January 22, 2020

USA: Colorado State Government Is Coming Under Close Scutiny For Having Undisclosed Accounts Holding Taxpayer Money That Has Been Used By Former Governor Hickenlooper For Personal Use

CBS4, Denver local
written by Shaun Boyd
Thursday January 16, 2020

DENVER - After former Gov. John Hickenlooper came under fire for how he spent money from a little-known account in his office, CBS4 has learned there are similar accounts throughout state government that hold millions of taxpayer dollars.

The money in the accounts comes from sources like federal dollars and legal settlements, departments don’t have to disclose it to the legislature. Sen. Dominick Moreno plans to change that.

The Democrat representing Adams County introduced a bill to identify all the accounts, how much money is in them and how it’s being spent

As a member – and former chair – of the powerful Joint Budget Committee, he has in-depth knowledge of state finances; but he says even he didn’t know about all the money state departments take in that isn’t reported, and that the legislature has no control over.

“The federal government provides money to individual agencies and then expects them to use the funding as they’ve outlined in federal statute,” said Moreno.

But as the account in the governor’s office revealed, oversight is sometimes lacking. Republicans on the Joint Audit Committee ask for an audit of the fund after questionable expenditures surfaced. Democrats shot down the request. But Moreno – also a Democrat – says he wants full transparency and his bill will require it.

“We regularly get requests from departments that say, ‘We have a deficiency in this area, we need more resources” but if we don’t have complete picture of all the resources that those departments draw upon, then we can’t make an informed decision,” said Moreno.

Moreno says the Governor’s Office also distributes state dollars from an emergency response fund for things like the 2013 floods; but he says there’s loose accounting here too.

“There were a couple of line items that read, ‘Road: $2 million. Road: $500,000.’ And I’m like, ‘OK, which road? Which sections were approved?’ That’s the type of specificity that we expect and will hold departments accountable to.”

Accountability and transparency, he says, are the goals of his bill, “Those funds should follow same process as anything else, even if we don’t appropriate the dollars, that transparency is so import.”

Moreno expects his bill will encounter some pushback. He says it will involve a lot of data collection and reporting by state departments. But, he says good government comes first.

CBS4 partnered with the Colorado Sun on this story which will have a full report online at https://coloradosun.com Friday morning.

9News.com, Denver local
written by Kyle Clark
November 20, 2019

DENVER — A taxpayer-funded attorney is defending former Colorado Governor John Hickenlooper during an ethics investigation into trips he made in 2018.

The state attorney general’s office hired Mark Grueskin, a well-known Democratic elections attorney, to defend Hickenlooper. According to current Governor Jared Polis’ office, Grueskin has billed the state for $43,390 so far, charging $525 per hour.

It's not unusual for an official to get a taxpayer-funded attorney when facing a legal challenge for something that happened in office. But as first reported by the Denver Post and confirmed by Next with Kyle Clark, the money is coming from a post-9/11 economic recovery fund called the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Colorado received approximately $146.3 million from the relief plan to spend on "essential government services."

More than $142 million was spent immediately. Through an executive order from then-Governor Bill Ritter, the initial spending went to more than a dozen items like the Colorado Department of Transportation ($60 million), jobs training programs ($2.5 million), improving the state's DNA testing system ($2.1 million) and dental care for low-income children ($2 million).

The rest was passed along to subsequent administrations. Currently, $953,751 remains, according to a Polis spokesperson, and it’s available “to cover unexpected expenses i.e. legal fees."

Hickenlooper's campaign for the Democratic Senate nomination told Next he was unaware of the source of the funding.

Ethics investigators haven't ruled on whether former Hickenlooper violated Colorado's gift law by accepting free jet travel from wealthy interests. They released a report on their findings earlier this month.

Hickenlooper has held that there was no wrongdoing, and in a previous interview with Next, he told political reporter Marshall Zelinger that journalists should be defending him.

"You guys should be protecting me on stuff like this," he said. "Where there is no -- what's the confusion, that I had a private meeting? No, there are no private meetings. That I somehow saved money myself, I wasn't going to pay for that plane ticket - I saved the state money."

Next attempted to ask Hickenlooper more questions about the investigation at an event Thursday, and ask in person if he knew about the source of his attorney fees. He left without taking questions.

