Stapleton Moonlighting Going Underground?

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?

Would Stapleton's side-job company going private make you trust him less?

View Results

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5 Community Comments, Facebook Comments

  1. Get an opinion from Attorney General Suthers!


    As I’ve said before – Walker is a good guy, but there is a massive conflict of interest afloat here, in that, much of Colorado’s Treasury Portfolio is invested with investment banks (JP Morgan, Goldman Sachs, CitiBank, Wells Fargo, etc) – banks that are in a position to HIGHLY RECOMMEND and UPGRADE their ‘investors’ to purchase the publicly traded stock of Sonoma West Holdings

    Granted, if the company goes private and is no longer publicly traded, that becomes less of an issue (technically) however, any business, especially one involved in land (like Sonama West is) always benefits from generous loans, often given by the same banks – in addition, those banks can still recommend their investors to invest in Sonoma West, even after it goes private, should the private entity solicit investors, all in exchange for the Colorado Treasury buying the bonds of ‘said’ banks

    There’s a massive conflict of interest potentially sprouting, and the Attorney General needs to deliver an opinion and have this matter be done with

  2. sandra fish says:

    nice work by John here… i still have many questions, but since the new Aol/HuffPo closed PoliticsDaily, i’m among the writing homeless (tho happy to still have the day job and a real home!)…

    it would be great to see a business reporter look into this public company… in quickly reading their documents, i don’t understand WHY this is a public company… they own some real estate, in fact, not all that much real estate, which they lease… my recollection is that it’s a strip mall and possibly winery land of some sort? the lease money then pays some pretty nice salaries (and consulting fees) to people in the family for what appears to be not necessarily full-time jobs..

    why does one need a public company for such ownership? i’ve been away from business reporting for too long to understand that aspect of this arrangement… but would love it if someone else delved into that question.

  3. BlueCat says:

    We are seeing it in the actions of elect Republican Governors, state level officials and legislatures.  It’s all about putting every organ of government directly or indirectly under the control of corporations and killing the unions, the only source of funding large enough to compete with unlimited corporate funding to make sure progressive Democrats  can’t compete with corporatist Republicans in the electoral arena.

    Whether it’s legislation to end collective bargaining rights, and end to well paying middle class jobs , an end to middle class  access to services and  education,  the sale of public power plants on a no bid basis to private corporations, dissolving municipalities, dismissing elected  municipal governments, voiding contracts made by  entered into by those elected governments and turning towns over to private corporations,  replacing our public school system with a private for profit system, fighting 21st century healthcare for all, mandating quarterly drug testing for all public employees to be administered by your (cough, now your wife’s) drug testing company or, in less predominantly  red states like ours, a constant seeking after the merging of elected Republican officials public roles with their private business interests, it’s all aimed at the same goal: Final and complete  triumph of corporatism as a political system to replace the American way of government by the people.  You want to see internationalism and black helicopters for real?  Look no further than today’s corporatist GOP.

  4. Half Glass Full says:

    Signed, Susan Smith

  5. ArapaGOP says:

    Because this is still America, isn’t it? Ridiculous.

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