Stapleton Admits Forgetting to Disclose His Wife’s $30K Income, As Required by Colorado Law

(Promoted by Colorado Pols)

Walker Stapleton.

Over a month ago, the Colorado Times Recorder first reported that Walker Stapleton appeared to have left Jenna Stapleton’s $30,000 salary off his personal financial disclosure (PFD) form, even though candidates like Stapleton are required by law to disclose any income generated by their “spouse.”

Stapleton didn’t respond respond to my request to explain the lapse, but yesterday Stapleton’s campaign manager Michael Fortney told ColoradoPolitics’ Joey Bunch:

Fortney: “When this was pointed out to us, our campaign updated the necessary paperwork within the rules.”

It actually took Stapleton’s campaign over two weeks to update the disclosure form. See it here.

I pointed out the apparent breach of Colorado law on June 6, and Stapleton’s campaign didn’t fix the problem until June 22, the day after the Colorado Times Recorder filed an official complaint about Stapleton’s disclosure stumble, as part of an explanation of the SOS’ new rules for enforcing campaign finance laws.

Stapleton filed a new personal financial disclosure form listing the Harmes C. Fishback Foundation as a “source of income” with “Jennifer Stapleton,” who’s its executive director, being the “recipient.” The Fishback Foundation is Staplton’s family’s $1.4 million foundation.

Jennifer Stapleton is now also disclosed on Stapleton’s list of “all offices, directorships, and fiduciary relationships held by you, your spouse, or minor child(ren) living with you.”

Fortney told Bunch that Stapleton did not break any laws because he did not “willfully” leave Jenna Stapleton’s income off the disclosure form and corrected the mistake within 30 days.

Secretary of State Wayne Williams’ office declined to weigh in on the matter, informing me in a July 3 dismissal of my complaint that the district attorney would be responsible for enforcing any crimes broken by Stapleton under Colorado’s Public Disclosure law.

Stapleton has yet to respond to my request for an explanation of why Jenna Stapleton was omitted from his disclosure forms, going back at least as far as 2012. Was his lawyer responsible fro the lapse? Fortney? Was Stapleton not aware of his wife’s 30K? If this wasn’t willful, then what happened?

8 Community Comments, Facebook Comments

  1. JohnInDenver says:

    Do you suppose Stapleton would be willing to let an independent professional do a comparison and contrast between his family's income tax returns, his campaign & government disclosures, and his family's financial records? Heck, I'd even be interested in a written opinion from a CPA chosen by Stapleton himself.

  2. DavieDavie says:

    If Stumbleton is this sloppy with his own personal records and filings, I can only imagine the mess his successor as Treasurer may find.  Better check his office couch for Krugerrands in the cushions!

  3. mamajama55mamajama55 says:

    Dave Young (Dem Treasurer candidate) remarked at our county meeting how un-transparent Stapleton's administration is, compared to Cary Kennedy's. It's difficult to find out how state funds are invested.

    Also, Stumbleton's "professional" website looks like one big campaign ad. Complete with links to his Facebook page . His name is mentioned 7 times on the treasurer website landing page, and the "About the Treasurer" bio is similar to what's on his campaign website. The "Treasurer's Initiatives" page is one big diatribe for PERA reform his way, and again very similar to his campaign page on PERA.

    So he's using the Treasurer website to get his name and photo and buzzwords out there for his Governor campaign.

    I think Walker's trying to push the envelope on campaign finance law and see if he gets called on it. We know Wayne Williams will look the other way.

    • Lucy MontroseLucy Montrose says:

      His website looks like a campaign ad? Makes perfect sense. Sell, baby, sell; hustle and build the personal brand, instead of doing a high-quality job. Perfect for someone of the party of Prosperity Jesus.

  4. Gray in Mountains says:

    I think Walker is running a scam foundation like Trump. Does it exist only to provide salary and benefits to his wife? Where do contributions come from? What does the foundation support in addition to Jenna?

    • mamajama55mamajama55 says:

      Gray, the financials for the Harmes Fishback Foundation are at Propublica here.