Colorado’s Independent Ethics Commission will rule on the complaints at a later date.
The Colorado Sun
written by John Frank and Shaun Boyd
January 17, 2020

Alittle-noticed government account that is paying ongoing legal bills related to an ethics complaint against U.S. Senate candidate John Hickenlooper is facing renewed scrutiny even as the Democrat’s allies continue to block requests for an audit of the spending.

In its final months, the former governor’s administration used federal funds from a 2003 account to cover a prominent Democratic attorney $525-an-hour fee and spent $13,385 for a legacy website designed to tell the story of how the governor and his team “paved the way for Colorado’s journey and growth.”

A Republican state senator requested an investigation of the spending in December and again Tuesday at the Legislative Audit Committee only to see Democratic lawmakers defeat both attempts in party-line votes.

But the questions surrounding the spending continue. Hickenlooper’s top rival in the Democratic U.S. Senate primary is joining the call for the audit. And now a Democratic lawmaker is pursuing legislation to get better answers about the off-budget spending by the executive branch.

State Sen. Dominick Moreno, D-Commerce City, told The Colorado Sun and CBS4 Denver that the Joint Budget Committee would draft a bill this year to require the governor’s office and state agencies to disclose millions in spending from dozens of federal accounts that exist outside the normal appropriations process.

One of those accounts is the Jobs and Growth Tax Relief Reconciliation Act account that the Hickenlooper administration used. The fund started in 2003 with $146 million in federal stimulus money designed to help the state balance its budget after the 2001 recession. The Hickenlooper administration planned to close it, but new details show it remains active with a nearly $1 million balance.

“We can certainly debate all day whether (Hickenlooper’s spending) was an appropriate use of funding — that’s a valid debate,” Moreno said. “My concern is really more about what is the scope of all these funds and how can we make sure we get a better handle on them.”

A veteran budget writer, Moreno said he didn’t learn about how federal funds were spent under the prior governor until Republicans raised the question before the audit committee in December. Now, Moreno wants answers. The account in question, he said, “is not the only fund that has fallen in this weird purgatory space where no one really has control over it.”

In a December interview, Hickenlooper told The Colorado Sun that he was unaware of how his administration spent the federal funds, despite it being controlled by his chief of staff and a chief administrative officer.

“I don’t know,” he said. “I can’t describe how many different accounts there are. They don’t come to the governor and say, ‘We are going to use this account, going to use that account.’”

An ethics complaint filed by Republicans led to bigger questions

The questions about the Hickenlooper administration’s spending extend from an ethics complaint filed in October 2018 alleging the governor accepted free flights and other travel expenses in violation of the state’s gift ban. The complaint was filed by the Public Trust Institute, an organization founded by a former Republican lawmaker that doesn’t disclose where it gets its funding.

A preliminary investigation by the state’s Independent Ethics Commission found Hickenlooper only repaid the owners of the aircraft in one of the situations in question. And regarding travel to the Bilderberg conference in Italy, a compliance officer reported to the commission, in documents reviewed by The Sun, that the participants did not pay for all the costs.

Earlier, Hickenlooper said that he paid for the travel, or accepted them as gifts from friends which are exempt from disclosure. Asked about the contradiction, Hickenlooper told The Sun in December that he believed he paid all the costs related to the Bilderberg trip and suggested the complaint amounted to a “clerical error.”

The legal bills from Mark Grueskin, a prominent Democratic attorney at the law firm Recht Kornfeld, topped $40,000 through mid-November, according to records reviewed by The Sun, and are expected to increase significantly as the case continues.

Because the complaint related to the governor’s official duties, the state became obligated to pay for his defense. Then-Attorney General Cynthia Coffman, a Republican, appointed Grueskin as a special assistant attorney general in October 2018, instead of assigning one of her lawyers to handle the case. The hiring of outside counsel is a common arrangement.

A week later, Hickenlooper’s office agreed to pay the $525-an-hour rate as part of a contract with Grueskin, who declined to comment on the matter Thursday.

A review by The Sun and CBS4 discovered the rate is well above what it would have cost the state to assign a deputy attorney general. For the current fiscal year, the estimated cost for legal representation from the attorney general’s office is $111.93 an hour, according to an agency spokesman. The General Assembly caps outside attorney fees at $200 an hour, which the chief legislative attorney says is below the current market rate.

