State senate candidate Stephen Varela accused of violating campaign finance law

·8 min read

A family-run campaign compliance company that maintains receipts for conservatives in Colorado hadn't filed a complaint with the Secretary of State’s office in 20 years until March 2022, when Tammy Klein filed a report about District 3 state Senate Republican candidate Stephen Varela.

Klein alleged that Varela told people he was running for county commissioner and accepted donations for the race at some point between November 2021 and March 2022.

“We're professionals in campaign finance. That's our business. That's our reputation. We felt like we had to file a complaint to protect our reputation as well as our clients that we do have down there,” Klein told the Chieftain.

The Secretary of State’s office said that Klein’s complaint contained allegations that “could support a factual and legal basis for violations of Colorado campaign finance law” if proven to be true, but dismissed Klein’s complaint in August after a few months of investigating because of “insufficient evidence” Varela violated campaign finance regulations.

Pueblo County Democratic Party Chairperson Marybeth Corsentino filed a follow-up complaint last week with additional potential evidence. The complaint included a photo of a playbill for the Broadway Theatre League that features a half-page ad for Varela to run for county commissioner.

"I don't think he needs to do jail time or anything, but I think he needs to be accountable for his actions," Corsentino said.

Varela denied involvement with the advertisement in the playbill and said that he never set up a candidate committee to run for county commissioner: “those are baseless claims against me,” Varela told the Chieftain.

“It's a highly partisan attack against me,” Varela said.

“Here we go again, more partisan politics, this exactly why I'm no longer a Democrat. I'm telling you, this is why a lot of people are leaving the Democratic Party,” Varela added. “They're not leaving for any other reason but these tactics that attack people's integrity.”

Through his campaign communication manager Alan Philip, Varela declined additional requests for comment.

Colorado Republicans are hoping to regain control of the state Senate in November and the District 3 race is one of the most competitive races this fall. Varela and Democratic incumbent Nick Hinrichsen have each raised over $80,000 and outside groups supporting either candidate have already begun sending brochures to Pueblo voters.

An initial review by the Secretary of State’s office of Corsentino’s complaint is due Sept. 23.

More:Pueblo political candidates debate policy, national issues; Varela misses debate

Did Varela run for county commissioner?

The advertisement that ran in the Broadway playbill does not state whether Varela was running as a Democrat or Republican, but said that Varela was running for Pueblo County Commissioner and included the phrase, “proud to serve again.”

Varela is a military veteran. He filed paperwork to run as a Republican for state Senate in April 2021 but terminated the committee in October 2021. Varela formally re-started his campaign for state Senate in late February 2022, days before precinct caucuses started.

The Chieftain independently verified that the advertisement ran in playbills from at least November through March. The Broadway Theater League, a nonprofit run by volunteers, was not immediately able to confirm who had placed the ad.

A representative with the Broadway Theatre League of Pueblo told the Chieftain that a half-page ad costs $600 to run for the season.

Varela did not file official paperwork to run for county commissioner with the Secretary of State and no independent expenditure committee for a Varela bid for county commissioner was filed. He told the Secretary of State's office that he did not “’seek or accept any donations for a race for Pueblo County Commissioner,’” according to the motion to dismiss Klein’s complaint dated July 6, 2022.

Varela said he first heard about the ad when contacted by a reporter for the Colorado Times Recorder, which first reported on Corsentino’s complaint on Wednesday.

“Honestly, (Wednesday) was really the first time I heard about it when I was reached out to and I was just like, ‘Whoa, I didn't even know it was in there yet,” Varela said.

Campaign finance rules stipulate that if spending more than $1,000, independent expenditures need to be reported and a disclaimer must be provided.

Klein, who filed the original complaint about Varela in March, said it was the only complaint the business has filed in two decades “because we’ve never been in that position.”

Klein works for SWS Polifi along with her mother, Marge Klein, who was the designated filing agent on Varela’s paperwork the first time he ran for state Senate in 2021.

“Even though the violations that he did that we filed were minor and reflective of a rookie candidate without professional help, the Secretary of State came to their conclusion, but we did have to file it,” Klein said.

