Matt Arnold scores win against county GOP amid charges he’s waging proxy state chair battle

Author: Ernest Luning - March 9, 2017 - Updated: March 10, 2017

Matt Arnold, founder and director of Campaign Integrity Watchdog, greets Republicans at a campaign event in this file photo. (Photo by Ernest Luning/The Colorado Statesman)
Matt Arnold, founder and director of Campaign Integrity Watchdog, greets Republicans at a campaign event in this file photo. (Photo by Ernest Luning/The Colorado Statesman)

Conservative gadfly Matt Arnold, a persistent thorn in the side of lots of Colorado Republicans, dug in a little deeper this week.

In response to a complaint filed by Arnold’s Campaign Integrity Watchdog organization, the El Paso County GOP admitted in court Tuesday that it made some mistakes in campaign finance filings last year and agreed to pay nominal fines.

It’s the most recent win notched by Arnold’s organization but, according to some of his detractors, it’s also a salvo in the battle for control of the state Republican Party, a contention Arnold vehemently denies.

An administrative law judge accepted a joint stipulated agreement between Arnold’s organization and the El Paso County Party stating that the party made five errors in its state contribution reports filed last summer — listing incorrect occupations for five donors, including Secretary of State Wayne Williams, who was listed as retired — and would pay $250 in fines. They also agreed to suspend an additional $2,500 in fines so long as the party returned the errant contributions within 30 days.

In the three years he’s been filing campaign finance compliance complaints — he founded CIW in 2014 and is the organization’s director —Arnold counts more than two dozen wins, along with a handful of losses. He hasn’t just leveled allegations at Republican organizations and candidates, but those have been the majority of his targets.

In the El Paso County case, both parties agreed that the county party could have faced fines as high as $30,850 according to a formula that compounds fines at $50 a day per violation.

“It would be unfair to force El Paso County Republicans to dig themselves out of a $30,000 hole created by the former chairman’s lack of due diligence and reckless disregard for the party’s disclosure obligations under state law,” Arnold said Wednesday.

That reference to the county’s “former chairman” is at the crux of charges from some Arnold critics that he’s waging a proxy war in the state chair race, which pits former El Paso County Chairman Jeff Hays against former congressional candidate George Athanasopoulos, an Arnold ally, and late entry Kevin McCarney, a Mesa County activist and Trump campaign organizer.

Colorado Republicans elect statewide officials to two-year terms at the party’s central committee meeting on April 1 at Englewood High School.

While Arnold contends he has no dog in the fight for state GOP chair — “not my circus, not my monkeys,” he said more than once when asked that question — some Hays backers argue he only filed the complaint against the El Paso County Republicans to embarrass Hays. They also blast Athanasopoulos for cozying up to Arnold instead of denouncing him.

Acknowledging that he’s no fan of Hays — ascribing his ill feelings to county party controversies stretching back years — Arnold, himself a candidate for state party chair six years ago and a candidate for CU regent at-large in 2012, makes no bones about his opposition to Hays’s bid to head the Colorado Republicans.

“That’s not the person I would want to have leading my party,” Arnold told The Colorado Statesman. “I think there are better options — people who don’t break the law, for example.”

Arnold said he was inspired to comb through the El Paso County campaign finance reports late last year when Hays was attempting to discipline a county officer for endorsing the Libertarian candidate for U.S. Senate after Republican nominee Darryl Glenn had pulled his support for Donald Trump. (Glenn changed his position on Trump’s candidacy several times in the course of a week after initially withdrawing his endorsement in the wake of the Access Hollywood tape’s release in early October.)

According to Arnold, Hays reopened old wounds during last fall’s intraparty disputes by bringing up old battles surrounding Arnold’s unsuccessful campaign for CU regent.

“Jeff Hays attacked me personally and threw me out there and lied about things that happened in 2012,” Arnold told The Statesman. “If you attack me and throw punches my way, expect to get a bloody nose. Particularly if you’re breaking state law, expect to be held accountable.”

Hays dismissed Arnold’s charges in a statement to The Statesman, maintaining that the errors CIW pegged were exceedingly minor and that the punishment — the party engaged powerhouse GOP attorney Chris Murray to defend against the complaints — was far out of proportion.

