Record-breaking outside money is pouring fuel on the fire in Denver’s Democratic fights

“I am appalled and disgusted by the amount of dark money that is being thrown into this state senate primary to replace me,” said Sen. Irene Aguilar.

The view from the Saint Francis Apartments on Washington Street in Capitol Hill, May 1, 2018. (Kevin J. Beaty/Denverite)

The view from the Saint Francis Apartments on Washington Street in Capitol Hill, May 1, 2018. (Kevin J. Beaty/Denverite)

(Kevin J. Beaty/Denverite)

staff photo

If money’s any indication, then the Democratic battles to represent Denver in the statehouse are some of the most interesting races in the state.

Together, the Democratic candidates in Senate 32 have raised more money than the competitors in any other Colorado statehouse primary, according to Denverite’s analysis.

The race also has attracted hundreds of thousands of dollars in independent spending from outside interests, leading two of the candidates to raise questions about the sources of rival Zach Neumann’s financial support.

Meanwhile, the amount of independent expenditures appears to be skyrocketing statewide, and at least one prominent Democrat is calling for reform.

Let’s start with the big spenders.

In Senate 32, candidate Neumann has collected more money than nearly any other primary candidate for the legislature. Besides collecting at least $130,000 in direct donations, Neumann also has benefited from $220,000 or more in independent spending from the insurance, education and real-estate interests, according to Denverite’s review of financial records.

That included:

  • A political arm of COPIC, the insurance company, reported spending more than $100,000 to support Neumann with mailers and other material. Another committee associated with the group reportedly spent $45,000.
  • An arm of the National Association of Realtors reported spending about $39,000.
  • The education group Raising Colorado reported spending $39,000. (Raising Colorado is largely supported by Education Reform Now, which is itself connected to Democrats for Education Reform.)

And with primary day approaching, the campaign has gone negative, including accusations that “dark money” has infiltrated Denver.

“I am saddened by the for-profit interests that are attempting to buy this race,” said rival candidate Robert Rodriguez said in a statement.

Rodriguez is raising some serious money as well, totaling about $139,000. But his support from outside groups is far lower, with roughly $20,000 from the Colorado Working Families Party’s independent expenditure committee, per finance reports.

“This race has always been about people and we are seeing the super-PAC-type interests coming in and influencing the outcome of our chosen leaders.”

Rodriguez’s campaign claimed that Neumann has benefitted from more than $350,000 in independent expenditures, citing state records. Denverite’s estimate is lower because we chose to eliminate certain duplicate records. We have asked for clarification from COPIC and will update if we find the true number is different.

Neumann is a designer of CareerWise Colorado, a nonprofit led by Noel Ginsburg, the onetime gubernatorial candidate. He also co-founded an agricultural technology company, and he has been a consultant for government and businesses.

Rodriguez is director of outpatient services at a community corrections program, while candidate Hazel Gibson is a newcomer to campaign politics with a background in audiology. Gibson trails significantly in fundraising, having collected about $30,000, with no independent support.

Spending is up across the state.

Campaign finance rules put strict limits on how much money individuals and organizations can give to candidates. But independent expenditure committees can spend more freely to support or oppose campaigns. The catch is that they’re not supposed to coordinate.

Across Colorado, independent spending committees appear to be spending significantly more money this cycle.

The reported expenditures are more than six times higher for May and June this year compared to the same periods in 2016 and 2014, according to state records. And the 2010 primary doesn’t even compare.

Ian Silverii, executive director of ProgressNow, thinks the surge of spending could be a result of the state’s new open primary system. With a larger universe of voters now participating in each race, more centrist candidates may have a greater opportunity — and business interests want to support them, Silverii said.

“So, they could go in there and spend a ton of money getting less extreme, less liberal, less conservative candidates in a perceived safe split,” he said.

Like other political operatives, he said that this year’s independent spending totals are unheard of — at least for primaries.

What do they want?

It’s unclear whether there’s a specific issue that caused COPIC has to support Neumann in S32.

“Besides building awareness around key health care issues, COPIC engages in political races by interviewing candidates and allocating contributions from its political action committees to both Republicans and Democrats,” said Beverly Razon, COPIC’s vice president of public affairs, in a written statement to Denverite.

