Nine years after a disputed vote by the Glendale City Council, the state ethics commission issued a split decision on a 2016 case filed against Mayor Mike Dunafon, concluding the latter violated some ethical provisions but also dismissing part of another complaint. 

The commission decided against levying any fines. 

The commission’s majority said Dunafon violated the state’s ethics law when he voted on a matter involving his wife’s business because he had a personal or private interest. The commission also ruled Dunafon violated disclosure provisions four times, tied to 2015 votes on a development plan for his wife’s property and two consent agenda votes taken in 2015 and 2016, tied to another business owned by his wife, Shotgun Willie’s.

However, the commission dismissed part of another complaint that claimed Dunafon failed to disclose an interest in a business owned by his wife’s daughter. They also dismissed a claim that he tried to influence other members of the city council.

The ruling was not unanimous. One commissioner issued a dissenting opinion, stating that he did not believe Dunafon had a personal or private interest in those businesses. As a result, the votes were not improper, the commissioner said. 

While the commission found Dunafon had committed some of the violations alleged in the complaints, they did not assess any fines. They noted that, if the votes he participated in had been rejected, the applications would have gone back to the city’s planning commission. They also said the complainants never presented any evidence of a financial benefit.

The commission held a day-long evidentiary hearing in June and deliberated on the complaints in July. It issued its ruling last week.

The saga of the commission’s longest-running complaints includes a cast of characters and places, including a strip club and the owners of a Colorado Boulevard rug store who had accused the city of seeking to tear down their store.

Since 2010, the city has been working on redeveloping a 10-acre site on Colorado Boulevard between East Virginia Avenue and Cherry Creek South Drive. That site, now known as Glendale 180, is a $150 million planned entertainment district.

The project has been slowed by lawsuits, first from the owners of an existing hotel on the site and then by the owners of Authentic Persian and Oriental Rugs on Colorado Boulevard, who believed the city planned to use eminent domain to seize their land.

How it started

A Glendale City Council meeting in February 2015 prompted the ethics complaints, which were filed by the Colorado Ethics Watch on behalf of MAK, the rug store’s owners.

The city council was set to vote on a site development plan and special use permit for the Smoking Gun, a marijuana dispensary owned by Debbie Matthews, who also owns the strip club Shotgun Willie’s. Matthews was, at the time, Dunafon’s long-time partner. They married five months after the first vote.

Glendale City Council had the authority to approve the application, add additional conditions, or deny the application.

Dunafon initially recused himself from the vote, which failed 3-2, but the audio transcript was unclear on the “ayes” and “nays,” with Dunafon and Mayor Pro tem Paula Bovo not voting. Moments later, according to the IEC ruling, Dunafon announced he would break the tie, although it is unclear why he thought it was a tie vote. Dunafon then announced the vote was 4-3 to approve the application.

A month later, the council voted again on the application, approving it, 5-1, due to confusion over the February votes.

MAK, which owns the Persian rug store on Colorado Boulevard, wanted — according to a 2022 Denver Business Journal report — to develop the property to include a residential component, which the city ultimately rejected. The city offered to buy the land, which the owners dismissed because the city wouldn’t agree to the price, set at $17.5 million.

A federal lawsuit filed by the owners was settled in their favor, with a pledge from Glendale that the city would not seek condemnation of the land.

The ethics complaints

In 2016, MAK submitted the first of several nearly identical complaints to the state ethics commission. The second was tied to Dunafon’s presumed vote on a consent agenda that included Shotgun Willie’s license approval. Dunafon did not vote on those consent agenda items but also did not disclose any personal or private interest in the business, which the commission ruled was mandatory.

Dunafon told Colorado Politics last year he did not have a financial interest in those businesses.

