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Ari Armstrong's February 1999 Posts

Following are several posts I wrote and published in February 1999 through the Colorado Freedom Report, ported here on September 5, 2025. All contents copyright © by Ari Armstrong. Some of the posts were written by others, as noted. Please note that I may not in every case still agree with my older positions.

Topics include campaign finance, nonprofits, and zoning.

Campaign Finance Reform: Making a Bad Problem Worse

by Ari Armstrong

The state legislature recently tabled a bill from Rob Fairbank (R-Littleton) that would raise the campaign contribution caps set by the 1996 ballot initiative Amendment 15. As introduced the bill would have eliminated limits on campaign contributions, but with amendments it will likely raise the caps, when and if it is reconsidered by the House later this session. For example, individuals are now limited to $100 contributions to state representatives; this limit is expected to rise to $500.

The revisions, then, will likely improve the laws but not wholly revise them. The law will remain problematic and incapable of stopping special interests from buying favors from politicians. The campaign laws on the books do more harm than good, but libertarian theory provides a workable solution to the problem of political corruption.

The current law, which can be found on-line in the Colorado Statutes starting with section 1-45-101, states its purpose as follows:

The people of the state of Colorado hereby find and declare that large campaign contributions to political candidates allow wealthy contributors and special interest groups to exercise a disproportionate level of influence over the political process; that large campaign contributions create the potential for corruption and the appearance of corruption; that the rising costs of campaigning for political office prevent qualified citizens from running for political office; and that the interests of the public are best served by limiting campaign contributions, encouraging voluntary campaign spending limits, full and timely disclosure of campaign contributions, and strong enforcement of campaign laws.

The law specifies a number of restrictions on campaign contributions which supposedly uphold "the interests of the public." These are the main restrictions.

There are four main problems with the Amendment 15 campaign finance laws. First, they are not very effective. The main way people have avoided the law is to set up independent organizations to sway voters, usually under the fictitious wording of "educating" rather than directly influencing the elections. (For more on this matter, see my article on non-profits in this issue.) Far from making elections more accessible to average "qualified candidates," then, the current laws have handed the advantage to the politically savvy, who know how to thread money through legal loopholes.

Second, the current campaign laws permit subjective interpretation. "Independent expenditures" are defined as those "not controlled by, or coordinated with, any candidate or any agent of such candidate." A "conduit" is defined as "a person who transmits more than one contribution from another person directly to a candidate or candidate committee" (with certain qualifications). Both of these definitions are ambiguous enough to raise problems.

For example, according to Peter Maysmith of Colorado Common Cause, an independent group bought $7,000 worth of T-shirts and delivered them to Gail Schoettler's campaign committee for the 1998 gubernatorial race, resulting in fines for both organizations. Darryl Eskin, Executive Director of the Democratic Party of Colorado, interprets the events differently. According to Eskin, the official committee did not solicit the expenditure, did not "coordinate" it, and did not receive the T-shirts. Rather, a person, though a volunteer for Schoettler's campaign, independently bought the shirts and independently distributed them at the General Assembly. Further, suggests Eskin, Common Cause was "nit picking" in attacking this case, looking to make an example out of the first suspected violation of the law. So which side is right? Were the T-shirts paid for independently or coordinated with the campaign? We might as well flip a coin, for there is no rational basis to decide.

General hypotheticals can also make the point. If a friend of a candidate decides to make independent expenditures, surely the friend is going to have a fairly intimate knowledge of what points the candidate is running on. If a person reads of a committee's goals in the newspaper, and then decides to make expenditures to advance these goals, is this "coordination?" What about a member of the official committee who is close friends with an independent spender? Spotting a "conduit" can be just as difficult. If a husband convinces his wife to match his contribution, is he a "conduit?"

Also, telling the difference between an "education" group, which can organize as a non-profit and escape the disclosure rules, and an advocacy group is tricky at best. For example, Common Cause registered a complaint against the non-profit group Centennial Spirit, which "educated" voters about the flaws of Democratic tax records and the virtues of Republican tax records. Eskin, as head of the opposing party, characterized the TV spots of Centennial Spirit as indistinguishable from the official advertisements. So does this activity rightly fall within the disclosure rules? There's no clear way to evaluate it. Subjective law opens the door to abuse (not to mention hefty legal fees).

The third problem with the current campaign finance laws is that they hand the advantage to rich candidates, who can spend any amount of their own money on their own campaigns. A candidate of average means must rely on the contributions of others, and so is hurt by caps on contributions.

Finally, the current laws hurt the chances of third parties. The smaller the party, the more important it is that its members be able to contribute to campaigns.

The Paradox of Campaign Finance Reform

In a recent conversation, I asked Representative Ron Tupa, a Democrat from Boulder who favors even tighter restrictions on campaign contributions, why we shouldn't just trust the voters to decide when an election has been unfairly bought.

"If people were more knowledgeable, we wouldn't need the campaign finance laws," Tupa replied. In other words, if people were smart enough to vote against sell-out politicians, we wouldn't need the reforms.

But this creates a peculiar paradox. If people are so dumb that they vote for corrupt politicians, as the campaign finance movement assumes, then how can they be smart enough to enact good campaign finance legislation?

