a surprise that ethics issues would arise from a breach of
public trust under C.R.S. 24-18-103(1).
Indeed, Article XXIX itself refers to enforcement matters alleging a breach
of public trust as within IEC jurisdiction when it directs a specific penalty of
double the amount at issue for an IEC finding of any breach of public trust for
private gain. Colo. Const. art. XXIX, 6. Ethics Watchs complaint alleged, and
the IEC found based on the evidence at the hearing, that Gessler breached the
9

public trust for private gain by converting public funds to personal and political
use. If actions alleging a breach of the public trust were outside the scope of the
IECs jurisdiction, the penalty provision of Article XXIX, 6 would be rendered
superfluous. See Colorado State Civil Service Emp. Ass'n v. Love, 448 P.2d 624,
630 (1968) (Each clause and sentence of either a constitution or statute must be
presumed to have purpose and use, which neither the courts nor the legislature may
ignore.).
The proper use of public funds is also the type of ethical issue arising
under statutory standards of conduct contemplated by Colorado voters and
within the plain language of Article XXIX. For almost 30 years, C.R.S. 24-9-105
has directed statewide elected officials use the allocated discretionary funds in
pursuance of official business as each elected official sees fit. Contrary to the
Secretarys argument, his discretion is not limitless: he could not, for example, use
his discretionary fund to contribute to political candidates or to pay himself a
personal bonus (as the evidence at the hearing proved he in fact did). He is directed
to use the money for official business; diverting the public funds entrusted to him
to political or personal use is a paradigm example of unethical conduct. The statute
provides ethical standards comfortably within the IECs jurisdiction.
Moreover, for additional specificity, the IEC correctly looked to the State
Fiscal Rules, which by their terms and the testimony of the State Controller apply
10

to the Secretary of State. See 1 C.C.R. 1-101 (2012). Doubtless, in a different
circumstance, a public official who complied with the Fiscal Rules would cry foul
if the IEC nevertheless found that he or she had used state funds improperly. The
question whether a violation of the State Fiscal Rules, without more, would be
subject to IEC jurisdiction is not presented by this case. Rather, the State Fiscal
Rules served here as a check on, and guidepost for, the IEC in fulfilling its role to
flesh out how the ethical standards of conduct existing in Colorado law applied to
Secretary Gesslers misuse of public funds entrusted to his care for personal and
partisan purposes.
It was a logical and permissible construction for the IEC to determine that a
statutory provision in the Code of Ethics (a preexisting set of standards of conduct
referred to in the Bluebook), or long-standing statutory provisions setting explicit
standards for the Secretary to follow when using public funds, were within the
agencys jurisdiction over ethical issues arising under standards of conduct
applicable to covered individuals. The agencys construction is plainly correct, or
at least, entitled to judicial deference. Developmental Pathways, 178 P.3d at 535.
C. There is No History of the IEC Improperly Expanding its Jurisdiction
Beyond the Authority in Article XXIX

As the Secretarys brief attempts to paint a picture of an out-of-control
power-grabbing agency, it boldly asserts that [t]he IEC has, literally, never found
a statute it did not find to be within its purview. (Opening Br. at 9). The actions of
11

the IEC over its seven-year history during which at all times it has been
represented by the Department of Law tell a different story.
As discussed above, enforcement matters proceed in two stages under
Article XXIX: first a discussion and determination by the IEC as to whether or not
the complaint is frivolous which is conducted in closed executive session, and
then the public hearings, investigation, deliberation and findings in open session
for complaints which pass that bar. Article XXIX mandates that complaints found
to be frivolous must be maintained confidential by the IEC. See Colo. Const. art.
XXIX, 5(3)(b). While the specific allegations and names of elected officials who
were the subject of those complaints deemed frivolous are not released, the IEC act
of finding a complaint frivolous is a matter of public record. The IEC chronicles on
its website all complaints it has received since 2008. Contrary to the Secretarys
assertions, a number of complaints have been dismissed on the grounds that the
IEC lacked jurisdiction over the matter alleged: 14 such complaints in 2014 alone.
3

Nor is there a historical record of abusive assertions of IEC jurisdiction in
the second category of complaints which are not found frivolous. Because the
IECs procedural rules place enormous burdens on a complaining party in an ethics
matter, few ethics complaints have survived to the hearing stage, much less a
decision and order for sanctions. In fact, this case represents the first decision of

