Watson refers voters to his accountant

By Peter Jones

The race to represent state House District 3 has gotten increasingly contentious with Republican candidate Brian Watson letting his accountant make the direct case to voters about his personal finances.

“Contrary to the claims made in recent political campaign ads, Mr. Watson does not owe the Internal Revenue Service any amount whatsoever in unpaid taxes,” says the letter signed by Linda Doerksen of Kenneth L. Jackson & Associates.

The undated letter posted to Watson’s campaign website came after a group, Colorado Accountable Government Alliance, issued a mailer accusing Watson of owing $278,000 in back taxes and other financial impropriety.

The war of words is another sign of how south metro Denver is playing an important role in the 2012 state Capitol power play.

Watson, a Greenwood Village businessman, is challenging Democratic incumbent Rep. Daniel Kagan in a newly redrawn district that is expected to be crucial in deciding which party takes control of the Colorado House of Representatives.

Watson steadfastly denies any financial wrongdoing.

“I’m a small-business owner and have had impacts like anybody else in the worst economy since the Great Depression,” he said. “We pay all of our bills and continue to pay all of our bills. We think it’s very unfortunate and very sad that the opposition feels the need to make up such things.”

According to Watson, a random IRS audit several years ago found nothing whatsoever wrong with the candidate’s recent tax payments.

Watson took the unusual move of asking his accounting firm to back him up in a detailed full-page letter the candidate has posted to his campaign website. The letter makes a point-by-point rebuttal of the flier that had referred to the Republican challenger as “Brian ‘Deadbeat’ Watson.”

The accountant’s letter describes Watson’s involvement in a company called Peak Party Rentals, saying it was the firm’s general manager, not Watson, who failed to pay taxes to the Colorado Department of Labor and Unemployment.

“This corporate tax liability was incurred … solely as the result of misconduct of the general manager and not as the result of misconduct by Mr. Watson,” the letter says, noting that the State of Colorado does not hold the candidate liable.

The IRS did hold Watson responsible for unpaid payroll taxes, however, and eventually filed federal liens against him, though Watson was able to get the total bill reduced. He paid off the eventual debt of more than $160,000, but later filed an appeal claiming the manager should be liable.

Watson received no salary or other compensation and was not authorized to sign on Peak Party Rental’s bank account, according to the accountant’s letter, but he was ordered to pay back $600,000 in business loans when the company went under.

“We’re going to payback every dime,” he said.

For Kagan’s part, the Cherry Hills Village Democrat says he has no intention of making an issue of his opponent’s finances.

“What I’m focusing on is what I’ve done and will continue to do to bring jobs and education to Colorado families,” he said.

District 3 includes parts of Greenwood Village, Cherry Hills Village, Englewood, Littleton and Sheridan.