Categorizing the possible motives of the voters who passed Amendment 15 may help resolve this paradox. I've thought of eight groups.

1) It's always important to remember that less than half of the eligible population votes in elections these days. According to the League of Women Voters, only 82% of eligible Colorado residents registered in 1996, and only 53% of those who registered actually voted, which means that only 43% of the qualified population voted. About two-thirds of those who voted supported Amendment 15, so the law passed with less than 30% support. (Bill Clinton, our "twice popularly elected President," earned less than a quarter of the total potential votes in 1996. It depends on what your definition of "majority," is, I suppose.) Among those who don't vote are a group I'll call "very cynical," those who know what's going on in politics but who don't vote either on moral grounds or on Public Choice grounds (because a single vote is insignificant). The very cynical don't participate in democracy, don't trust it, and have either given up on the system or want radical reform. These types are either libertarian or close to the libertarian camp.

2) The other group of non-voters is the "disinterested." Such people avoid politics altogether either on Public Choice grounds or because they are ignorant concerning politics. While these people will probably never directly participate in the libertarian movement, their existence does bolster the argument that voting isn't really about "rule by the people."

3) Of those who voted, around a third voted against Amendment 15. One group who voted against it is "happy." These happy voters realize that special interest groups are involved in politics, but either don't believe this causes a significant problem or don't believe the reform laws will help. Members of this group may vary in how informed they are about the issues and candidates.

4) Others who voted against the contribution caps are "market reformers." This group believes the laws limiting campaign funds are ambiguous, an infringement on liberty, and beneficial to wealthy individuals and major parties. Market reformers lean libertarian in their thinking.

5) The final people to vote against campaign finance reforms are the "special interest elitists," those who actually buy favors from the politicians and blatantly loot the public.

6) The first group that voted for Amendment 15 is "welfare-liberal elitist." These people believe that most other voters are basically dumb and incapable of seeing past glossy advertisements to vote for candidates of integrity. The "welfare-liberal elitist" group sees democracy not as an inherently noble system, but rather as a tool to be used, by them, to reform society. Basically, people have to be duped into voting the right way. These elitists claim to believe in majority rule, but what they really believe is that, while other people cannot be trusted (hence the need for campaign reform), democracy is still an effective way for the elite to retain their hegemony.

7) Others who voted for campaign finance reform are "romantically naive" of politics. (They may be well-informed in other areas.) They don't understand how special interest groups buy politicians any more than they understand the implications of the campaign finance laws. They recognize that they're not generally able to tell good candidates from bad, and they have a vague notion that campaign finance reform might weed out the bad politicians for them. They vote because they believe the propaganda they learned in government schools concerning the nobility of democracy; they truly believe that voting is the mechanism by which "the people" govern themselves.

8) Finally, the third group that voted for Amendment 15 is "cynical." This group lashed out at the political process per se by passing Amendment 15 and making running for office more difficult for everyone. The cynical voters have all along known that they've been voting for politicians funded by special interests, but they simply haven't cared, or they've believed the opposing candidates to be just as corrupt. These voters have generally been voting for the lesser of two evils, rather than a candidate they really believed in. They voted for the campaign laws, not to improve the system, but to register general discontent.

It would seem, then, that only a small portion of the population voted for Amendment 15 while believing it would actually improve the political system. Of that group, some believe that most of the population is too poorly informed to vote wisely, and the rest really are too poorly informed to vote wisely. Both cases suggest that political reform should be much more radical than the mere limitation of campaign contributions.

Indeed, the libertarian case is supported by the existence of all but happy voters. Those who are cynical deserve real reform. The elitists should not be trusted with power, and the romantics should not be trusted to give it to them. The promise and problem of libertarianism is to enable those who desire freedom to escape the power-lust of the Statist elites and the ignorance of the Statist romantics into a system of voluntarism.

A Libertarian Critique of Campaign Finance Restrictions

In libertarian theory, people are permitted to spend their money in any peaceable way. The only restrictions are against criminal behavior. For instance, it remains illegal for people to purchase the services of a hit-man to take care of an annoying party. If a hit-man does murder someone, both the hit-man and the person who paid the hit-man are liable.

People remain free, in libertarianism, to purchase goods and services for self-defense. For instance, a person may purchase a gun to protect against criminals and may purchase security systems and personnel. In short, money for self-defense is good, money for criminal activity is bad.

This principle applies to the political process. People should not be restricted from spending money to protect themselves from political plunder. A contribution to a candidate supportive of the free market is merely a form of self-defense.

On the flip side, many contributions are made to gain the fruits of political plunder, to gain political favors such as subsidies and protective regulations. Ideally from a libertarian perspective, contributions made in political self-defense would not be restricted, while contributions made for political plunder would be eliminated completely. However, this raises problems of subjective law, and besides it would be impossible to implement.

Given the fact that bad contributions cannot be thrown out apart from good, the strongest libertarian case is that neither should be restricted. An analogy is gun rights: just because a small segment of the population uses guns irresponsibly or criminally, doesn't mean the rest of us should suffer a restriction of our rights. Similarly, a limit on legitimate campaign contributions is not justified by the prevalence of illegitimate ones.

