2021 Election, Ben Murrey, Exclusives, Gold Dome

Murrey & Cottrell: Amendment 78 defeat enables slush fund abuse

In Tuesday’s election, Amendment 78 failed to win the 55-percent approval threshold from voters required to amend the state’s Constitution.  Its defeat at the ballot box means executive officials can continue to spend state dollars outside of the legislature’s regular appropriations process with little accountability.

Had it passed, Amendment 78 would have removed the authority of state executive officials to spend “custodial funds” at their own discretion and instead required the general assembly to appropriate such funds after a public hearing.

Its failure on the ballot is a loss to democracy, government transparency, and accountability.

Why go after custodial funds?

Unappropriated custodial funds are granted to the state for a specific purpose and are typically allocated independent of the legislature’s input. This empowers executive branch officials to spend these resources however they please, so long as the expenditure was loosely associated with the intended purpose.

These funds are not subject to spending limitations under the Taxpayer’s Bill of Rights (TABOR), and interest revenues generated by them rarely have any prescribed purpose. This tantalizing honey pot, free of meaningful oversight, invites abuse.

When the office of our Secretary of State, Jena Griswold, received about six million dollars in federal aid for COVID-19 mitigation, she spent nearly half of these funds — $2.8million — on a D.C based PR firm to produce a series of TV ads informing Coloradans of 2020 election procedures. Naturally, she starred in the ads.

While she acted legally, Griswold spent these funds absent any meaningful oversight. The expenditure rightly drew considerable scrutiny from some in the media and further justified the need for Amendment 78’s reforms.

When an ethics complaint against millionaire ex-governor John Hickenlooper was opened up in 2018, Hickenlooper used state custodial funds to pay his legal defense. Tens of thousands in federal dollars, intended to help Colorado’s post 9/11 economy, went to his lawyer at a rate of $525 per hour.

More recently, Attorney general Phil Weiser had funds under control of his office for the purpose of protecting consumers from fraud.  In the name of fighting fraud, $262,000 in no bid contracts were unilaterally allocated to some of Weisser’s campaign contributors, from these custodial resources.

Amendment 78 would have prevented all this. By restoring the power of the purse to the legislature, the amendment aimed to subject spending decisions to a deliberative and democratic process. It would have ended the dispensation of public resources at the sole discretion of executive officials — often unelected bureaucrats.

The argument against Amendment 78

Opponents called the legislative oversight proposed in Amendment 78 “dystopian.” They objected that such a change would disrupt state operations.

Scott Wassermann, a Democrat political operative and president of the progressive Bell Policy Center, critiqued Amendment 78, arguing that it “gives legislators the ability to block…funding for political reasons” and provides “numerous opportunities for the legislature to object to the role [custodial] dollars play in our state.”

Put differently, he objected to the amendment because it would have empowered elected representatives to preempt executive bureaucrats.

He’s right, but that was a feature, not a bug. Democratic safeguards are conducive to good government.

Arguments against Amendment 78 — like the one from Mr. Wasserman — express a hostility towards democracy. They prioritize the efficiency of state operations and discretion of unelected bureaucrats over the interests of the electorate expressed through their political representatives.

But this is not the first time Colorado progressives have shown their contempt for democracy and the will of voters.

They opposed Proposition 117, adopted last November, which requires voter approval for large new government fees. Nothing is more democratic than voters deciding on public policy directly through the ballot. Yet, in a heroic display of Orwellian doublethink, Bell Policy complained that the measure “could be very destructive to the democratic process,” because it would put the decisions “to the ballot instead of allowing our elected leaders to do what they find necessary.”

In their opposition to Proposition117, they preferred that elected legislators make decisions rather than asking voters directly. In the case of Amendment 78, when given the opportunity to give power to elected officials, they favored giving that power to unelected bureaucrats.

A pattern has emerged with Colorado’s political left: when given a choice, they always prefer the least democratic option for dispersing political power. They actually hate democracy.

This is perhaps most palpable in their hostility towards TABOR’s requirement that voters approve tax increases. Their antagonism towards Amendment 78 simply continues in this tradition.

Rehashing an old debate

Their arguments echo those of early 20th century progressives, such as Woodrow Wilson. In his view, democratic checks on executive power presented a detestable imposition on government. He wanted to liberate technocratic elites to direct the affairs of state, unencumbered by politics.

Rather than being beholden to democratic processes, “[the executive branch] administrator does have and should have a will of his own in the choice of means for accomplishing his work,” Wilson argued.

According to this reasoning, unelected bureaucrats in Colorado should have the ability to spend public funds according to their own purported expertise. The elected representatives of the people should be excluded from these spending decisions, just as opponents to Amendment 78 contend.

“[A]dministration lies outside the proper sphere of politics,” Wilson continued. “Administrative questions are not political questions.”

He believed that if insulated from politics, administrators would act solely for the objective good of society independent any self-interest.

Our system of government supposes the exact opposite. It recognizes that power corrupts, and it establishes democratic checks on that power to thwart corruption.

James Madison offered a timeless warning when he argued in favor of such safeguards during the debate over ratification of the United States Constitution. Because we are not governed by angels, he prudently observed, “in framing a government which is to be administered by men over men…a dependence on the people is, no doubt, the primary control on the government.”

The architects of the American Constitution gave the power of the purse to the legislature to provide that control. Amendment 78 would have done the same for Colorado today.

The irony of Amendment 78’s defeat

Unfortunately, it’s not clear that voters connected Amendment 78 to these core democratic principles. Ironically, in this case democracy yielded an anti-democratic outcome to the delight of those who most detest democracy.

For now, Coloradans have chosen to maintain the status quo. Instead of checking the power of the purse with legislative oversight, we remain at the mercy of Griswold and her ilk to rule as angels over us. Given their track record, expect the abuses to continue.

Ben Murrey is fiscal policy director at the Independence Institute, a free market think tank in Denver.  Jordan Cottrell is a fiscal policy research associate at the Institute.

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