In the commission’s ruling, the majority wrote: “Dunafon was Ms. Matthews’s longtime romantic partner, and Ms. Matthews was a 73 percent owner of the Smoking Gun. Mr. Dunafon and Ms. Matthews married five months after the February 2015 meeting and filed their taxes jointly in 2015. They had common ownership of properties dating back to 1998. Whether or not Mr. Dunafon and Ms. Matthews shared finances, Mr. Dunafon was personally invested in Ms. Matthews’s businesses based on the nature of their relationship.”

But the majority opinion rejected claims that Dunafon was interested in the business owned by his wife’s daughter and dismissed that part of the complaint.

The penalties

Despite the commission’s ruling that Dunafon had violated state ethics laws, it didn’t assess any fines or penalties.

Usually, for breaches of public trust for private gain, the penalty is assessed at twice the amount of the financial benefit. However, the commission noted that the complainant, MAK, and Colorado Ethics Watch never presented any evidence of a financial gain at the June 2024 hearing. (Colorado Ethics Watch closed in 2017.)

In addition, the city manager, Chuck Line, testified that denial of the applications would have only resulted in the application going back to the planning commission, and the later March 2015 vote removed “any causal link.”

The commission also denied the complainant’s request for attorney’s fees.

Those fees are expected to be substantial. Through 2023, Glendale had already paid more than $2 million to defend the complaints and lawsuits tied to those complaints. At that same time, the state of Colorado refused to disclose what it paid for attorneys’ fees. However, an ethics complaint filed in 2012 against Scott Gessler — then Secretary of State — and which lasted through 2018, cost taxpayers more than $500,000.

The dissenting opinion

Commissioner Cole Wist disagreed with part of the majority opinion.

In his dissent, he noted that state law does not define “personal or private interest” as it applies to the ethics commission. He wrote he would prefer a definition of a “pecuniary” interest.

As Wist later explained, that could, for example, require showing actual financial interest, rather than a relationship or connection to someone.

“In the absence of such a bright-line rule, a more subjective standard would require the IEC to evaluate the relative closeness of a personal relationship between a public official and an individual with a matter pending before the public body in order to determine whether a public official has a ‘personal or private interest’ in the matter,” Wist wrote.

He added: “Such a standard could result in widespread recusals in smaller cities and counties where public officials are well-known in the community. Differentiating between a public official’s personal or private interests in matters involving a romantic partner, daughter-in-law, friend, acquaintance, or business partner would become a wholly subjective standard difficult for local public officials to comply with.”

He wrote that the complainants failed to prove Dunafon had a financial interest in those businesses. Based on the evidence presented at the June 2024 hearing, West said he did not believe Dunafon’s first vote in February 2015 was improper.

However, that lack of evidence on financials was based in part on the complainants’ failure to serve Matthews and her daughter with subpoenas, and Dunafon refused to obey subpoenas issued by the commission for his testimony, both for the investigation and for the hearing.

Dunafon’s response

Josh Weiss of Brownstein, Hyatt, Farber & Schreck, which has represented Dunafon on the complaints, declared victory in the decision.

“The opinion was largely what I would have expected,” Weiss said. “It’s a shame that Mayor Dunafon have gone through this for nearly a decade and the taxpayers (for the cost) just for a split decision and a slap on the wrist. What did that accomplish for ethics in Colorado?”

Weiss said Wist’s dissent captured what the defense had been thinking: “How can you have ethics rules if officials can’t know ahead of time which rules apply and when? It is hard to know whether there’s a personal or private interest if the definition is fuzzy.”

There is also the issue of jurisdiction.

Glendale had challenged the ethics commission on whether it had authority over the case. That is tied to the ethics statute, which requires the commission to assert jurisdiction over home-rule governments that do not have an ethics code.

Glendale does have one, but it lacked a gift ban, which led the commission to decide it could take on the complaints.

Weiss said Dunafon plans to appeal the decision to the Denver District Court, which is already reviewing the Glendale lawsuit after the state Court of Appeals sent it back to the Denver District Court last year. Weiss said Dunafon’s appeal will make a similar argument.