The Colorado Supreme Court ruled on Monday that an organization that spent $4 million to advocate on ballot initiatives in the 2020 election is not required to disclose its donors and spending.

The Supreme Court acknowledged that multiple factors suggested Unite for Colorado was a group whose “major purpose” was ballot issue advocacy. However, because Unite for Colorado only spent 23% of its total money on ballot initiatives, its “low percentage of overall spending on ballot issue advocacy” exempted it from disclosure requirements.

“Spending less than a quarter of all expenditures on ballot issue advocacy does not reflect a major purpose because it does not reflect a considerable or principal amount of an organization’s overall spending,” wrote Chief Justice Monica M. Márquez in the June 29 opinion, adding that it was a “close call.”

Unite for Colorado spent roughly $17 million during 2020. Among other things, the group funded signature gathering and advertising for three ballot measures, taking the conservative position on each.

However, Unite for Colorado attracted a campaign finance complaint, alleging it failed to register as an issue committee. Issue committees must register with the state if they spend over $200 on any ballot initiative and if their “major purpose” is ballot issue advocacy. Spending and donor disclosure requirements apply for committees that spend in excess of $5,000.

Under the legal standard in place at the time, Colorado’s deputy secretary of state determined Unite for Colorado’s major purpose was ballot issue advocacy. He ordered Unite for Colorado to pay a $40,000 fine and required it to disclose its contributions and expenditures from early 2020 onward.

Unite for Colorado challenged that determination, and then-Denver District Court Judge David H. Goldberg agreed with the group. Goldberg noted Colorado’s campaign finance law referred to spending on “a ballot issue.” Although Unite for Colorado spent nearly a quarter of its money on ballot issue advocacy, it spent 10% or less on each of the three individual measures.

The Colorado Secretary of State’s Office appealed, and a three-judge Court of Appeals panel reinstated the deputy secretary’s decision. Weighing the circumstances, the panel reasoned the group’s $4 million aggregate expenditure required it to register as an issue committee.

“We conclude that Unite is precisely the type of organization that the people of Colorado envisioned” in enacting campaign finance regulations, wrote Judge Terry Fox.

While the Unite for Colorado complaint was being litigated, the General Assembly passed a forward-looking law that clarified how much an organization must spend on ballot measures relative to its total funds in order to have a major purpose of ballot issue advocacy. Under that framework, enacted in 2022, Unite for Colorado’s expenditure on the three initiatives — 23% of its total spending — would not have qualified.

During oral arguments, the government argued that it was still important to get an answer in the case.

“It has been five years since these millions of dollars of advocacy were run and voters still have no idea who funded it,” said Assistant Solicitor General Peter G. Baumann. “Voters have told us they have an interest in this activity and, as an institutional matter, the (secretary of state’s) office has an interest in not saying, ‘Good fight. We think you’re an issue committee, but we’re gonna let you get away with it this time and move on.’”

Some members of the court were worried about the upshot of siding with Unite for Colorado. Specifically, an organization could avoid the transparency required of issue committees if it were so wealthy that its expenditures on ballot initiatives were relatively small in comparison.

“Part of what my concern is with your position is that whenever the organization can become so large and have such a high financial amount, that nothing’s ever a major purpose,” said Justice Brian D. Boatright.

Márquez added the result would be even starker if, as Unite for Colorado suggested, courts could only look at a group’s spending on a single ballot initiative.

“Let’s say you have an organization that has $100 million. It spends 100% of that $100 million on specific ballot initiatives, but $10 million on each of 10 ballot initiatives,” she said. “So, 10% here, 10% here, 10% here — collectively spends 100% of its spending on those kind of initiatives. Under your argument, that entity would not qualify as an issue committee.”

“Correct,” responded attorney Jason R. Dunn. “The right way to frame it is: They spent 10% on one (initiative) and then 90% on a bunch of other things that don’t matter.”

Ultimately, the Supreme Court embraced the Court of Appeals’ understanding that it is proper to look at a single group’s spending in the aggregate, and not on individual ballot initiatives. Moreover, a “holistic, case-by-case assessment of an organization’s creation, spending, and ballot campaign-related activities” is the way to determine whether the major purpose is ballot issue advocacy, added Márquez.

While multiple factors suggested that Unite for Colorado had a major purpose of ballot issue advocacy, the court ultimately believed that the relatively low level of ballot issue spending, $4 million out of $17 million, did not push Unite for Colorado into the category of groups required to disclose contributions and expenditures.

“Unite did not have a major purpose of ballot issue advocacy during the 2020 election cycle. Therefore, it was not an issue committee,” Márquez wrote.

The case is Unite for Colorado v. Colorado Department of State et al.