COPIC also is spending smaller amounts supporting a Republican, Colin Larson, in House 22; Democrat Jim Riesberg in House 50; Democrat Alex Valdez in House 5; and Democrat Kerry Tipper in House 28.

The group met with some of this year’s candidates, including Neumann. “Very early into Zach’s campaign, he thoughtfully communicated his positions on issues, which aligned with our goals of managing health care costs, improving patient safety, and protecting the practice of good medicine,” Razon wrote.

COPIC has lobbied on a number of specific issues at the legislature in the last couple years. In 2017, it funded successful opposition to a Democratic bill that would have eliminated the cap on certain damages that can be paid out in lawsuits over the wrongful death of a child, according to lobbyists’ reports.

That failed proposal could have resulted in doctors and insurers paying more in malpractice cases. And Neumann’s position seems to align with the health-care industry’s, according to rival Gibson.

At a recent forum, Neumann said that the caps on insurance company payouts should be left at their current levels, especially because they can be raised by judges, according to Gibson. The moderator, Rep. Chris Hansen, had a similar recollection. (Gibson wants to raise the caps, she said, while Rodriguez was more “equivocal,” per Hansen.)

“The fight is between the trial lawyers and the health care industry, which is the doctors and the insurance company,” Silverii said.

Neumann also has suggested that Colorado could create a “state-led Medicaid buy-in option,” also known as Medicaid for All.

“What I hear most (while knocking) on doors, what people in the district are looking for, is affordability and accessibility,” he told Denverite earlier.

The accusations are getting serious.

Senate 32 has about 93,000 active voters, including about 33,000 unaffiliated voters. It’s considered to be a safe Democratic seat, so the winner of this primary could be well-positioned to push a more liberal agenda.

With primary day approaching, Rodriguez’s campaign released blistering statements from some of the area’s current representatives.

“I am appalled and disgusted by the amount of dark money that is being thrown into this state senate primary to replace me. Nobody I know of can recall anything like this in a legislative primary before. It’s crazy,” read a statement from Sen. Irene Aguilar, who currently holds the seat but can’t run again due to term limits.

“It sends new signals of corporate interest in who gets elected to the legislature at a very different level than we’ve seen before,” said Joan FitzGerald, the former senate president, who also has endorsed Rodriguez. She said in an interview that she worried that it could signal Neumann’s alignment with corporate interests.

Neumann initially agreed to an interview about the expenditures and his campaign finances, then canceled it. Several days later, he agreed to and then canceled another interview.

We told Neumann we were curious about why the independent committees were supporting him, and we said we wanted more details on his policies as they relate to insurance and real estate.

He released the following statement: “As a first-time candidate my focus has been entirely on communicating my vision for Colorado with any and every voter that will listen. We have been knocking on doors and making phone calls telling voters about our platform of ensuring everyone has healthcare, everyone can get a good paying job, and everyone can live in a safe and affordable neighborhood.”

Candidate Gibson said she was troubled by the spending.

“It’s Democrats fighting Democrats. We’re supposed to be standing on the same side,” she said. “Overall, we should pretty much align with the Democratic party. … It’s unheard of quite frankly, and it doesn’t make a lot of sense, unless there’s something to be gained.”

This isn’t COPIC’s first rodeo, but it’s a big one.

COPIC appears to be spending more heavily this cycle, but it has been a consistent presence in Colorado politics.

For example, it spent about $32,000 or more to support Rep. Leslie Herod in her 2016 run. Herod said that COPIC has never asked for “undue influence,” only that she maintain the same open relationship that she does with her constituents.

“I have not felt like they have strong-armed. I don’t think they tend to act like the gorillas, coming in and doing any of that,” she said.

But she described the group’s spending on Neumann as eyebrow-raising. “It’s much higher than I have seen before,” she added.

The increase in spending is “a matter of the way our campaign financing system works,” she said.

“… When we have these very low (campaign) contribution limits, when we have candidates of different means running, we’re creating an atmosphere where outside money is more influential than the individual fundraising efforts of these campaign teams. I think it’s become so lopsided that we need to reform the entire system.”

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