The campaign reforms must also be rejected on more pragmatic grounds, as campaign finance laws are subjective and they benefit political insiders over ordinary people and major parties over third parties (including the Libertarian Party).

The more ambitious of the campaign reformers would agree with some of the pragmatic points I make concerning the problems of the current law. Their answer would be, not to repeal all restrictions, but to move to a system of tax-funded campaigns. Not only would this further entrench the major political parties, but it would introduce at the state level the morally repugnant practice of forcing people to pay for the publication of ideas with which they vehemently disagree.

It helps but little to "allow" people to divert some of their tax dollars to campaigns, as this doesn't serve to reduce government spending and so merely increases the government deficit or decreases the surplus. In other words, I am hurt if my neighbors choose to divert their tax dollars to campaigns. (Besides, a choice of how to pay a tax is no replacement for the choice of whether to pay a tax.)

A strictly voluntary system of campaign restrictions would never serve to adequately reform politics, because the system is fundamentally corrupt. The campaign reformers implicitly admit this, because they pursue mainly coercive reforms. A voluntary system of funding cannot save a basically involuntary political system.

A Libertarian Solution to Campaign Corruption

Special interests are able to buy candidates for one simple reason: politicians have great power to issue government subsidies and protective regulations to the favored elite. If politicians didn't have any power, there would be no reason to buy them.

The libertarian solution to campaign corruption is simple, then: divest the politicians of their power. If the budget and regulatory ability of Colorado's government were cut by 90%, the problem of corrupt campaigns would disappear overnight. It's pointless to buy access to the levers of power, if pulling those levers doesn't do anything.

There I go again, offering a radical solution. But today's welfare-liberals created the very problems they now seek to resolve. When politicians spend nearly half of everyone's wealth and regulate nearly all aspects of life, there simply is going to be corruption, and no piece-meal reform is going to correct the problem. The only workable solution is to move toward a system of economic liberty and social voluntarism. Accountability and responsibility exist only to the extent that society is organized by choice rather than by force. Politicians take money by force. No polite phrasing will change this fundamental fact, and no campaign finance reform can prevent the resulting corruption.

Campaign Finance Laws: They Work

by Peter Maysmith

Maysmith of Colorado Common Cause here responds to Ari Armstrong's "Campaign Finance Reform: Making a Bad Problem Worse."

To imply that a relatively small number of people voted for Amendment 15 in 1996 is disingenuous. Amendment 15 won decisively with 66% of the vote. In fact, Amendment 15 received more votes than any other issue or candidate on the general election ballot in Colorado in November of 1996. Both polling and voter decisions at ballot boxes in states throughout the country, tell us that campaign finance reform is incredibly popular with citizens of all political stripes. If the point is that voter participation in our democracy is frustratingly low, we absolutely agree. In fact, we believe one of the reasons non-participation is so high is because of the dominance of big money in our politics and the perception that the contribution and vote of the average person doesn't count.

The use of the term "welfare-liberal" to describe Common Cause (a non-partisan organization) and supporters of campaign finance reform is unfair. The concept of campaign finance reform is rooted in the populist ideal that every citizen should have a voice and an opportunity to participate in the political system in a meaningful way. The very use of the citizen initiative process, something Common Cause has employed on numerous occasions, implies a trust of the people. The welfare-liberal label has a catchy ring to it, but it doesn't fit the bill.

We believe the law was extremely effective. Far more people contributed money to candidates in 1998 than in previous years. Candidates were forced to reach out to a broader base of potential contributors and speak to many more citizens in order to fundraise successfully. The influence of special interests on candidate campaigns was dramatically diminished and the voice of citizens was significantly enhanced.

The major problem this last election cycle was the appearance of "educational groups" and their thinly veiled efforts to elect candidates. These groups, however, are not unique to Colorado. Throughout the country, including in states without any contribution limits at all, entities similar to the ones we saw in Colorado have sprung up. We are pursuing a legal complaint against one of the groups that we believe clearly violated the law.

Election law may be complicated but that does not mean that one cannot easily figure out what is, and what is not, legal. To reference the example cited regarding the T-shirts donated to Gail Schoettler's campaign, an Administrative Law Judge determined this was a clear-cut violation. The T-shirts in question had a value of well over the contribution limit. Dropping off $6,000 worth of T-shirts to the Schoettler campaign is no different from dropping off a $6,000 check. This case does not hinge on co-ordination and it is an easy call to say it was a violation of the law.

The bugaboo of rich candidates buying their way into office is often raised but rarely ever happens in reality. The last time a wealthy candidate tried to buy his way into office, he was soundly routed. (Bruce Benson in 1994 before campaign finance reform was in place!)

The contention that campaign finance reform hurts third parties is mystifying. Unfortunately, third parties are already significantly discriminated against and reducing the two major parties' access to huge campaign contributions would certainly not adversely impact third parties. In addition to what I think, Ross Perot with his Reform Party as well as the Green Party are both staunch advocates of campaign finance reform.

