Taxpayers are on the hook for more than half a million dollars from legal costs involving a lawsuit filed by then-Secretary of State Scott Gessler against the Colorado Independent Ethics Commission.
But the exact amount will never be known, because the Secretary of State’s office disposed of the first two years of billing records related to the lawsuit while it was still moving through the courts.
The Secretary of State’s Office covered Gessler’s legal costs in the matter. The attorney general’s staff represented the ethics commission.
The disposal of records in what was until recently an active lawsuit raises concerns with a leading open-records advocate. The public has an interest in knowing how much the lawsuit cost taxpayers, and because two years of records are gone, “we have only a partial picture” of those costs, said Jeff Roberts, executive director of the Colorado Freedom of Information Coalition.
On June 5, the Colorado Supreme Court ruled unanimously against Gessler, who challenged the ethics commission’s jurisdiction over a complaint filed in 2012 that claimed Gessler had misappropriated funds.
The commission ruled that Gessler had violated the state’s ethics law and ordered him to pay a fine of $1,514.18. That fine has yet to be paid, according to responses to Colorado Politics’ open-records requests and review of court records.
Gessler and his most recent law firm have not responded to emails asking about the fine.
The estimated legal costs for attorneys on Gessler’s side and for the attorney general’s staff in representing the commission, total about $502,507, based on responses to open records requests and other information.
The reason that’s an estimate: the Secretary of State’s office could not provide copies of legal bills prior to July 1, 2014.
The matter had been racking up legal bills since October 2012, when the first complaint was filed with the ethics commission by Colorado Ethics Watch, which has since closed.
Gessler was secretary of state from 2011 until January 2015, when Wayne Williams took over the post.
The complaint stemmed from a trip Gessler took to Sarasota, Florida, in 2012 to attend a seminar hosted by the Republican National Lawyers Association. The day after the two-day seminar ended, on Aug. 26, Gessler went to the Republican National Convention in Tampa.
According to court documents, the cost of Gessler’s airfare and lodging to Sarasota was $1,278.90. Gessler paid for it out of a discretionary fund within the Secretary of State’s office. He also directed his staff to give him whatever funds were remaining in the discretionary account, about $117.99, without providing receipts for those funds.
The ethics commission ruled in January 2013 that Gessler’s trip was for partisan political purposes and that his acceptance of the remaining discretionary money without providing receipts was for personal use. It levied a fine against Gessler for $1,514.88.
A month later, a Denver District Court judge put a hold on paying the fine until the legal case was resolved. Court hearings continued until June 5, 2018, with the Denver District Court, the Colorado Court of Appeals and the Colorado Supreme Court each ruled against Gessler.
Colorado Politics filed a series of open records request for all legal bills related to the Gessler lawsuit, both with the ethics commission and the Secretary of State’s office, which covered all of Gessler’s legal bills for the outside counsel used during the four years the case was moving through the courts, even after he left his office in January 2015.
Through the more than five years of the lawsuit, Gessler was represented by Michael Davis and Michael Francisco from MRD Law; David Lane from Killmer, Lane & Newman; and Robert Bruce of RJB Lawyer and Adroit Advocates, where Gessler is now a partner.
When asked by Colorado Politics why the first two yeas of legal expenses were not available, the Secretary of State’s office cited a records retention policy of maintaining records of the current year and the previous two years before disposal.
It’s not clear exactly when the records were disposed of.
Colorado Politics did obtain copies of the Secretary of State’s office’s legal bills dated from July 1, 2014 through June 30, 2017, the month in which the final Supreme Court hearing on the Gessler matter took place. The final tally came with help from John Tomasic, who filed CORA requests on behalf of the Colorado Independent in 2013.
In August 2015, the Colorado Independent reported that the legal costs on both sides, from 2012 through July 1, 2015, then totaled $343,473, based on responses to open records requests they filed with the Secretary of State and the Attorney General’s office. Colorado Ethics Watch also obtained those records.
Colorado Politics used that data, as well as information provided through recent responses to open records requests from the Attorney General’s office and the Secretary of State, to come up with a final estimate of $502,507.
As to Gessler’s fine: a Denver District Court judge put a hold on the fine in February 2013, according to court records obtained by Colorado Politics. That stay was to remain in place until the case reached its final resolution, which happened on June 5.
Once the lawsuit was resolved at the state Supreme Court level, laws of court procedure say the stay is automatically lifted and Gessler is now responsible for paying the fine.
Then there’s the matter of the Secretary of State’s office destroying records related to an active lawsuit. Deputy Secretary of State Suzanne Staiert told Colorado Politics that the state’s record retention policy contains no exception for ongoing lawsuits.
But that view appears to be in conflict with Colorado State Archives, the agency designated with coming up with retention schedules for records pertaining to state agencies. Its policies state that “NO RECORD SHALL BE DESTROYED UNDER THIS SCHEDULE AUTHORITY SO LONG AS IT PERTAINS TO ANY PENDING LEGAL CASE, CLAIM, ACTION OR AUDIT.”
It gets a little murky after that. The records retention manual for state agencies developed by Colorado State Archives spells out the policy on retaining litigation records, stating that files include some or all (Colorado Politics’ emphasis) of the following documents: affidavits, summons and complaints, responses, orders of dismissals, notice and general appeal, laws and regulations applying to a particular case, legal briefs, transcripts of proceedings, orders, court decisions, and related information (Colorado Politics’ emphasis).
State law (CRS 24-80-103) also addresses record retention policies. Records “unanimously determined to be of no legal, administrative, or historical value shall be disposed of by such method as such officers may specify,” according to the statute. That unanimous decision must come from the state Department of Personnel and Administration, which oversees state archives; and officers of the state agencies, the law says.
That’s verified by spokesman Doug Platt of the Department of Personnel and Administration, who told Colorado Politics that agencies are responsible for storing their own “temporary” records — that is, records maintained by an agency that would not rise to the level of being retained by state archives for historical purposes. The archives department relies on agencies to define which records they would submit for the permanent collection, he added.
Platt said the question may be whether an agency is preserving records that could be subject to the state’s open record law rather than what is kept in state archives.
Staiert told Colorado Politics Tuesday that her office did not ignore a directive.
“The exemption to records destruction relates to a court rule requiring parties to retain all discoverable documents in cases that have been filed or where a filing is anticipated,” she said. It’s what lawyers refer to as a “litigation hold.” Legal bills “in defense of a case are not evidence in the case and are not subject to preservation,” Staiert added.
But Roberts, the Colorado Freedom of Information Coalition executive, told Colorado Politics that three years does not seem like a long time to retain records related to a lawsuit.
“Those things can go on for years,” he said.
State Sen. John Kefalas, Democrat of Fort Collins, is also troubled by the Secretary of State’s decision to destroy the legal bills prior to July 1, 2014, telling Colorado Politics that unless there are statutes that specifically pertain to the issue, it may be something the legislature will want to change.
The taxpayers clearly need to know how much was spent on legal costs, Kefalas said. “We want to make sure the taxpayers know how their money is spent, especially with a lawsuit.”