Campaign finance reform, once billed as a way to mitigate the effect of big money in politics, is having its greatest impact in turning well-intentioned grassroots candidates and campaigns into lawbreakers.

A recent national survey [1] conducted by University of Missouri economics professor Jeffrey Milyo finds extremely troubling trends. According to Milyo, just 41 percent of participants in his national experiment could correctly complete all required campaign finance disclosure forms.

In his analysis, co-authored with the Institute for Justice, a public interest law firm, and titled "Campaign Finance Red Tape: Strangling Free Speech & Political Debate," Milyo asked participants to register a hypothetical citizens' group as a "political committee" and report its contributions and expenditures as such.

The picture, according to Milyo, is especially confusing in Colorado, where in 2002, well-intentioned voters overwhelmingly passed Amendment 27, known as the "Fair Campaign Practices Act." As history would demonstrate, the amendment's provisions have been anything but fair.

While much has been written about the questionable specifics of Amendment 27 — namely that unions can use compulsory member dues to fund candidates while corporations cannot donate a single dollar — there has been little focus on the sheer difficulty grassroots campaigns have in correctly identifying contributions and sources.

According to Milyo, just six percent of experiment participants from Colorado could correctly "report an in-kind donation of t-shirts" on the state's required disclosure forms. To make matters worse, there is little guidance for those who cannot afford a top-notch election attorney.

Instead, most campaigns must resort to the Secretary of State's 81-page manual [2], an incredibly confusing document that can easily send even the most studious campaign treasurer astray.

This is exactly what started a major mess for Nick Kliebenstein, a young Republican upstart from Broomfield who is taking on incumbent state Rep. Diane Primavara for her seat in this November's election.

Just days after he filed his first campaign finance report last fall, the Broomfield Enterprise ran a story with the headline "HD33 candidate target of campaign finance complaint." [3]

Chantell Taylor, a Democrat attorney for the liberal outfit Colorado Ethics Watch, had filed a complaint with the Secretary of State alleging that Kliebenstein's campaign had failed to correctly report contributions.

As it turns out, Kliebenstein's treasurer, a family friend and professional bookkeeper, had attempted to correct a minor reporting mistake on the Secretary of State's Web site. Due to technical problems with the site, however, the corrections — made in full compliance with mandated reporting deadlines — were not publicly posted until after Taylor sent her press release out to newspapers.

While the Secretary of State sent an apologetic letter to Kliebenstein and the Enterprise subsequently printed a brief noting that Taylor was forced to withdraw her complaint, the damage was done. Out of the gate, Kliebenstein was wrongfully portrayed as a law breaker.

Four months after Taylor was forced to withdraw her complaint, the press release announcing her allegations is still posted on Ethics Watch's Web site [4].

While she continues to concoct questionable complaints against other candidates, another activist is now being forced to pay up after initiating a frivolous complaint against a Republican campaign committee.

Last month, the Colorado Court of Appeals ruled that Democratic activist Aaron Fink must pay attorney's fees for filing an erroneous campaign finance complaint against a Republican political coalition, in which he falsely alleged that the 527 committee had violated state prohibitions on corporate contributions.

The allegations, the court ruled, were baseless, with justices admonishing Fink for filing the complaint. Fortunately for Fink—and unfortunately for those seeking sanity in politics—the decision garnered little notice or mention in the media or the state's political circles.

The net result is that plaintiffs seeking relief from similarly baseless complaints in the future will likely have to resort to costly litigation that may take years to resolve. In Fink's case, it took the Court of Appeals a full 16 months after he first launched his attack to rule against him.

[4]Jessica Peck Corry is a public policy analyst with the Independence Institute in Golden, Colo.

Scott Gessler, a Denver attorney well known as one of the state's leading campaign finance law experts, represented the Republican group in the case. "The worst part about all of this is that Fink, before the Republican group even made a public communication, was able to portray Republicans in a terrible light just weeks before the 2006 election," he said. "Even though he is forced to pay up now, Republicans still suffered politically as a result."

Additional legislation also promises more lawsuits in the years to come. House Bill 06-1074, championed by Rep. Morgan Carroll, D-Aurora, requires any group that registers with the IRS as a 527 committee to report contributions or spending that "influences" the election. Great idea on the surface, but just what does "influencing" mean and who decides? The Supreme Court has previously held that such language is unconstitutionally vague but that doesn't stop our legislature.

Complicating the situation further is that unlike federal tax laws, Colorado's campaign finance provisions contain no minimum threshold, meaning that even a neighborhood coalition of five or six people attempting to "influence" an election now have to report. Justifiably unaware of the new mandate, they could become the target for costly politically-motivated complaints.

Money will always find a way into politics. This year's batch of local, state, and federal candidates are already spending more money than ever before. Sadly, our campaign finance laws are being turned into tools for vicious political slander that must be stopped. Never before have voters been taken for such an ugly ride.

Editor’s note: Jessica Peck Corry's weekly blogs are part of a feature on PoliticsWest called "Diary of a Mad Voter." The group blog, published in partnership with NewWest.Net/Politics [5], is intended to give a glimpse into the hearts and minds of several independent-minded voters and thinkers in the Rocky Mountain West in the 2008 election year.