In closing, the question was asked of Representative Tupa, "Why shouldn't we just trust the voters to decide when an election has been unfairly bought?" The answer, of course, is that the voters did decide elections are unfairly bought, that is why they overwhelmingly approved strong campaign finance reform in 1996.

Campaign Finance Laws: Ineffectual and Problematic

by Ari Armstrong

In responding to Maysmith's piece, I'll pose five questions. Maysmith provides inadequate answers to all five.

Do the campaign finance reforms work?

Maysmith characterizes the reform laws as "extremely effective," but he doesn't offer any hard evidence to support this claim. He claims that more people gave money, but does this matter, even if true? By and large, campaigns were bought by the same small group of people who always buy them. Even if candidates spoke with more people, a contention I doubt Maysmith can support, we all know that candidates are pretty good at telling people what they want to hear without actually changing any policies.

Do people stay away from the voting booth because of big money, as Maysmith suggests? Hardly. As I noted, many refuse to vote on ethical grounds. Others do not vote because the vote of an individual is insignificant. Maysmith cites this fact, but he doesn't explain how the campaign reforms will help to change it. Because they can't. If Maysmith is correct, we should see a surge in voter turnout in 2000 relative to 1996. I predict that the percentage of eligible people who vote will stay about the same (or perhaps drop due to the Clinton fiasco).

I am not convinced that the reform laws have made any difference. The reforms might make it more difficult for some special interests, but they make it easier for others, and they do not alter the fundamental power structure. Any difference they may have made has been trivial. The finance laws are like putting a band-aid on a severed limb. Or, to use another analogy, I can imagine Maysmith standing on the ground in the initial torrents of Noah's Flood, holding an umbrella over his head and exclaiming with glee, "Look! I'm staying partly dry!"

Even if Maysmith can support the claim that the reform laws have limited the power of special interest groups, we must still weigh the possible benefits of the laws against the damage they do. Because the reform laws add new problems on top of the ones they seek to resolve, they should be rejected.

Are Colorado's campaign finance laws subjective?

Maysmith claims that the Schoettler example is clear-cut. However, the Democrats vehemently deny that the T-shirts were "dropped off," as Maysmith maintains. I grant that some cases may be clear-cut, but add that many cases will not be, because the law invites subjective interpretation. And let us not forget that those who decide the matter are political appointees and officials elected from a particular party.

Do the campaign finance laws hurt third parties?

I still maintain that the reform laws will hurt at least the Libertarian Party, because it has a small number of potential contributors. Maysmith notes that both the Green Party and Ross Perot support finance reforms. Well, if Perot is for it, who could be against it? Obviously, the Greens often want to run roughshod over the property rights of others, and so want to limit the ability of others to defend themselves politically. Both these examples provide strong reasons for NOT limiting campaign contributions.

Are the campaign finance laws just?

I am aware that issues of fairness generally are invisible to the eyes of the policy wonks. However, as I argue in my article, it is wrong to forcibly prevent someone from spending money in self-defense, including in the political arena.

Is the case for campaign finance laws contradictory?

Maysmith closes by saying the voters passed the campaign finance limits in 1996 because they realized "elections are unfairly bought." But he doesn't address the paradox I discussed. The whole case for campaign finance rests upon the notion that voters are too dumb to vote against politicians who have been bought by special interests. Where does this money go, after all? It goes to pay for expensive, glossy TV and radio ads that sway voters. If the voters were smart enough to see past this propaganda, there would be no need to limit the contributions. But, the reformers imply, the voters are dumb. Then how did they suddenly become smart enough to understand the intricacies of the campaign finance legislation? The case for campaign reform is fundamentally flawed.

Further, this flagrant contradiction in the reformers' case suggests that theories of democracy are frequently based on myth. Why do voters elect politicians the reformers don't like? Because they're too dumb to do otherwise. Why did they pass Amendment 15? Because they're brilliant! Groups which act to buttress the State often attribute motives and characteristics to voters which are convenient to the politics of the moment.

I offered a much more realistic picture of voting behavior in my article. First, I noted that Amendment 15 passed with less than 30% of the potential vote. Maysmith calls my reference to this fact "disingenuous" (though I got my figures from the League of Women Voters, for pete's sake), but if anything I overstated the numbers who voted for Amendment 15, as many who are eligible to vote aren't even counted in the statistics.

What's disingenuous is to treat the 57% (or more) of the population who chose not to vote as if they don't matter, as if they are only a "frustration" to the Statist elite, as Maysmith calls them. This is nothing but hubris.

Even when we look to those who voted for Amendment 15, many did not really believe it would improve the system. Some were simply too poorly informed to understand it at all. To this extent, one of the assumptions of the campaign reformers is partly true. Some voted for it purely out of cynicism, to say in effect, to hades with the politicians as a whole. Others who voted for it merely wanted to eliminate the special interest groups they don't like so that the special interest groups they do like can gain more power. The existence of this group hardly proves that the campaign laws are a good idea; quite the opposite.

Maysmith objects to my suggestion that those who support campaign finance reform are "welfare-liberal." For the record, I never referred to Common Cause as "welfare-liberal." Instead, I noted that supporters of campaign finance reforms in general tend to fall in that group. Common Cause is concerned with government finance and special interests, not with pushing welfare programs. Indeed, Common Cause does a lot of work that libertarians can support. On its national web page, the organization trounces "corporate welfare" and Bill Clinton's lousy idea of making the Federal government a major stock holder as a way of reforming Social(ized) (In)Security.