“At least one of our 2016 filings included 50,000 (spreadsheet) cells,” Hays said. “He discovered five clerical errors, for an accuracy rate on the order of 99.99 percent. I don’t think tax dollars should be spent adjudicating 0.01 percent error rates, especially when the errors are as insignificant as these.”

Hays pointed to one of the mistakes Arnold cited to make his point.

“One of the errors, for instance, was leaving blank the occupation field after typing ‘Monument Police Department’ in the employer field. We were supposed to enter a two-digit numerical code designating ‘law enforcement’ instead. The other four errors were similar.”

Daniel Cole, a GOP consultant and former executive director of the El Paso County party under Hays, swung back harder at Arnold.

“It’s unfortunate that Republican parties across the state are going to have to waste precious time checking 50,000 data cells making sure there are no mistakes, instead of focusing on Democrats,” he told The Statesman. “But if Matt Arnold is going to behave like this, county parties have no choice but to defend themselves.”

He argued that Arnold’s attacks accomplish little more than to discourage Republican volunteers.

“Why would anyone want to sign up to be the volunteer El Paso County Republican Party treasurer, knowing that her hard work and hundreds of hours donated over the course of the year are going to be met with lawsuits by a guy like Matt Arnold, out to get his fellow Republicans?” Cole asked.

Cole, a Hays supporter and occasional volunteer for his state chair campaign, said it was clear Arnold was trying to influence the state chair race in favor of Athanasopoulos, despite protestations to the contrary by both.

“Matt has been involved in the race for state chair through frequent comments on Facebook explicitly opposing Jeff’s candidacy, which began before he filed this complaint,” Cole said. “I think it is glaringly obvious he filed this complaint in order to benefit George.”

Pointing to a recent article critical of Arnold published by Reason Magazine, a national conservative journal, Cole called out Athanasopoulos for defending Arnold.

“Matt is the poster child for abuse of Colorado’s campaign finance regime, and we know that George defends Matt’s activities, the same activities Reason Magazine calls abusive and unconscionable,” Cole said.

“People are going to speculate about most secret motivations, but what we can say without speculation is that George is defending activities that Reason magazine brands as horrendous. I would say that demonstrates extremely bad judgment which, to take the charitable view, is probably a product of his inexperience. I don’t want a state chairman who defends assaults on fellow Republicans and assaults on the First Amendment, and those are Matt’s specialties,” he said.

In a recent Facebook Live chat to discuss his state chair candidacy, Athanasopoulos faced numerous questions from Kelly Maher, executive director of conservative organization Compass Colorado, about his association with Arnold.

Colorado Republican Party chair candidate George Athanasopoulos conducts a Facebook Live chat on Feb. 3, 2017, answering questions about his campaign for the statewide GOP leadership position. (Photo via Facebook)
Colorado Republican Party chair candidate George Athanasopoulos conducts a Facebook Live chat on Feb. 3, 2017, answering questions about his campaign for the statewide GOP leadership position. (Photo via Facebook)

“I know Matt Arnold,” Athanasopoulos said in the online forum. “I think he’s a good guy. I’m not involved in what he’s doing, but there is a perception that Matt Arnold and his organization unfairly go after Republicans. What I would counter with is Matt Arnold, he’s doing what he feels is right. Frankly, Matt Arnold is not the greatest offender in going after other Republicans. If you look at the way our primaries played out in 2016, there was a lot of Republican-on-Republican crime. I don’t think it was just a matter of differences in ideological opinion. I think a lot of that money had to do with races for leadership.”

After Maher pressed Athanasopoulos, asking him whether he would rule out offering Arnold a job, should he win the chair race, Athanasopoulos answered: “I’m not going to tell anybody no and, frankly, I think Matt would be way more awesome if he were pointed at the Democrats. One of the ways we do that is quit fighting among our own party. We can have differences of ideology, differences of opinion, but … the type of stuff we’ve seen behind the scenes for leadership — that’s not right, and I don’t support that. If we would stop doing that, maybe we can start focusing on the Democrats. I would be happy to have his help.”

Athanasopoulos added that he’d heard the race for state GOP chairman is “some sort of proxy for other things.”

“I can tell you I don’t have a horse in any of those things — I don’t have a favorite candidate for governor, I don’t have a favorite candidate for any race, and I won’t as chairman,” he said. “When I talk about being an honest broker, I am absolutely serious.”

For his part, Arnold told The Statesman last week that he wasn’t angling for a job from Athanasopoulos, if that’s how the state chair race turns out.

