Financial Mismanagement and Commingling of Funds in

Lake County, Colorado (home county of historic Leadville, CO)

Lake County, Colorado, prides itself on its commitment to community values, sustainable development, and responsible governance. However, recent events have raised serious concerns about the integrity of its financial management and the conduct of public officials, particularly County Attorney Chris Floyd and the Lake County Board of County Commissioners (BOCC). Allegations of financial mismanagement, commingling of funds, and abuse of power by the county attorney demand scrutiny and action. This op-ed outlines the legal bases for investigating these issues and calls for a forensic audit to restore public trust in Lake County’s governance.

Financial Mismanagement and Commingling of Funds

The Lake County BOCC’s handling of public funds, particularly grant money, raises significant legal and ethical concerns. In a July 2025 work session, the county manager publicly acknowledged writing off $1.3 million in grant funds due to an inability to account for their use. This admission, captured on record, points to a systemic failure in financial oversight. Further, it has been revealed that the county’s finance department, under a previous BOCC, commingled grant funds with the general fund without proper documentation. This practice violates fundamental principles of public financial management and potentially breaches Colorado law.

Under Colorado Revised Statutes (C.R.S.) § 24-75-201, public entities are required to maintain accurate and transparent financial records. Commingling grant funds with general funds without clear documentation undermines accountability and violates the public’s trust. The Colorado State Auditor’s Office (OSA) has authority under C.R.S. § 2-3-103 to investigate suspected financial mismanagement by local governments. While the OSA’s Fraud Hotline does not extend directly to local governments, it encourages reporting concerns to independent Certified Public Accountants (CPAs) conducting annual audits or to district attorneys for potential criminal investigation. The absence of documentation for $1.3 million in grant funds is a red flag that warrants a forensic audit to determine whether these actions constitute mismanagement or even fraud.

Additionally, C.R.S. § 18-8-404 outlines the crime of misuse of public funds, a class 2 misdemeanor, which occurs when a public servant knowingly uses public money for unauthorized purposes. If the commingling of funds was intentional or resulted in misappropriation, it could escalate to a class 6 felony under C.R.S. § 18-8-407, which addresses embezzlement of public property. A forensic audit is essential to trace the flow of funds, identify any misappropriation, and hold responsible parties accountable.

Abuse of Power by the County Attorney

Chris Floyd, Lake County’s County Attorney, has been at the center of allegations involving abuse of power and conflicts of interest. As the chief legal officer appointed by the BOCC, Floyd is tasked with providing impartial legal advice to the county, as outlined on Lake County’s official website. However, her actions suggest a pattern of intimidation and self-interest that undermines her role and the public’s confidence in county governance.

In early 2025, Floyd responded to a citizen-initiated complaint requesting a forensic audit of county finances with a threatening letter. The letter demanded a meeting prior to a scheduled court hearing and warned that the county could pursue legal action against individuals if their claims lacked merit. This tactic appears designed to intimidate citizens exercising their right to petition the government, a right protected under the First Amendment of the U.S. Constitution and Article II, Section 24 of the Colorado Constitution. Such actions could be construed as an abuse of power, as they leverage the county attorney’s authority to suppress legitimate public inquiry.

Furthermore, shortly after the withdrawal of the initial complaint, Floyd’s personal law firm, Burns, Figa & Will, General Counsel, sent cease-and-desist letters to several individuals, including those not involved in the original complaint. These letters demanded the removal of social media posts questioning Floyd’s conduct, an apology, and threatened legal action for non-compliance. This aggressive response raises concerns about retaliation and potential violations of free speech. Under C.R.S. § 18-8-306, attempting to influence a public servant through deceit or threats constitutes a class 4 felony. Floyd’s use of her personal law firm to silence critics while serving as county attorney suggests an improper use of her position and resources.

Additionally, documents reveal that Floyd’s law firm billed Lake County more than $615,000 for legal services while Floyd served as county attorney, a role she held as a contractor before becoming a county employee in 2024. This arrangement raises questions about conflicts of interest, as Floyd was simultaneously representing the county and benefiting financially through her private firm. The Colorado Rules of Professional Conduct, specifically Rule 1.7, prohibit attorneys from engaging in representation that creates a concurrent conflict of interest unless informed consent is obtained. There is no public evidence that such consent was provided or that the BOCC adequately scrutinized this arrangement. This situation demands investigation to determine whether Floyd’s actions violated ethical standards or constituted self-dealing.

Legal Basis for Action

The allegations against Floyd and the BOCC are grounded in several legal frameworks:

1. Colorado Open Records Act (CORA): Under C.R.S. § 24-72-201, the public has a right to access government records, including financial documents. The BOCC’s failure to maintain transparent records of grant funds violates this statute, and a forensic audit could ensure compliance.

2. Colorado Criminal Code: As noted, C.R.S. § 18-8-404 and § 18-8-407 provide grounds for investigating misuse or embezzlement of public funds. The $1.3 million write-off and undocumented commingling of funds justify a criminal inquiry if evidence of intent or negligence is uncovered.

3. Colorado Governmental Immunity Act (CGIA): A Notice of Claim filed in March 2025 under C.R.S. § 24-10-109 sought a forensic audit but was dismissed by Floyd as baseless. The CGIA requires governments to respond to claims in good faith, and Floyd’s dismissive response, coupled with her threats, suggests an attempt to evade accountability.

4. First Amendment and Colorado Constitution: Floyd’s threats to sue citizens for their social media posts and public complaints infringe on protected speech. The U.S. Supreme Court has consistently upheld the right to criticize public officials (New York Times v. Sullivan, 1964), and Floyd’s actions may constitute an unconstitutional attempt to chill free expression.

5. Colorado Attorney General’s Authority: Under C.R.S. § 24-31-113, the Colorado Attorney General can pursue civil actions against governmental entities engaging in a pattern or practice of rights violations. Floyd’s pattern of intimidation could trigger such an investigation, particularly if it is shown to suppress public participation.

The Need for a Forensic Audit

A forensic audit is the most effective tool to address these concerns. Unlike a standard audit, a forensic audit is designed to detect fraud, mismanagement, or illegal activity by meticulously examining financial records. The $1.3 million write-off and the commingling of funds without documentation are not mere oversights; they suggest systemic issues that require independent scrutiny. The Colorado State Auditor’s Office or a third-party CPA firm could conduct this audit to ensure impartiality, as recommended by the OSA for local government fraud concerns.

Moreover, a forensic audit would shed light on Floyd’s financial dealings with the county. Her law firm’s more than $615,000 in billings raises questions about whether these payments were justified or if they reflect a conflict of interest. Transparency in these transactions is critical to ensuring that public funds were not misused for personal gain.

Conclusion: Restoring Trust in Lake County

The allegations against Chris Floyd and the Lake County BOCC are serious and demand immediate action. The commingling of funds, the $1.3 million write-off, and Floyd’s intimidating tactics point to a troubling lack of accountability. As a candidate for Colorado House District 13, Floyd’s conduct is particularly concerning, as it raises questions about her fitness for public office. Lake County residents deserve a government that operates with integrity and transparency, not one that uses threats to silence dissent or obscures financial records.

The legal bases outlined, ranging from violations of public finance laws to abuses of power, provide ample justification for a forensic audit and further investigation. The Colorado Attorney General, district attorney, or an independent auditor must step in to ensure that Lake County’s governance adheres to the rule of law. Only through such measures can the public’s trust be restored, and the county’s commitment to its citizens upheld.