However, by fixating on campaign finance and ignoring substantial political reform, Common Cause in effect does support the status quo. So far as the group's members are concerned, I challenge Maysmith to run a questionnaire past everyone in Common Cause, consisting of three questions: 1) Do you believe Federal welfare programs should be abolished? 2) Do you believe Social Security should be abolished? 3) Do you believe government funding for schools should be abolished? I don't expect that Maysmith can find a single person in Common Cause to answer "yes" to any of these questions. Hence, yes, they are welfare-liberals. (I'm not name-calling, as Maysmith seems to think; I'm using the term in a technical way. I can hardly help it if welfare-liberals are less proud of their political philosophy than I am of being a "libertarian.")

I appreciate Maysmith's attempt to take power out of the hands of the special interest groups and put it back into the hands of individuals. Unfortunately, his proposed solution is problematic in itself and wholly inadequate. If we want to talk about real campaign reform, we must turn to libertarian theory.

Campaign Finance Laws: Unfair and Ambiguous

by David Bryant

I have been watching the movement to enact new campaign finance laws in Colorado since Common Cause floated their first proposal in 1992. I have also been directly affected by Amendment 15 since its enactment in 1996 -- I have served as the treasurer for an issue committee, for my own candidate committee, and for the Libertarian Party of Colorado. I have filed dozens of campaign finance reports with the Secretary of State's office, and I have reviewed many reports filed by other people. Based on my direct observation and experience, I think Maysmith has overlooked some important facts and distorted several others.

The most important fact that Maysmith overlooks is obvious. Amendment 15 is riddled with loopholes. Since a person is defined to include a corporation, a partnership, or an association, and since the contribution limits are applied to persons individually, wealthy donors can legally funnel large amounts of money to the candidates of their choice by first creating a number of fictitious persons and later by passing funds through these imaginary entities.

Now Amendment 15 attempts to regulate such game-playing by stating that "No person shall act as a conduit for a contribution." (CRS 1-45-104(8)). So it is theoretically true that this simple expedient of spawning corporations cannot legally funnel money directly to a candidate. But those entities may make "independent expenditures" which can, and do, directly benefit particular candidates. And so long as these fictitious persons file all the required paperwork, the whole process is legal.

Who can afford to go to this much trouble to support a particular candidate? An independent voter of limited means who honestly believes that Joe X is the best man for the job? Of course not! Daddy Bigbucks who already owns six politicians and wants to install three more? Who else?

Maysmith distorts several facts. I will point out three of those distortions. When he says that "Far more people contributed money to candidates in 1998 than in previous years" he is comparing a set of figures (from 1998) to another set of figures (1996 and prior) which were collected under different reporting rules. In fact, the two sets of figures are incommensurate. When he says "Election law may be complicated but that does not mean that one cannot easily figure out what is, and what is not, legal" he clearly distorts the truth. How can one "easily" figure out a "complicated" law? Finally, when he says "The contention that campaign finance reform hurts third parties is mystifying" he objectifies his own personal judgment. The contention may mystify Maysmith, but it doesn't puzzle me a bit. I think it's obvious.

Let's consider each of these three distortions in more detail.

1998 was the first election year in which Amendment 15's reporting rules applied. In 1996 and prior years candidates were required to file financial disclosure reports, but political parties faced no such requirement. In previous years, most of the contributions to candidates (by dollar volume) came from political parties and other fictitious persons. In 1998, contribution limits were in place. The parties and other "committees" responded by directing their supporters to make many small contributions directly to candidates, instead of a few large contributions directly to the parties.

While it may perhaps be true that "Far more people contributed ... in 1998", it is certainly true that Maysmith is comparing apples to oranges. There is simply no objectively verifiable basis for his contention.

To say that a "complicated" law can "easily" be figured out is to engage in pure doublespeak. Let us take up the matter of the infamous T-shirts donated to Gail Schoettler's supporters. The T-shirts were not "contributed" directly to Schoettler, but to each of the delegates who was already committed to vote for Gail at the Democrats' state assembly in the spring of 1998. No attempt was made to hide the source of the "contribution" ... the donor in fact filed the paperwork required by CRS 1-45-107 ("Independent Expenditures"). The decision of the administrative law "judge" hinged on an interpretation of Colorado law (CRS 1-45-107(3)), which states that "Expenditures ... that are ... controlled by the candidate ... shall be considered a contribution to the candidate."

At the hearing Schoettler and her benefactor swore that this really was an independent expenditure and that there was no co-ordination or control. Other people, including the "judge," saw it differently. So there is a question of fact to be decided by a jury, and to date no such determination has been made. No trial has been held. The "judge" did not determine that this was a clear-cut violation -- she merely decided that probable cause to refer the case to the Attorney General's office for prosecution does exist. And she offered to let Schoettler off the hook if her campaign would pay a fine equal to 400% of the value of the T-shirts and waive the right of trial by jury.

