Colorado Initiative 74 (2008)

Not on Ballot
This measure was not put on an election ballot

The Criminal Liability of Executives Initiative, or Initiative 74, would have made business executives criminally responsible for violations of law by their companies. It was certified for the ballot as Amendment 53, but the sponsors struck a deal to withdraw the measure on Oct. 2, 2008, in exchange for business leaders joining forces with them to oppose Amendment 47 (the Right to Work Amendment) and two other measures they labelled as "anti-union" (Amendment 49 and Amendment 54).

The measure was a citizen-initiated state statute.

The official ballot title for the initiative read:

An amendment to the Colorado Revised Statutes extending the criminal liability of a business entity to its executive officials for the entity's failure to perform a specific duty imposed by law, and, in connection therewith, conditioning an executive official’s liability upon his or her knowledge of the duty imposed by law and of the business entity’s failure to perform such duty; and allowing an executive official who discloses to the attorney general all facts known to the official concerning a business's criminal conduct to use that disclosure as an affirmative defense to criminal charges.

Details of the initiative

The proposed initiative, if approved, would have:

• Provided criminal liability for an executive official for failure to discharge a specific duty imposed on the business entity by law when the executive official knew or should have known of the specific duty to be performed.

• Recognized a valid defense to certain criminal charges if the executive official, prior to being charged, reports all relevant known facts concerning the conduct of the business entity to the attorney general.

• Awarded any damages resulting from the civil action to the governmental entity that imposed by law the duty to be performed by the business entity, and to make those moneys exempt from all revenue and spending limitations provided by law.

Supporters

Leading the charge for this measure was Protect Colorado's Future, a coalition of advocacy groups.

Protect Colorado's Future had raised more than $1.5 million by the beginning of May 2008 to support its ballot measures and to oppose the Right to Work Initiative. The biggest single contribution, $500,000, came from the Service Employees International Union. A Teamsters local contributed $250,000.

A spokesman for the effort was Lew Ellingson, a former employee at Qwest Communications International—a company hit hard by an insider trading scandal. The plight of Qwest, based in Denver, was a motivation for the proposal, according to Jess Knox, executive director of Protect Colorado’s Future.

Ellington said the proposal would assign top business officers unprecedented individual accountability. "If nothing else, these folks in charge of the corporations and companies will think twice about cutting corners to make themselves look more profitable than they really are," he said.

"I don’t know who can oppose this. This is common sense," Ellington said. "We need businesses to survive, but we don't need criminals running them."

Protect Colorado's Future also offered three other slightly different versions of the proposal, in Initiative 57, Initiative 73, and Initiative 75.

Opponents

The initiative brought strong opposition in the business community. The Chamber of Commerce filed a lawsuit April 2, 2008, to challenge the initiative, according to Doug Friednash, a lawyer for the chamber. He said the language could mislead voters into thinking they were supporting a measure that simply cracked down on crooked executives, as opposed to one that left business owners and other employees open to lawsuits.

The Colorado Association of Commerce and Industry (CACI) also came out in opposition to the measure. In explaining their opposition to this measure and five others, CACI warned that "the political balance in the state is in danger of being tipped in favor of unions, which will be detrimental to the state's economic future."

The Denver Metro Chamber of Commerce launched a group called Coloradans for Responsible Reform, which raised money from business interests to oppose this initiative as well as numerous other initiatives that they saw as anti-business.

The National Federation of Independent Business of Colorado announced May 1, 2008, that it had joined Coloradans for Responsible Reform in the effort.

The board of the Colorado Women's Chamber of Commerce voted unanimously July 7, 2008, to oppose this measure—as well as several other ballot initiatives backed by organized labor (Initiatives 73, 75, 76, and 92). Donna Evans, CEO of the chamber, said the initiatives, if passed, "would damage business, especially small- and medium-sized business."

The Colorado Economic Leadership Coalition came out Aug. 11, 2008, against the proposed amendment, as well as several other labor-backed counter-measures and the Right to Work Initiative. The coalition, which was the public policy arm of the Economic Development Council of Colorado, said they believed the amendments would make it hard to recruit businesses to Colorado and that they threatened to destabilize 66 years of business-labor peace in the state.

"These initiatives are economy-killers and will lead to increased prices, unemployment and legal paralysis," the coalition said in a presentation to members. "The 22 economic development corporations across the state can simply close up shop. No business is moving to Colorado if these measures pass."

Club 20, which represents the interests of western Colorado's 22-county region, announced its opposition to the measure in mid-September 2008.

Business leaders join unions

Just hours before the Oct. 2, 2008, deadline for withdrawing measures from the November ballot, labor union leaders announced that they would be pulling four controversial measures from the ballot in exchange for business leaders signing on as active opponents of Amendment 47, including $3 million to help fund the opposition campaign.

Attempts to strike a deal, led by Gov. Ritter, began early in the campaign but fizzled when Amendment 47 proponents refused to end their campaign and filed signatures to place it on the ballot. However, in mid-September, union and business leaders showed renewed interest in negotiating a deal to avoid the clash at the ballot-box.

Colorado Concern, a new alliance, was a key player in the talks about the terms under which labor groups would pull their four measures if business leaders helped them fight Amendment 47 and two other measures they saw as anti-union. Present at the negotiations for Colorado Concern were Walter Isenberg of Sage Hospitality Resources, Denver Performing Arts Center Chairman Dan Ritchie, and Oakwood Homes' Patrick Hamill.

