The Colorado Independent Ethics Commission has ruled that Rick Palacio, a former chief of staff to Gov. Jared Polis and former chair of the state Democratic Party, violated state law by contracting with the governor’s office within six months of his departure.

The commission did not fine Palacio and dismissed another claim that he had “double-dipped” as both a contractor and state employee.

According to the commission’s findings, Palacio was appointed interim chief of staff in August 2020 when Polis’ then-chief, Lisa Kaufmann, went on maternity leave. Kaufmann is now the strategic advisor for the Office of Economic and International Trade. 

Palacio’s primary duty, while serving as chief of staff, was dealing with the pandemic, the commission wrote in its Dec. 6 order. Kaufmann returned from maternity leave on Nov. 9, 2020, although Palacio remained on staff through Nov. 30 to “assist Ms. Kaufmann in the transition back to the chief of staff.” He continued to work on pandemic-related issues.

Kaufmann decided to retain Palacio as an outside consultant, which began on Dec. 1, 2020. He was paid $14,000 monthly for the contract from December 2020 through May 2021. According to previous reporting by The Denver Gazette, Palacio’s Palacio Strategies Group was paid an additional $70,000 for June through October 2020. However, it’s unknown if that was part of the same contract.

His LinkedIn profile, however, said his work with the governor’s office ran through October 2021.

$85k deal given to Polis former chief of staff at the center of state ethics complaint

State law (CRS 24-18-201(1)) says a former state employee may not, within six months of the termination of his employment, be under contract with a state agency “involving matters with which he was directly involved during his employment.”

The commission noted an exception: when the contract is awarded through a competitive bid. No such competitive bid existed.

As for penalties, the commission can assess fines when there is a breach of public trust for private gain. But the commission said the complainant, former 18th Judicial District Attorney and incoming 23rd Judicial District Attorney George Brauchler did not submit any evidence that Palacio had breached the public trust.

Through a spokesperson, Polis’ office told Colorado Politics, “We are pleased with the Independent Ethics Commission’s unequivocal finding that Rick Palacio’s actions never compromised the public trust or caused harm to the state. On the contrary, his leadership as interim Chief of Staff during Colorado’s response to the COVID-19 pandemic and historic wildfires was vital to saving lives and navigating unprecedented challenges.”

Polis’ office added: “Rick Palacio is a proud sixth-generation Coloradan raised in Pueblo who has dedicated himself to the well-being of our state. His continued service as a consultant brought expertise and stability during a critical time, ensuring that Colorado remained strong and resilient. We are deeply grateful for his exceptional contributions and all the Coloradans who stepped forward to serve during those historic and difficult days.”

The statement did not address the finding that Palacio violated state law.

The ethics commission held a hearing in April on the complaint, during which neither side presented any evidence other than the facts that both sides jointly agreed to prior to the hearing. The commission deliberated twice on the complaint, most recently in November.

Brauchler filed the complaint on behalf of Defend Colorado in November 2021. He told Colorado Politics he understood their rationale. The part the commission didn’t consider, the double dipping, did happen, even if attributed to an administrative error. “You have to believe this guy had no clue he got this windfall” and would pay it back only if he was called out on it. “The irony of this is that the IEC was championed and paid for by the governor…what we’ve seen now with Hickenlooper and Polis” is an unwillingness to adhere to those laws. 

“There’s no real teeth in it. The only consequence for this is the Colorado Politics story,” he said. “It’s probably a call for more reform of the IEC. If you violate a rule like this, shouldn’t there be a penalty?”

The original complaint alleged that Palacio received a full-time government salary of $15,000, plus a $15,000 payment to his own company in the same month. However, the commission found that the governor’s human resources staff made an error regarding the end of his employment versus the end of the final pay period, a difference of four days. Palacio reimbursed the state for the money paid for the four days.

Palacio served as chair of the state Democratic Party from 2011 to 2017. In 2018, his companies, Palacio Strategies and Majority Institute, were paid $327,900 by Bold Colorado, the independent expenditure committee that backed Polis in his first run for governor. He also was a senior advisor in 2019 to former Gov. John Hickenlooper in the governor’s run for the U.S. Senate in 2020. According to his LinkedIn profile, he continues to operate Palacio Strategies and The Majority Institute.

Palacio did not return a request for comment.

Kaufmann, who had been associated with the governor since his first run for Congress in 2007 and has been called his “most trusted advisor,” left the governor’s office on Jan. 1, 2023. 

She did not respond to a request for comment.