How does Maysmith know what the truth is when, as a matter of law, the truth in this case has not yet been determined? I'm also interested to hear what he thinks of the latest strategy to damage your political opponent based on this particular case. First, set up an independent organization. Then make a "contribution" in the form of an independent expenditure on behalf of your opponent. Finally, report the whole mess to Common Cause and sit back while they file a complaint which your opponent must answer, and hope he gets sockoed with double or quadruple damages.

Do you honestly expect me to believe that this law is easy to understand? That it serves to make the political process any fairer or less partial than it already is?

Finally, let's consider the statement "The contention that campaign finance reform hurts third parties is mystifying." There's no mystery about it. Some observers do in fact say that campaign finance reform in the form of Amendment 15 damages small political parties. I'm one of them. Here are my reasons.

First, Amendment 15 has already caused more money to be spent on political campaigns in Colorado. In 1998 I saw ads on television for the offices of Secretary of State and State Treasurer. To my knowledge, no one had ever spent money on TV ads in previous races for these offices. And in general, there was much more political advertising in 1998 than Coloradans had previously been forced to bear during mid-term elections. The upshot of all this was that the smaller parties had more trouble making themselves heard.

Second, the small parties are now required to file frequent financial disclosure reports. During 1998 I personally devoted over 120 hours of my own time to these reports, diverting my attention from more important Party business. Smaller parties which can hardly afford to hire professional accountants to prepare the reports for them are placed at a distinct disadvantage by this provision of the law.

Third, the requirement that donors' names be disclosed to the government is a disadvantage to the Libertarian Party in particular, since libertarians generally are jealous of their privacy. During 1998 I more than once found myself in the uncomfortable position of telling Party supporters that I could not legally honor their requests for anonymity. Does Common Cause believe in freedom of speech and freedom of association for everyone? Or only for people who are willing to forfeit the right to privacy?

Finally, the smaller parties draw their financial support from a relatively tiny fraction of the population. Yet they must compete in a big political arena. Media buys are the only effective means of communicating a message to the public at large. Media buys are also very expensive. Under Amendment 15, the smaller parties are now prohibited from accepting large donations from wealthy individuals. Under the old rules, smaller parties had a chance to raise large sums of money from a few donors. The new restrictions definitely impede their fundraising efforts, and also their ability to advertise.

Maysmith may not agree with the arguments I have advanced. But he can hardly be mystified by them.

In short, I think the people who wrote and promoted Amendment 15 had the best intentions and very bad judgment. They failed to envision the many ways in which people would twist and evade this law. And now that events have proven how faulty their reasoning was, they are unwilling to accept the truth. They wish instead to substitute emotion and subjectivism for reason and dispassionate analysis. Maysmith's faulty arguments in support of campaign finance "reform" serve only to prove that this is so.

Absurdities of the Non-Profit Laws

Why The Colorado Freedom Report is For-Profit

by Ari Armstrong

The Constitution says that the government can't abridge the freedom of speech in America. But it sure can tax the heck out of it.The Colorado Freedom Report is a for-profit business, and as its owner I am legally obligated to pay taxes on revenues earned by it. But why should there even be a legal distinction between for-profit and non-profit organizations?

I decided to keep CFR for-profit mainly to avoid the restrictions placed on non-profits. CFR is a political journal in which I want to cover, and evaluate, particular pieces of legislation and particular politicians. Federal law restricts a non-profit organization's right to speak freely on political matters. The main section of relevant law defines a set of organizations which may be classified non-profit as:

US Code 501(C)(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

The 501(C)(3) tax law has pernicious effects on non-profit organizations, which must employ legalistic deception to comply with the law. For instance, Focus on the Family, the conservative Christian group in Colorado Springs recently accused of violating the rules for non-profits, is required to say things along the lines of, "Candidate X is a terrible, horrible person, but we're not suggesting you vote one way or another in the election." That a Christian organization rides a lie through a legal loophole is an ironic but natural consequence of US social engineering.

Other examples abound. The Independence Institute of Golden regularly puts out op/eds critical of big government, but it always includes a disclaimer saying that the work is not meant to influence particular laws or elections. Such practices encourage compartmentalized thinking. Does it really make any sense to hold a strictly negative view of a political candidate, but then not let that view influence one's vote?

I assure the reader that when I, writing for The Colorado Freedom Report, say that a particular candidate or law is inimical to liberty, I mean that you should darn well vote against that person or law. I'm not going to play the ridiculous con game inherent in non-profit status.

One possible reform would be simply to forbid all non-profits from dealing with politics in any way. However, this would bar nearly every organization from non-profit status. Politics is not an isolated event separated from the general culture. Every element of culture may be affected by politics, and vice versa; thus, nearly all organizations will frequently make implicit or explicit policy recommendations. (There are other types of "non-profits" that can advocate policies, but these groups don't get nearly the tax benefits of the 501(C)(3) groups, so I'll leave discussion of them aside.)

Another option would allow educational groups to discuss politics openly. But this raises fundamental issues of fairness. Why should the tax code penalize a manufacturing business more than a journal of political advocacy? I don't think it should penalize either one. I favor a radical proposal: eliminate the legal distinction between for-profits and non-profits.