Talks broke off without a deal on Sept. 16, 2008, at the governor's mansion. But they resumed later in the week.

Denver Metro Chamber of Commerce President Joe Blake attended the two meetings in mid-September and sits on the Colorado Concern board. But he said then that the Chamber would not spend any of its own resources to fight the three measures opposed by organized labor.

In an address Sept. 17, 2008, at the chamber's annual membership lunch, Blake steered clear of talk about a compromise, instead calling on the audience to defeat the four proposals sought by unions. Blake later expressed pessimism that a compromise could be reached that would lead to the withdrawal of the measures.

A source from Colorado Concern said Sept. 24, 2008, that they had pledges of $2 million from business interests toward the $6 million the union leaders said was necessary to convince them to withdraw the four anti-business ballot measures. That money would be used in the campaign to defeat Amendment 47 and two other measures the unions saw as anti-union. Amendment 47 supporters said they had no intention of dropping their proposal.

Denver Metro Chamber President Joe Blake asked companies that contributed to the chamber's issue committee, which was formed to oppose the labor-backed measures, to shift their money to fight the pro-business measures.

Tim Jackson, president of the Colorado Automobile Dealers Association and executive vice president of the Metro Denver Automobile Dealers Association, told Blake his members would not finance the fight against Amendment 47. "Although it's not finalized yet, my belief is that we would not allow our money to be forwarded to a campaign that would be opposed to what we would call the pro-business ballot measures," Jackson said.

The metro Denver auto group had given $500,000 to the chamber's issue committee, while the state auto group had contributed $100,000 to the Amendment 47 right-to-work campaign.

Coloradans for Responsible Reform said Sept. 26, 2008, that it would proceed with TV commercials opposing the union-backed measures (Amendments 53, 55, 56, and 57), since a deal for their withdrawal was not yet at hand. The campaign suspended the ads two weeks previous while business and union leaders worked on a deal.

Todd Vitale, manager for Coloradans for Responsible Reform, said fundraising efforts slowed down during the negotiations.

"Our research indicates that once voters learn about the real impact of these measures, they will vote them down," Vitale said.

Vitale said his campaign had raised $1.6 million, compared to more than $6 million raised by organized labor to fight Amendment 47 and support the measures they are sponsoring.

On Sept. 30, 2008, Walter Isenberg, chairman of Colorado Concern, announced that a deal between labor and a coalition of business leaders to pull four union-backed initiatives had fallen through.

"A lot of progress was made over the last few weeks," Isenberg said in a released statement. "Unfortunately, we were unable to come up with a proposal to which union leaders would agree, and we have simply run out of time."

The statement said there would be "no deal" with labor leaders, and business leaders would instead focus their financial resources on fighting the four union-backed ballot measures.

But Jess Knox, a spokesman for Protect Colorado's Future, said that there was "still time on the clock" and that a deal could still be worked out, noting that they "still have two days to pull this off."

The group of business leaders reportedly raised $3 million to oppose Amendment 47, short of the $5 million union officials reportedly wanted businesses to raise to fight Amendment 47. But Knox insisted the effort was not "just about money."

"This is about running a joint campaign, and there are some complex details," Knox said.

The deal was finally worked out during late-night meetings and announced Oct. 2, 2008, the deadline for removing measures from the ballot. Because the ballots were already being printed, the measures still appeared there, but no votes for the measures were counted.

After business leaders pledged to raise $3 million for the campaigns against Amendments 47, 49, and 54, campaign finance records show donations were received from the Colorado Bankers Association ($215,000), Western Plains Capital ($200,000), ProLogis ($100,000), Vail Resorts ($100,000), 4334 LLC ($100,000), Xcel Energy ($75,000), and Wal-Mart ($50,000).

Those donations were made to Colorado Businesses for Sensible Solutions, an issue committee formed to fight Amendments 47, 49, and 54. The contributions are still nearly $2 million short of the amount pledged by Oct. 10th, but Walter Isenberg, the lead fundraiser, said businesses would "continue to fundraise until we have met our commitment."

Status

The measure was certified for the ballot Aug. 18, 2008, as Amendment 53. Supporters filed nearly 124,000 signatures with the Secretary of State's office on July 29, 2008. To earn a place on the ballot, 76,047 valid signatures were required. The measure did not make the ballot.

The measure survived a challenge from the Denver Metro Chamber of Commerce, which appealed the language of the initiative before the Title Board, arguing that the initiatives did not constitute single subjects and would hurt Colorado businesses. The Title Board upheld its earlier title-setting.

See also

• Procedures for qualifying an initiative in Colorado
• Laws governing the initiative process in Colorado
• Campaign finance requirements for Colorado ballot measures
• Colorado 2008 ballot measures
• Petition drive deadlines in 2008
• Colorado signature requirements

External links

• Full text of the initiative
• 2008 State Ballot Information Booklet, English version (Blue Book)
• 2008 State Ballot Information Booklet, Spanish version (Blue Book)
• Protect Colorado's Future web site
• Denver Metro Chamber of Commerce web site
• Colorado Association of Commerce and Industry web site