Three of the state’s heaviest GOP hitters have formed a committee to help their party retain the governor’s office and the 7th Congressional District next year.
Gov. Bill Owens, brewery executive Pete Coors and former state Republican Party chair Bruce Benson have formed the political alliance – known as Headwaters Group LLC – which also is expected to aid the GOP in its quest to take back the statehouse in 2006.
The potentially powerful fundraising coalition shows the high stakes of next year’s elections, which are anticipated to be bruising and expensive.
It is also one of the first concrete signs that Republicans learned the importance of such committees after the Democrats – who effectively used them last year – won the majority in the state legislature.
“If one party develops an effective method, the other party does the same,” said Bob Loevy, political science professor at Colorado College.
Coors contributed the committee’s current balance of $50,000 when the group was formed in May, according to Internal Revenue Service records.
Alan Philps, former Colorado Republican Party director, who served as Florida Gov. Jeb Bush’s policy chief, is expected to take over day-to-day operations, sources said.
A loophole in campaign finance laws spawned Headwaters and other so-called 527 groups – named after the applicable section of the tax code – that can raise and spend soft money.
In 2002, Congress banned “soft money” contributions to national political parties, but the loophole allows 527 committees to claim tax-exempt status as a political organization and at the same time avoid regulation under state or federal election law.
It makes tracking where the money comes from difficult.
While candidate campaigns are legally prohibited from having contact with the 527 groups, they often get political advantages from their actions.
“It’s a way for political parties and supporters to get around the law to their benefit,” Loevy said.
For instance, in the 2004 presidential election, Swift Boat Veterans and Moveon.org were two of the most visible 527 groups, inflicting political damage on both candidates. Their massive advertising campaigns also reflected another problem with 527 groups.
“The effect is to shift control of the campaigns from candidates to 527 organizations,” Loevy said.
Colorado Democrats used the loophole last year, with four wealthy Democrats – Quark founder Tim Gill, billionaire Pat Stryker, state Board of Education member Jared Polis and software entrepreneur Rutt Bridges – funneling millions to independent groups.
The maneuver is largely credited with giving Democrats control of the statehouse for the first time in more than 44 years.
Owens, through his spokesman, said he is not yet involved in fundraising or any other activity concerning the Headwaters Group and doesn’t intend to be until next year.
“He will focus on next year’s elections next year,” said Owens spokesman Dan Hopkins.
Coors and Benson could not be reached for comment.
Loevy said it was not unusual for a sitting governor to be part of a 527 group. For instance, he said, members of Congress often run leadership political action committees and other groups dedicated to getting party members elected.
With both an open gubernatorial seat and congressional seat, as well as a slate of state House and Senate contests, next year’s elections are expected to be hard-fought and costly.
Republican Rep. Bob Beauprez, who is running for governor in 2006, currently holds the 7th District seat. Beauprez narrowly won that seat three years ago in race that cost him and his opponent $2.5 million.
In the 1998 governor’s race between Owens and Democrat Gail Schoettler, the candidates spent a total of more than $3 million.
Staff writer Chris Frates contributed to this report.
Staff writer Karen Crummy can be reached at 303 820-1594 or kcrummy@denverpost.com.