      My takeaways from a cursory once-over:

      1.The Harmes Fishback Foundation is primarily  a Stapleton family business, not primarily a nonprofit. His entire family is on the Board of Trustees.

      2.The foundation is legit – that is, it does make bona fide charitable contributions, but at a shockingly low ratio compared to the foundation's total income and assets. It's evident to me that the Stapleton family is using this foundation to raise money from stocks that they are holding on to from year to year.  The ratios of  charitable dollar disbursements to dollars used to raise money are reasonable, in the 80-90% range.

      But when we look at Foundation total income, and especially at the ratio of assets held on to year to year (stocks, bonds, real estate),it begins to look like a shell corporation to conceal investment proceeds from the IRS. Someone with greater financial /corporate expertise than I have needs to look at it.

      I'd write a diary on it, but someone with greater nonprofit and budget expertise needs to look this stuff over. I know we have corporate lawyers who post here, and nonprofit experts. Also, a reporter who can contact sources under his/her own name should probe further. Jason? Eric M?

      Family Trustees

      * Walker's entire family is on the Board of Trustees – not just his wife, Jenna, but his father, Craig R Stapleton, his grandmother, Katharine H Stapleton, who also got a $30,000 income from being on the board in 2015, but not 2016,  and his uncle?  Benjamin F Stapleton III.*

      This Board of Trustees info is from page 7 of the pdf of the 2015 Foundation return on Propublica. The 2016 info is in txt form, not pdf form, and is available here.

      FH Foundation makes real charitable contributions, but at a low rate compared to assets.

      The foundation is legit – it does make substantial charitable contributions to legit charities – pp 17-23 of the same 2015 return. Page 11-12 of the 2016 return. 2017 return is not on Propublica.

      However, the ratio of income to disbursement is really low for a nonprofit when total assets are accounted for. The Charity Watch website downgrades a charity’s rating when it looks like it is hoarding cash instead of disbursing it.
      So if the foundation has assets of 12 million, which they did in 2016, and they only disbursed 650,000, which they did, including expenses to raise it, this “charity” is disbursing about 5% of its total assets.

      Charity Watch grades charities by how much it costs to raise $100. So dollars actually disbursed/ dollars raised. That is- their ratio of dollars disbursed to expenses to raise the dollars were 80-90%, but their assets and income far exceeded those ratios.

      CharityWatch believes it is reasonable for a charity to set aside less than three year’s worth its annual budget for financial stability and possible future needs. When a charity’s available assets in reserve exceeds three year’s worth its annual budget, CharityWatch downgrades its final letter grade rating. However, we continue to show what a charity’s efficiency rating was prior to being downgraded for those donors who do not wish to factor a charity’s high assets into their giving decisions.

      Example: If a charity annually spends about one million dollars, CharityWatch will not downgrade the charity’s rating for high assets as long as it has less than three million dollars of available assets in reserve. CharityWatch reduces the letter grade ratings of charities holding available assets in reserve equal to between 3 and 4 years their annual budgets. CharityWatch downgrades to an F rating any charity holding available assets in reserve equal to 5 years or more of its annual budget.

      In 2016, the Foundation disbursed 646,000 to charities (585 683 direct dollars plus ). Meanwhile, they had assets of over $11 Million Dollars!!!!! And income of 1.4 million (1,403,826) in 2016 (page 13) That's a ratio of 41% – D on Charity Watch's system.

      On the $11 million in assets:

      Charity Watch says it's legit for a charity to carry over 3 years of probable budget expenses , since social needs go up, and contributions may not.  But a ratio of 11  million to 650,000 far exceeds this. It's evident to me that the Stapleton family is using this foundation to raise money from stocks that they are holding on to. A list of stocks traded ( p 15 of 2016 return) includes Pepsico, Mercer (Robert Mercer – the big Trump donor and wannabe Yuma Sheriff Depitty), Tmobile, etc.

      In 2015, the Foundation raised 1.4 million, and disbursed 646,000.