Klein told the Chieftain that Varela said he was ending his state Senate campaign in October 2021 to run for county commissioner and that she heard from other Pueblo Republicans that Varela was planning on running.

“Even though we're out of Denver, we have clients all across the state and we have several clients that are in Pueblo. So, certainly, we're going to hear what's going on. I’ve had relationships with the donors for many, many years. Of course, people are going to talk to me,” Klein said.

“I was aware that some donors have said that they had given him money” for the county commissioner’s race, Klein said.

Klein’s complaint also said that Varela's campaign website, vote4varela.com, had an active donation link with an “improper disclaimer” mentioning Marge Klein as the registered agent. The motion to dismiss stated that Varela changed the filing agent to himself and that he told investigators he did not solicit campaign contributions before the campaign committee was registered.

After Varela decided to switch back to running for state Senate, he contacted SWS Polifi to see if they would work for him again. The company declined: Klein said that they had already committed to working for another candidate and that they reserve the right to not work with people if they don’t want to.

More:Both candidates in Pueblo’s state Senate race have swapped parties at least 10 times

Varela’s indecisive history

Varela has a documented history of changing party affiliation but has been registered as a Republican since February 2021. He has previously indicated to the Chieftain that he likely voted for Diane Mitsch Busch, the Democrat running against current Republican Rep. Lauren Boebert, in the November 2020 3rd Congressional District election.

Two months after Varela switched back to being a Republican, he filed a candidate affidavit to run for the 3rd district state Senate seat, then held by Democrat Leroy Garcia. Garcia was appointed to a position at the Pentagon in February 2022 and Hinrichsen, Varela’s opponent in November, was tapped to replace him.

Marge Klein with SWS Polifi, Varela’s first designated filing agent for the state Senate campaign, gave the first donation— a $50 contribution from Klein is recorded on April 16, 2021, a day after the first candidate affidavit was filed. She did not respond to a request for comment.

Varela’s first candidate committee was terminated on Oct. 29, 2021, records show, six and a half months after he originally registered. During his initial bid for the state Senate, Varela raised $1,475 from seven donors — three of them gave the maximum amount of $400.

Varela’s first campaign spent $250 on services with Klein’s company, $39.20 on bank fees and the remaining balance of $1,185.80 to Cutter Consulting, a digital marketing firm based in Colorado Springs.

Varela’s campaign spokesperson, Alan Philip, declined to elaborate on why he had unregistered for state Senate and then decided to run again in late February.

“As far as his timing, there are many reasons — several personal — that go into decision-making. Such was the case for Stephen,” Philip wrote in an email.

Zach Swearingen, the current Republican candidate for county commissioner, filed a candidate affidavit to run for the office on Feb. 5, 2022. Like Varela, he ran unopposed in the June primary.

Swearingen, along with several other Republican candidates on Pueblo ballots in November, has hired SWS Polifi for campaign finance compliance.

Varela sent an email to the Secretary of State’s office on Feb. 25, 2022 to reactivate his candidacy for Senate District 3, two days after now-incumbent Hinrichsen assumed office and four days before the Republican Party precinct caucuses.

Tammy Klein’s complaint was filed with the Secretary of State’s office on March 18, the same day that Varela re-filed a committee registration form for his campaign.

Three candidates had filed with the Secretary of State to run as the Republican against Hinrichsen. All of them had filed candidate affidavits in late January or early February, but Varela was the only one to qualify for the primary ballot at the county assembly on March 19.

One of the other Republican candidates, Alex Bugatu, is still running as a write-in Republican.

The Pueblo County GOP assembly was held at Chavez Huerta Preparatory Academy. Varela is the president of the board of the charter school and has come under recent criticism from staff for a new CEO that was hired in June.

Anna Lynn Winfrey covers politics for the Pueblo Chieftain. She can be reached at awinfrey@gannett.com or on Twitter, @annalynnfrey.

This article originally appeared on The Pueblo Chieftain: Did State Senate candidate Stephen Varela violate campaign finance laws?