3
Independent Ethics Commission, Complaints, available at
https://www.colorado.gov/pacific/iec/complaints (last accessed Oct. 23, 2014).
12

the IEC to impose penalties upon an elected official for ethics violations since the
IEC began operations in 2008.
In contrast to the Secretarys assertions, the IEC has repeatedly dismissed
complaints for lack of jurisdiction. For example, the IEC dismissed Complaint 09-
04 against members of the Steamboat Springs School Board on the grounds that
the IEC lacks jurisdiction over unpaid members of boards and commissions and
employees of school boards. See April 8, 2009 letter in Complaint 09-04
(Attachment 1 hereto). The IEC reached this conclusion even though Colo. Const.
art. XXIX, 2(6) could be read to support the exercise of jurisdiction over school
board members by virtue of their status as elected officials. The constitutional
provision is ambiguous; the IECs resolution of this ambiguity through its
determination that it does not have jurisdiction over unpaid, elected school board
officials is within the scope of its delegated authority as administrator and enforcer
of Article XXIX. See Developmental Pathways, 178 P.3d at 535. The agency made
no attempt to stretch the limits of its constitutional jurisdiction.
Another example of the IEC recognizing limits on its jurisdiction is the Final
Action in Complaint No. 09-08. After completing the investigation stage and
holding a full hearing in March 2010, the IEC issued factual findings and an
overall decision that there was no violation of Article XXIX or other applicable
standards of conduct. See Summary of Final Action in Complaint No. 09-08 (Fry
13

v. Burns) (April 19, 2010) (Attachment 2 hereto). Most relevant here, the IEC
specifically found that it did not have jurisdiction over alleged violations of
Colorados Open Meetings Law, C.R.S. 24-6-402. Attachment 2 at 7. Thus, the
Secretarys accusation that the IEC has never refused to claim jurisdiction over any
statutory basis for allegations is simply false.
This is not the first time the IEC has exercised jurisdiction over a complaint
presenting ethics questions arising out of standards of conduct other than the gift
ban and revolving door prohibition. Secretary Gesslers predecessor filed a
complaint in his official capacity asking whether an employee of the department
breached the public trust for private gain in violation of C.R.S. 24-18-108(2)(d)
and 24-50-117. See Final Order in Complaint No. 10-06 (Buescher v. Whitfield)
(Jan. 11, 2011) (Attachment 3 hereto). That matter was resolved with a stipulated
agreement by the parties including an admission by the employee that his conduct
violated these statutory standards of conduct.
Contrary to the Secretarys allegations, the IEC has a history of carefully
considering the scope of its jurisdiction under Article XXIX. The handling of this
case continues that track record and did not exceed the IECs constitutional
jurisdiction.


14

III. CONCLUSION
Considering the onerous burdens the IECs rules place on complaining
parties, it took a case this egregious to produce a decision actually fining a state
official for unethical conduct. Secretary Gesslers defiant use of state money to
fund his personal trip to his political partys national convention and a conference
of his partys lawyers, and his draining the year-end balance of his public funds
account to supplement his salary, is the type of breach of fiduciary duty and public
trust Colorado voters meant to stop through the passage of Amendment 41. The
evidence at the hearing established that Secretary Gessler breached the public trust
for private gain the sine qua non for the imposition of a penalty under Colo.
Const. art. XXIX, 6. The standards of conduct enforced in this matter were well
within the IECs jurisdiction. The Court should affirm the District Courts order
upholding the IECs findings and penalty.
DATED: October 27, 2014.


[Original Signature On File at
Colorado Ethics Watch]

/s/ Margaret Perl
Luis Toro, #22093
Margaret Perl, #43106

ATTORNEYS FOR AMICUS CURIAE
COLORADO ETHICS WATCH

15

CERTIFICATE OF COMPLIANCE
I hereby certify that this brief complies with all requirements of C.A.R. 28
and C.A.R. 32, including all formatting requirements set forth in these rules.
Specifically, the undersigned certifies that:
The brief complies with C.A.R. 28(g). It contains 3,214 words in those
portions subject to the Rule.

By:__/s Margaret Perl_______________
Luis Toro, #22093
Margaret Perl, #43106

Attorneys for Amicus Curiae
COLORADO ETHICS WATCH

16

CERTIFICATE OF SERVICE

I hereby certify that on October 27, 2014, I served a true and correct copy of
the foregoing BRIEF OF AMICUS CURIAE IN SUPPORT OF DEFENDANTS-
APPELLEES via ICCES to the following:

Michael Francisco, Assistant Solicitor General
Kathryn A. Starnella, Assistant Attorney General
Office of the Attorney General, State of Colorado
1300 Broadway, 10th Floor
Denver, CO 80203
Counsel for Plaintiff-Appellant

Lisa Brenner Freimann, First Assistant Attorney General
Russell B. Klein, First Assistant Attorney General
Joel W. Kiesey, Assistant Attorney General
Office of the Attorney General, State of Colorado
1300 Broadway, 8th Floor
Denver, Colorado 80203
Counsel for Defendants-Appellees

[Original Signature On File at
Colorado Ethics Watch]

/s/ Luis Toro