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The strange story of Colorado’s moonlighting executive-level elected officials continues. Treasurer Walker Stapleton, as we discussed back in January, has continued to perform work for–and draw a salary considerably larger than his pay from the state–from California-based SonomaWest Holdings, a real estate company. Stapleton’s side job didn’t raise eyebrows to the extent that Secretary of State Scott Gessler’s aborted plan to keep working for his election-related law firm did, mostly because SonomaWest was a public company with reporting requirements, uninvolved in anything political, and had no business in the state of Colorado.
The biggest problem with Gessler’s arrangement was a lack of accountability, or any way for the public to verify what he would have been doing in this side job. But as the Colorado Independent’s John Tomasic reported yesterday, at least some of the transparency that made Stapleton’s deal less controversial may be about to disappear:
Weeks after Colorado Treasurer Walker Stapleton took office this past January he drew a flurry of questions about a lucrative consulting contract he made with SonomaWest Holdings, the Northern California real-estate firm he headed for years as CEO. Stapleton arranged to work for up to 250 hours per year with Sonoma for $150,000 while acting as Colorado’s treasurer. Colorado AOL reporter Sandra Fish discovered the arrangement by looking at paperwork SonomaWest had to file as a public company, and government watchdogs took comfort from the fact that those public records filed with the Securities and Exchange Commission or SEC would continue to provide some level of transparency. Now Stapleton’s family finance business, Denver-based Stapleton Acquisitions Company, is proposing to buy out shareholders of SonomaWest (pdf) and take the company private. That would mean no more filing with the SEC. It would mean no more public records from which to monitor Stapleton’s moonlighting as a consultant.
“There are a lot of [business] reasons to take a company private,” University of Denver Finance Professor Mac Clouse told the Colorado Independent. “For one thing, you gain 100 percent control. You can take the company in the direction you want to go without having to wrestle with a single cantankerous board member. You would no longer have to appoint the kind of board that government regulations insist upon. The other main reason is that you no longer have to do all the public reporting. You don’t have to pay the high accounting costs that come with preparing statements.”
…Colorado Ethics Watch Director Luis Toro said his group is very interested in the proposed deal. He said state financial disclosure forms only ask officeholders to list their “sources” of income, along with assets, real estate, debts, board positions and lobbying income. Toro said that some office holders might volunteer more information, like the amount of hours they’re working outside the office, but that kind of detail is presently not required.
“The only way the public found out about Stapleton’s moonlighting was that it was disclosed by SonomaWest to the SEC as required by federal securities law,” Toro told the Independent. “If the business is taken private, even this back-door form of transparency will be gone. That’s a concern because the proposed consulting agreement that was disclosed could potentially take up a huge portion of the state Treasurer’s time.”
A poll follows–without legislation to place this recent “moonlighting” fad under oversight, the only question we can really ask is, does this make you trust Stapleton more, or less?