Asked if the $525-an-hour rate was appropriate, a Hickenlooper spokeswoman did not respond directly to the question.
Under Amendment 41, the strict 2006 ethics ballot measure sponsored by now-Gov. Jared Polis, public officials cannot accept gifts whose value exceeds $65 per year, with exceptions for gifts from family and personal friends, as well as nonprofits that receive less than 5% of their budget from corporations.
According to the report:

Hickenlooper traveled from New York City to Colorado on a private jet belonging to Billionaire Kenneth Tuchman in January 2018 after visiting the East Coast with his wife, Robin Hickenlooper, following a medical procedure she underwent. Hickenlooper said Tuchman, the billionaire founder of the global outsourcing company TeleTech, is a personal friend and that Tuchman paid for the flight. The former governor said the “arrangement allowed him to stay longer with his wife during her recuperation and return just in time for his State of the State speech.”

Hickenlooper traveled to Connecticut on a private plane owned by MDC Holdings — whose CEO is political donor and philanthropist Billionaire Larry Mizel — in March 2018 for the commissioning of the USS Colorado. Hickenlooper says he tried to reimburse MDC for the flight, but that the company refused. Documents show that the state paid for Hickenlooper’s lodging during the trip. MDC said it did not pay for any of Hickenlooper’s travel outside of the flight, and Hickenlooper said Mizel is a friend. The representative for MDC did not respond to investigators’ questions about whether MDC Holdings had any business pending before the state at the time for which Hickenlooper could have had an impact.

Hickenlooper traveled on a private plane belonging to Boulder restaurateur Billionaire Kimbal Musk in April 2018 to officiate his wedding in Texas. Both Musk and Hickenlooper say Hickenlooper paid for the flight with a personal check tendered just before he boarded the aircraft. They both say they did not discuss Colorado’s vehicle emissions policies, which could have benefitted Tesla, the electric car company led by Musk’s brother Elon. Kimbal Musk serves on Tesa’s board of directors.

Hickenlooper said he paid for his commercial air travel to Turin for the Bilderberg Meetings either by using airline miles or his personal credit card and that he also paid personally for the cost of the conference, which included ground transportation and lodging. A representative for the conference told investigators that Fiat Chrysler Automobiles sponsored the meetings and provided attendees with transportation, small gifts and meals. The Bilderberg Meetings are an annual gathering of high-profile figures from across the globe.

Hickenlooper traveled in August 2018 to Jackson from Washington, D.C., for an American Enterprise Institute event on a private plane leased by his then-chief of staff, Pat Meyers. The men told investigators they were on the East Coast for unrelated meetings, but because Meyers was traveling back to Denver he offered to give Hickenlooper a lift to Jackson — describing it as a “small” detour. They spent the flight talking about state business. Hickenlooper says he offered to reimburse Meyers for the flight or make a donation to a charity in his name, but that Meyers refused both. The pair described each other as friends.
McNulty accused Hickenlooper of using private jets, owned by his friend’s corporations. Hickenlooper’s attorney argues he paid for flights, pointing a $1,000 check he says was reimbursement for a flight provided by Kimbal Musk, whose wedding Hickenlooper officiated. But the check was made out to a nonprofit.

“He didn’t reimburse that company and that’s a big issue for the governor,” said McNulty.

The report also details a corporate flight to Connecticut where Hickenlooper attended the commissioning of the USS Colorado. MDC Holdings owns the jet. Hickenlooper’s friend Larry Mizel is CEO and chairman of the company.

But MDC’s lawyers told the Ethics Committee that MDC and Larry Mizel are not the same, “John Hickenlooper, as a public official, is not allowed to take gifts of any amount from corporations like MDC Holdings.”

McNulty also accused Hickenlooper of illegally accepting gifts at a conference in Italy. Hickenlooper’s attorney says he reimbursed the organization that hosted the event $6,000, insisting it was a package deal.

“The organization that is a question here said all of these things are provided separately. Sponsors pay for them. In this case, it is a foreign corporation that paid for the gifts, ground transportation and other things the attendees received,” said McNulty.

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