A computer chip manufacturer exists to serve human needs as much as a charitable organization does. Both groups have "customers," people who pay for particular goods or services. The State should stop its social engineering, its encouragement of some activities over others. So long as the income tax exists, it should at least disallow deductions and unbalanced taxation.

The only possible justification for using the tax code to penalize some activities less than others is the "free rider problem." That is, with many charities, society as a whole benefits from the contributions of a few. For instance, a well-run charity might help the homeless find jobs and accommodations, which would benefit everyone even though not everyone paid. To help overcome the free rider problem, in which people are tempted to reap the benefits without paying for them, the tax code can lesson the pain of charitable giving.

However, the free rider argument faces a fundamental problem: who decides what is beneficial to society and what isn't? Objectivists will argue that Christianity is destructive; loggers will argue that much environmentalism is destructive; most of us will argue that neo-nazi groups are destructive. If the tax law is going to favor some charitable causes, it shouldn't discriminate against others, even (or especially) those involved with political advocacy.

But why stop there? Many businesses provide benefits to society as a whole. Microsoft, by creating a widely used computer standard, has contributed to a general increase in productivity for which it has not been wholly compensated by its customers. Perhaps there should be a Microsoft tax deduction. Many for-profit businesses provide more to free riders than some non-profits provide. Sorting this mess out is practically impossible, ensuring that any discriminatory tax will be unfair.

By the way, an organization's status as "non-profit" or "for-profit" is no indication of how much profit the group actually makes. Non-profits, which in many cases serve no obvious charitable function, frequently make huge amounts of money, much of which goes to pay high salaries and otherwise dodge the supposed restrictions of the 501(C)(3) code. Many for-profits, on the other hand, such as CFR, barely scrape by financially. (This journal probably never will be a big money maker and is largely charitable in its function.) The common distinction, then, is misleading at best. A better categorization would be, "taxed" and "non-taxed."

To be sure, taxes should not penalize the operation of charitable and educational organizations. But neither should they penalize the operation of any business. The answer is not to pass discriminatory taxes that harm some groups more than others, but simply to repeal the taxes altogether.

Note: Everything in this publication is intended to aid or hinder the passage of legislation before the Federal Congress and the Colorado legislature.

Senate Committee Passes Pro-Property Bill

by Carol Geltemeyer, February 1999

Over 60 citizens from El Paso County crowded the Senate Local Government Committee hearing room on Tuesday, February 2 in support of Senate Bill 91, entitled County Land Use Regulation Resolution. The bill would allow local citizens to vote on county issues affecting their property rights. Most of the supporters came up to Denver in a bus rented by Citizens for Property Rights (CPR), a group dedicated to preserving our ever-dwindling property rights.

A group of around eight people stand on the steps of the Colorado capitol holding signs and a flag.

(Photo: Shown on the steps of the State Capitol from left to right are Daniel Raygor, Larry Carlson, Terry Holt, Greg Tyner, and Craig Raygor. Tyner, shown holding a folded American flag, walked from Colorado Springs to Denver in demonstration against the zoning threat. He presented the flag to the Senate Committee on Local Government February 2.)

Many folks served as witnesses in support of the bill and gave eloquent, sometimes heart-wrenching testimonies of how they tried to resolve issues at the county level, but failed at each step of the process because of intransigent (some say corrupt) county commissioners.

The committee consists of four Republicans and three Democrats, so at first many people figured the bill would pass on party lines. But when the roll call was issued on the vote, and the first Republican voted "no" (Senator Norma Anderson of Lakewood), a minor panic set in among the audience. But in the end, a Democrat, Senator Frank Wettig of Aurora, voted for the bill, contributing to a 4-3 victory. Interestingly, Wettig asked the most questions, and many supporters of the bill felt he was surely going to vote against it. Perhaps he changed his mind when El Paso County Commissioner Duncan Bremer suggested the pro-zoning commissioners may have their own agenda on the zoning issue. Bremer also expressed concern over the rapid pace the Commission has been pushing for new zoning rules. According to Bremer, SB 91 can provide a needed safety net or safety valve when other government processes don't work.

Senate Bill 91 is now on its way to the Senate Floor for discussion and a vote.

Please call your State Senators and ask for their support on this important protection of property rights. You might mention the "safety vale" analogy, with which people seem to connect. The Senate's toll-free number is (888) 473-8136. Or, you can click to the Denver Post's listing of Senators.

For more information, contact Carolyn Myers at [omitted].

The Freedom to Dream And the Costs of Zoning Laws

by Rico Hill

Hill presented the following speech as testimony in favor of Senate Bill 99-091 for the Local Government Committee on Tuesday, February 2. That bill would limit the ability of El Paso County Commissioners to zone parts of the unincorporated county. It passed out of committee with a 4-3 vote. Hill's speech is followed by a brief biographical sketch and his reflections on the history of zoning laws in America.

Good Afternoon, Ladies and Gentlemen of the Committee. My name is Rico Hill. I am a rancher from Yoder, Colorado. I appreciate the opportunity to address you today.