      * Ben Stapleton III is notable for 3 things : 1) apparently, the family was not at all ashamed of great grandpappy Ben Stapleton I the Klansman, since they kept on passing the name down, 2) Ben III is a lawyer in a very high powered NY firm which does beaucoup financial transactions, which must come in handy in keeping the foundation's investments lucrative, and 3) Ben III's firm, Sullivan and Cromwell, is making a name for itself with pro bono work defending LGBT rights, after being successfully sued for discrimination by a gay associate in 2007. Just…interesting, especially is Walker's gubernatorial campaign PACs and friends start gay-bashing Polis. 

       

      • JohnInDenver says:

        MJ —

        Lots of family foundations have a "generous" endowment of investments sheltered at someone's death. They are then used for funding preferred charities. IRS requires a minimum disbursement of 5% of assets each year. If investments have greater payoffs or further donations come in, they are added to the holdings and it increases payouts in future years. If there are losses, future years are reduced.

        Management of the foundation may be done without explicit remuneration (e.g., Trump Foundation), pay someone a sinecure (which seems to be happening here), or pay a professional relevant to the area of donations. Administration expenses cannot be "unreasonable." Jenna Stapleton reports on the Form 990 spending 15 hours a week — which would be 780 annual hours — and earning $30,000 (and no benefits). That's less than $40 per hour. Other Board members serve without pay, reporting 0 hours per week.  In 2016, there were only 2 listed: Benjamin F. III and Craig R. — e.g., Walker's father and uncle.

        So, a quick scan makes this seem like a pretty straightforward family foundation, dropping $600,000 into charitable coffers. In 2016, there were grants or pledges for $885,443: $350,000 of that went to three institutions: Metro Denver YMCA, Park People Save our Sundial and the US Air Force Academy Endowment Fund. Not my choice of charities, but not explicitly political, either.

        • mamajama55mamajama55 says:

          John – Thanks for sharing your expertise. Questions about this foundation remain, however.

          1. Why is the Stapleton Family Foundation called the Harmes Fishback Foundation (HFF)? Fishback seems to have been a fairly unremarkable manufacturer of jams and jellies, who died in Denver in the 1970s.  Why name it after him? Why is there no website for the foundation?

          2. I never said there was anything weird or political about the disbursements to charities – they seem kind of straightforward – some are even somewhat progressive (don't tell Walker).

          3. There is no "death endowment" to shelter assets for. Walker's aunt Katherine ( I mistakenly named her as his grandmother) is 71, but still alive, as are the other Stapleton family members on the Board of Trustees.

          4. What is weird is that the disbursements have remained about the same for 6 years – $500,000 to $650,00 – while the foundation's income has increased to around 5 million a year. This is much higher than what Charity Watch recommends – they say that a charity should retain ~3 X its annual budget, which would conservatively allow the HFF to retain about 2.2 million per year. The rest should be disbursed.

          What you would expect, with this generous portfolio of assets, is that the HF Foundation's giving would increase to around 7 million – but it hasn't.

          3. In addition, HFF has assets of about 12 million – securities and bonds which it uses the interest income to donate to the charity. However, it also very conveniently allows this 12 million in assets to be taxed very little, or not at all. See page 4, part 5 of the 2016 return.  On that 12 million in 2016, they paid ~$13,000 in taxes. and donated ~$53,000 (interest & dividends) to the charity, allowing them a tax rate of ~.001 on those assets.

          So here's what I think now that I've spent way too much time on this little mystery – the Stapleton Family is using the Fishback Harmes Foundation as a tax shelter. It allows them to keep accumulating stocks, without paying any taxes on them as long as they donate some of the proceeds to the foundation.

          This allows them to keep high value Verizon, Mercer, and other stocks on hand virtually tax free, all while enhancing their rep for community-mindedness and generousity.

          The finances of the HFF aren’t relevant to the Stapleton for Gov campaign, except as Stumbleton failed to disclose his wife’s income from it, as Jason noted in the original post. I don’t know where taxes would be owed from the $12 Mil in securities if they weren’t sheltered by the foundation – IRS, state of CO, state of CT?

          But they do point to how the Bush / Stapleton clan operates – with huge amounts of money, while looking socially responsible, and avoiding taxes with accounting tricks.

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