“I don’t know that I would be interested at this point,” he said. “I would have to give it some thought. I’m really getting a bit discouraged by the lack of integrity in party leadership.”

Arnold said he hasn’t ruled out putting in a bid to handle the state party’s campaign finance reporting.

“I would consider making a fair bid in a fair process. I would not consider leveraging any kind of personal connections,” he said. “I think I could provide the best value proposition, certainly understanding the law better than anyone but perhaps a very few people in the state. You can do things the right way. You don’t have to break the law to achieve your objectives.”

Athanasopoulos told The Statesman that the brouhaha over his relationship with Arnold was wildly overblown.

“Having good relationships with all portions of the party is not a bad thing,” he said. “I have not promised Matt a job, nor did I know about (his complaint) ahead of time. I didn’t coordinate with Matt, I didn’t have any knowledge of what he was doing. All I knew was that he and Jeff didn’t like one another.”

Outgoing Colorado Republican Party Chairman Steve House — he announced in January he wouldn’t be seeking a second term, creating an open race for his position — told The Statesman that he believes the state’s campaign finance law needs fixing.

“The law is a problem,” he said. “It’s not done well. You shouldn’t be allowed to sue somebody and force them into court when you’re talking about a $50 fine. You spend a lot of money to solve a problem that’s a lack of information that isn’t material.”

“If somebody willfully ignores the law, fine,” House added. “But the penalty doesn’t fit the crime if you’re going to court and paying a $100 fine or a $10,000 fine over leaving out a contributor’s occupation or employer — the crime doesn’t warrant that kind of punishment, that’s for sure.”

He recalled an instance when Arnold filed a complaint against the state party, alleging a couple of small donations had been reported incorrectly.

“We had two $3 donations, and Matt went after us,” House said and then sighed. “When you’re spending $5,000 to correct missing data, there should be a cure period in the law. When somebody points out you have a problem, you should have 90 days to fix it.”

He said the way the law is structured, it also encourages campaign finance watchdogs — including Arnold — to wait until the very last minute to file complaints, sometimes on the day before the 180-day statute of limitations kick in, since fines accrue from the day the supposed violation occurred.

“Many of these things come up at the 179th day, because the longer you wait, the bigger the fine appears to be. That’s not what the spirit of this law is, and we need to fix it.”

House said he’s spoken with state officials and lawmakers, encouraging a legislative solution. “We should run a bill that says, ‘Hey, this is out of control’ — it’s just ridiculous, it’s not fair.”

House acknowledged that he’s sparred a few times with Arnold and CIW, including in court. He said that at one point he was considering bringing Arnold on to do some compliance work for the party. Although both House and Arnold agree negotiations broke down before coming to an agreement on that, they disagree over who dropped the ball.

“Matt’s a smart guy,” House added. “Why does he continue to do it? Does he honestly think a missing occupation is that big of a problem? Is this actually protecting anybody? I want to know what is he motivated by to make the party spend enormous amounts of money. It bothers me. If the motivation is to get even with Jeff Hays for something, is that the spirit of what this law is written for? Basically, he’s using the law to go after his enemies rather than protect voters.”

Arnold says the campaign finance reports either comply with the law or they don’t.

“It comes down to, were they actually compliant with their legal obligations to report and disclose the party’s financial activities,” he told The Statesman.

CIW has several complaints making their way through the state’s administrative court system and a handful under appeal.

In another case similar to the complaint Arnold filed against El Paso County, his organization alleges that the Arapahoe County Republican Party made some mistakes in its campaign finance reports last year, including misstating some donors’ occupations and also classifying some electioneering communication spending incorrectly.

The Arapahoe County GOP complaint is set for hearing before an administrative law judge on March 16.

Ernest Luning

Ernest Luning

Ernest Luning is a political correspondent for Colorado Politics. He has covered politics and government for newspapers and online news sites in Colorado for more than 25 years, including at the Highlands Ranch Herald, the Jefferson Sentinels chain of community newspapers and the Aurora Sentinel, where he was the city hall and cops reporter. After editing the Aurora Daily Sun, he was a political reporter and blogger for The Colorado Independent site. For nearly a decade, he was a senior political reporter and occasional editor at The Colorado Statesman before the 119-year-old publication merged with Colorado Politics in 2017.