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Give Until It Hurts

The story of Gale Norton's last-minute return of campaign contributions from Lloyd's of London investors.

The timing of Colorado Attorney General Gale Norton's sudden intervention into the Lloyd's of London securities case last week wasn't half as odd as the timing of Norton's last-minute return of contributions from Lloyd's investors to her U.S. Senate campaign after a planned meeting became controversial.

Last month Norton took a sudden interest in the Lloyd's case, which has been pending in Denver District Court for months. On July 18, Norton, who has had essentially no personal involvement in the complex case since Assistant Attorney General Richard Djokic and others in her office began working on it last year, suddenly announced that there would be a public meeting July 24 of Colorado investors who were disgruntled over the settlement with the giant insurance association. During the weekend that intervened between the announcement and the meeting, Norton received a campaign contribution check from Preston Smith, one of the Lloyd's investors. Since the start of the Senate campaign--as far back as last October--Norton has received a total of seven contributions from four Lloyd's investors: Smith, Raymond Lee, Sam Perry and Norman Hart.

Norton's Monday morning quarterbacking of a case in which Colorado Securities Commissioner Phil Feigin had already signed a settlement raised eyebrows in the business and legal communities. The announcement that there would be a meeting made headlines the day before it was to be held, and it was on that day that Norton says she sent a memo to her campaign treasurer, Raymond Gifford, asking him to return the Lloyd's investors' contributions.

More than fifty people attended the meeting, mostly investors and their attorneys who wanted to voice their disappointment and anger over the agreement that for all intents and purposes had settled their dispute with Lloyd's. Commissioner Feigin said later that he understood the group's frustration, but he sounded livid at Norton's intimation that there was anything more to discuss. "I don't know what she's doing," he said. "Ask her."

Norton says she felt the investors deserved the opportunity to have a government official explain the proposed settlement. Some cynics say the meeting was prompted by the campaign contributions and that it was only after the publicity over the impending meeting that Norton was prompted to return the contributions, thus avoiding the appearance of a conflict of interest. Norton doesn't describe it that way. She says the meeting was nothing less than an altruistic move.

"I would have been better off not to have had the meeting," says Norton. "If I had said [the settlement] was a done deal, then I would have been able to keep those campaign contributions. So it was to my disadvantage to have had the meeting."

She adds, "I try to keep my campaign and the attorney general's office as separate as possible. And doing the right thing as attorney general sometimes makes campaigning for the Senate more difficult."

Her campaign manager, Jeanne Adkins, admits that the campaign accepted contributions from at least four of the disgruntled Lloyd's investors but says the money was returned as soon as their standard "contribution checking procedure" spotted the potential conflict.

The attorney general herself says that the reason the checks contributed last year took as much as nine months to catch is that her office, until that time, did not know the names of all the investors in the Lloyd's case.

"I don't know that we knew all the names," says Norton. "There still may be people in my contributor list that are [investors] that I don't know. The other thing is that my role in the litigation recently expanded--and it is in part based upon what kind of role I will play personally in litigation in a matter that I [will] judge my need to return contributions."

Campaign treasurer Gifford says the returned checks totaled about $1,650 and that "checks were cut and returned" to the investors as soon as Norton sent him a memo on July 23. Gifford is quick to add that if there are any more Lloyd's investors who have contributed to Norton's campaign, their money also will be returned.

Adkins says the Lloyd's issue has "absolutely nothing" to do with the campaign. "That's an A.G. [Attorney General] issue," she says. And, Adkins argues, since the checks were "identified and returned" using the campaign's "normal operating procedures" designed to keep business at the Attorney General's office separate from the race, all they prove is that the system is working.

Norton's competitor in the August 13 GOP Senate primary doesn't think so. "[The hearing] brought up a lot of questions, and these contributions do not speak well for the motivation behind that hearing," says Dick Wadhams, campaign manager for candidate Wayne Allard. "The contributions and the hearing seem to be closely tied." Wadhams contends that the return of the money seems to be nothing more than a panicked response to the coverage the meeting received.

But those aren't the only campaign-contribution questions Norton faces. Her July 15 report to the Federal Election Commission lacked occupation and/or employer information for 41 of the 161 "major" (those giving over $200) contributors to her campaign--constituting over a third of the money raised in that category. Federal law requires candidates to make good-faith efforts to provide complete information, including the date of the contribution and the name, address, occupation and employer of the contributor. Failure to do so can result in civil penalties.

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