Not long ago, I attended a ceremony in memory of Martin Luther King, Jr. The theme of that ceremony was "Keep the Dream Alive." You, ladies and gentlemen, will also have that opportunity today. You will have the opportunity to keep the dream alive for thousands of people who want the right of self-determination. We simply want the opportunity to vote on regulations that have the power to affect our lives and the lives of our children forever.

Most Americans are familiar with the expression, "Taxation without representation." That principle is unfair, unacceptable, and un-American. We believe that Regulation without Representation is also unfair, unacceptable, and un-American. Powerful officials who are not elected by us, who do not live in our district, and who do not value our rural culture and lifestyle, would inflict excessive regulation upon us. Senate Bill 91 will protect citizens from regulation without representation and permit citizens to vote on an issue that will profoundly impact their way of life.

We the people believe that when county government fails to fairly serve the citizens, citizens must look to the state to remedy that injustice. Martin Luther King, Jr. did not think about himself and what his legacy would be, but he was constantly concerned about a legacy of freedom for his children, and all children, for all time. Some of us do not have wealth and riches today but we have a dream of what we can be tomorrow!

Some of the decisions you make up here at the capitol can be difficult. This one need not be. We look to you to help us preserve our way of life. Your support of Senate Bill 91 will allow us to vote on our future. Please stand with the struggling middle class and the working poor. Voting is the American way.

Thank you for your time, Ladies and Gentlemen.

Who is Rico Orlando Hill?

I was born and raised in Richmond, VA. I migrated to Colorado via the military in 1985 and retired from the Army June 30, 1997. Currently I reside in Yoder. I breed, train and sell Paint horses for performance classes and raise cattle and other livestock. My occupation is Satellite Communications Systems Operations and Maintenance Engineer.

American Zoning Laws

El Paso County's history is not unlike our own country's history, in which people have struggled to purchase plots of land. Today, many residents of El Paso live in a trailer until they can build their own home. Some families can make the transition in three to five years, longer for others, but that is the way we can achieve the American dream.

So where did the zoning ordinances come from? The first recorded incidence of zoning occurred in the early 1800s. Citizens in San Francisco wanted to keep the Chinese immigrants in their "own" part of town, so Chinatown was started with zoning. Later, zoning was practiced in the boroughs of New York City. That's how we developed neighborhoods exclusively Irish, Polish, Jewish, and so forth.

Today's version of zoning discrimination is more subtle. It is now used as economic segregation. Ergo good/bad neighborhoods, communities of the advantaged separated from those more modestly housed, etc. The face of discrimination may change but its effect is the same, separation of people and classes. Some may think that zoning is the "natural order" of things. Really?

You are invited to take a refreshing drive in the country. We are all neighbors "out here" in the truest sense of that word. There will always be those among us who have more and those who have less. We all work and live together and don't seem to have a problem with our neighbors. We don't have poor neighborhoods and crime like our city friends who are zoned (that is, not yet!).

Zoning can and frequently does regulate affordable housing out of rural counties to make way for expensive developments. You may hear arguments here today about the living conditions of poor people. When you hear those stories, ask to see pictures. Try to obtain addresses. These people cannot document what they say. Ask the ultimate question. "Would these so called poor people be better off living under a bridge in town?" "Would they be better off in a government subsidized housing ghetto?" The answer is, we may not have much, but we have our freedom and a dream of what we can be tomorrow!

A Hippocratic Oath for Legislators?

by Sandra Davies Johnson

"I SWEAR I will abstain from whatever is deleterious and mischievous..."
-- Hippocrates's Oath for Doctors

Socialism is the antithesis of freedom and prosperity. The more socialism spreads, the more taxes we pay, the more government invades our rights and liberties, the less freedom and wealth we have.

Socialism has proven itself a disastrous failure during the past century. Under socialism people have suffered great harm, in many cases dying for lack of basic goods. Millions have been murdered by their socialist governments. We know socialism doesn't work.

Our politicians talk about fixing poor quality socialized schools, and expanding inferior socialized medicine, and saving a socialized retirement debacle.Why do they pursue these goals, when we know socialism doesn't work?

Have you ever heard of "bad" private schools or "bad" private doctors or "bad" private retirement plans? They have existed, but only very briefly, because they go out of business when they don't please their customers! So, only the better ones are left.

Under socialism, the government makes all the decisions about prices, wages, interest rates, and production and distribution of goods, resulting in economic disaster. In a so-called "mixed economy" there is some intervention by government, resulting in a hampered economy. The more intervention, the less prosperity. This could be called "socialism lite". In a free market economy the customers determine the decisions a business makes, resulting in maximum prosperity.

Imagine a world in which each legislator took an oath to "do no harm." Before voting for any bill, legislators would search deep in their souls, and deep into the evidence, for answers to these questions:

Is it ever right for me to steal from my neighbor -- even for what I think is a "good cause?"

Is it ever right for me to join a group to steal from my neighbor -- even for what we think is a "good cause?"

Is it ever right for my group to hire someone to steal from my neighbor -- even for what we think is a "good cause?"

Government operates by forcibly taking money from some and giving it to a supposedly "good cause."

But is it ever right?

Sandra Johnson was the 1998 Libertarian Party candidate for governor of Colorado.

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