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How the Boulder Economic Council is tied to the Chamber of Commerce A search of the Colorado Secretary of State’s database for the BEC came up with one document, which has “Boulder Economic Council” as a trademark of The Boulder Chamber of Commerce, registered 6/12/2006. At least since the end of 2005 according to City records, the BEC has been using the same taxpayer identification number as the Chamber of Commerce. Here are the relevent invoices. (PDF) A review of the requirements for registering in Colorado (PDF), also on the SOS web site, appears to indicate that any business entity not using the registrant’s personal name must register. It seems, then, that the BEC has no existence other than as an arm of the Chamber of Commerce. The Chamber itself may be in violation of the City Code. And at least so far, the Chamber has not asked for its own donation back. Conflicts of Interest?  A look at the BEC web site is also revealing. Rather than simply promoting Boulder business recruitment and retention in general, as it alleges is its purpose, the BEC also promotes the specific interests of those who contributed to it. Check out the Commercial Broker's page, for example. (For reference here's the way it appeared on 10/29/2006 (PDF).  The only 4 commercial real estate organizations listed on this page are “members” of the BEC, whereas the Boulder phone book lists 50-60 commercial real estate entities. Should the City really want to be a part of an organization that is as self-serving as this? The City is not the only governmental entity that is a “member”. The University of Colorado and the Boulder Downtown Improvement District are also members. This may raise serious issues with the state Fair Campaign Practices Act. The BEC advertises their membership on this page.   Again, here's the way the page appeared on 10/29/2006. (PDF)

A few weeks ago the Daily Camera headlined a story that the Boulder Economic Council possibly violated the City's election laws in donating to the No on 2A group while at the same time being a city contractor. Now it appears that the BEC has no separate existence from the Boulder Chamber of Commerce, which also donated to the No on 2A group, and therefore may have violated the same law.

According to one source, the City Attorney will make a public announcement about his course of action on Monday, October 30th, possibly at the special City Council meeting that night.

The City, the University of Colorado and the Downtown Boulder Improvement District are all members of the BEC, which puts them at risk of violations of the state Fair Campaign Practices Act, which strictly limits expenditures by governmental entities on political campaigns.

In addition, the City’s campaign laws forbid pass through donations, which arguably occurred with the BEC, as well as knowingly accepting such donations, which may have occurred with the No on 2A group, as the some of people running the No on 2A campaign are members of the BEC.

At first the BEC denied that there was a problem, but they ended up asking for their $10,000 donation back. Here are the Daily Camera stories on this matter. The first article was on October 12, the next on the 13th, and the last on the 17th, all front page.

The Agreement between the City and the BEC 

The Letter of Agreement between the City and the BEC has the BEC and its Director acting as essentially an agency of the City, almost like a department or part of the City Manager’s Office. But this relationship is fundamentally unworkable, simply because the BEC director then has to serve two masters - one, the City Manager, and two, the other nearly 30 members of the BEC - and they clearly don't have the same interests.

The Agreement states that, "The BEC through its existing Director is...an independent contractor to the City", and "The BEC through its existing Director, as an independent contractor consulting to the city, is subject to the city's Code of Conduct for conflicts of interest...". So the relationship as contractor and the potential for conflict is clear.
 
Interestingly, the document also recognizes the potential for disagreement, although the solution is completely ridiculous -- the Director may remove himself from the project, or the City can cancel the contract without cause on 30 days notice. This is ridiculous simply because no contract can deal with the ongoing and very basic conflict between the role of the City as servant to its citizens, and the private interests of the other BEC members.

Resolving the potential campaign law violation issues

Ultimately, the City Council should force the City Manager and City Attorney to address the questions all of this raises:

1. Who was the City actually paying when it made its $5,000 dues payment for membership in the “BEC” in December, 2005? If the BEC had no legal existence registered with the State of Colorado at that time, how did it open a checking account to put the money in? Or were the checks endorsed to the Chamber? Was the BEC in violation of state law at the time for failing to register with the State?
2. Who was the City actually paying when it made its “retainer” payments of $5,500/month to the BEC?
3. Who did City Manager Frank Bruno contract with when he signed the Letter of Agreement in November, 2005? Was it with the Chamber, who presumably was the entity cutting the checks to Sean Maher, the director of the BEC, for his work? And if it wasn’t the Chamber, who was it? As Deep Throat said, “Follow the money”.
4. What did Frank Bruno know, and when did he know it? And if he wasn’t aware of this situation, why not? Isn’t that his job to know with whom he is signing a contract?
5. Why did the contract reference a “flat monthly retainer of $5,500” anyway? Shouldn’t it have been for performance on the 11 particular items in the Letter of Agreement?
6. Was the City actually monitoring the performance of Sean Maher/BEC under the Letter of Agreement? If so, are there records of such monitoring, or was no one tracking whether the City was getting what it paid for when it was supposed to get it?
7. As of 6/12/2006, per the SOS web site, the BEC was a trademark of the Chamber of Commerce. Does that mean that the Agreement was with the Chamber after that point, if not before? And if so, isn’t the Chamber in violation of the Boulder Revised Code 13-3-3, as the legal contractor with the City, both for the $10,000 from BEC and for their own donation?
8. If BEC “members” were donating to the No on 2A group through the BEC, which apparently was the Chamber, isn’t the BEC in violation of BRC 13-3-4 also, which forbids making pass-through donations? And since Susan Graf, the head of the Chamber, is on the committee running the NO on 2A campaign, isn’t that group also in violation of 13-3-4 for knowingly receiving pass-through donations?

Fixing the City/BEC Situation 

The City needs to make a clear distinction between people and companies it hires to do work for the City, and organizations that it may have arms length relationships with but are involved with City issues and have political agendas that they want to pursue. But apparently the City Manager doesn’t see things that way, as he was the one who signed the contract.

Confusing the two, as happened with BEC, leads to a mess, with the result that the City Manager’s own role becomes conflicted. How can the City be a BEC voting member and the City Manager represent the City at the meetings where votes are taken, and yet claim he is only at the meeting to answer questions, as he has done? The best way out is to cancel the contract, and hire someone else to do the work who doesn't report to two masters.