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Labor-business battle is raging in Colorado

The two sides duel over ballot measures, one touted to be the nation's toughest corporate fraud law.

August 17, 2008|Nicholas Riccardi | Times Staff Writer

DENVER — Colorado has become an important battleground state in the presidential election, and one of the biggest senatorial races in the nation is over filling the seat of its retiring senator, Wayne Allard.

Yet the most ferocious political fight in the state doesn't involve Democrats and Republicans. Instead, unions and business groups have loaded the November ballot with an array of competing initiatives.

Each side says it will spend tens of millions of dollars to push its agenda and defeat its opponent's measures, which each contends would cripple the state's economy.

The seven initiatives on the ballot include what proponents say would be the toughest law against corporate fraud in the nation, which would make company executives liable for crimes committed by their firms. Each side says the initiatives should be judged on their own merits, but also accuses the other of acting in bad faith.

"Their agenda's very clear," Jan Rigg, a spokeswoman for the business group Defend Our Economy, said of her labor foes. "They want to send a message to the business community that they're going to play hardball on this."

But Jess Knox, executive director of Protect Colorado's Future, which is backing the corporate fraud initiative, contends that certain business groups have backed anti-labor initiatives to "divide workplaces and divide workers."

"We have a pretty rickety national economy, and what we need to do is come together," Knox said.

The dueling initiatives join at least two other hot-button issues on the November ballot: proposals to ban affirmative action and to declare a fertilized egg a human being.

"It's fair to say that Colorado will be the center of ballot initiative world in November," said Joe Mathews, a senior fellow at the nonpartisan New America Foundation, which follows voter initiatives. "The business-labor [ones] likely will be the biggest, most bitter and hard-fought ballot fight in the country."

The labor-business battle began last year when Democrats, jubilant about controlling the statehouse and the governor's mansion for the first time in decades, sent a bill to newly elected Gov. Bill Ritter Jr. making it easier for workers to unionize.

Ritter outraged labor by vetoing the bill. Ritter later issued an executive order enabling state workers to collectively bargain. That led to a group of business leaders, spearheaded by John Coors of the prominent brewing family, to propose a ballot initiative to make Colorado a right-to-work state.

The initiative, Amendment 47, would enable workers to opt out of unions in already-organized work sites, which 22 states, including all of Colorado's neighbors except New Mexico, allow. (California does not.)

"Coloradans appreciate and love their freedoms, and that's the main thrust of Amendment 47," said Kelley Hart, spokesman for the group that is funding the initiative.

Business groups later added measures to the ballot that would prevent unions from using member dues for politics without worker approval and an initiative to ban political contributions by any entity that deals with the government, including contractors and unions.

Labor and progressive groups fired back with a bevy of counterproposals, four of which are on the ballot. One would require a formal explanation before workers are fired; another would force businesses with more than 20 workers to provide health insurance; and the third would allow workers to seek damages outside of employee compensation.

The most dramatic proposal, though, is the corporate fraud measure. It was inspired by a local scandal involving Denver-based telecom giant Qwest Communications International Inc., whose chief executive was convicted last year of insider trading for selling his stock when he knew the company's public revenue projections were inflated.

When the conviction was overturned by a federal appeals court in March, labor groups drafted the corporate fraud measure. Backers say the aim is to enable local prosecutors to attack earnings fraud and other corporate crimes.

"This is a common-sense law," said Lew Ellingson, a former Qwest worker who now works for the Communications Workers of America. "If people break the law, they should be held responsible."

Mark Grueskin, the attorney who drafted the measure, said it merely closed a loophole in state law. Executives can already be prosecuted if their firms contradict a state order, such as dumping toxic waste. The initiative also makes them liable if they passively defy one by, for example, not correcting inaccurate earnings reports.

Executives are rarely prosecuted for the existing law, Grueskin said, and he doesn't expect a significant uptick should the initiative pass. "This isn't the focus what most DAs are doing today," he said.

But Mark Lowenstein, an expert on corporate law at the University of Colorado at Boulder, said that if the initiative passes, executives could be left in the position of not knowing under what circumstances they could be held criminally liable. They would be forced to prove they didn't know about any misdeed in their firms.

"It's terribly over-broad," he said of the initiative.

Rigg, whose group is fighting the measure, argued that it would scare away businesses that might otherwise relocate to Colorado. "You're not making Colorado a very attractive place to do business," she said.

Proponents say the measure shouldn't have that effect.

"I'm not sure that Colorado's economic development campaign is: 'Come to Colorado; we love corporate fraud,' " Knox said.

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nick.riccardi@latimes.com

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