State sues Eyman over campaign finances

Mukilteo resident, anti-tax activist allegedly used money for personal expenses
By Nicholas Johnson | Apr 05, 2017
Tim Eyman

Harbour Pointe resident Tim Eyman is holding his tongue after state Attorney General Bob Ferguson filed a $2.1 million campaign finance lawsuit against the well-known anti-tax activist.

Ferguson, who announced the lawsuit Friday, March 31, during a morning press conference, accuses Eyman of misleading reporting, concealment of campaign contributions totaling $490,185 and personal use of $308,000 in contributions made to political committees.

“Taking kickbacks from contractors, using campaign funds for personal expenses, redirecting donations made for one initiative to a different initiative — it’s hard to imagine what more Mr. Eyman could have done to show his contempt for our campaign finance disclosure laws,” Ferguson said.

Eyman’s attorney, Mark Lamb, said Ferguson’s comments during the press conference were prejudicial.

“Cases are litigated in court, not press conferences,” Lamb said in a statement.

“Indeed, in Washington state the special responsibilities of a prosecutor include the obligation to, ‘refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused.’”

The lawsuit also accuses for-profit signature gathering firm Citizen Solutions of participating in a scheme to conceal campaign money the company funneled to Eyman. Citizen Solutions and one of its principals, William Agazarm, could face penalties up to $924,555.

If successful, Eyman and his for-profit company, Tim Eyman Watchdog for Taxpayers, could face $1.8 million in penalties, plus $308,000 in reimbursement.

Ferguson will also ask the court to bar Eyman from participating in or directing financial transactions for any political committees going forward.

“This has been a long time coming,” said Andrew Villeneuve, founder and Executive Director of the Northwest Progressive Institute, which has been organizing opposition to Eyman initiatives for more than 15 years through the institute’s Permanent Defense project.

A 2002 agreement permanently barred Eyman from serving as treasurer for political committees. Yet, the lawsuit alleges, Eyman still managed to weave an elaborate web of financial transactions to hide campaign funds, enriching himself while keeping his contributors and the public at large in the dark.

“The more I have examined the state’s claims in this matter, the less impressed I am,” said Lamb. “It is chilling that the stated purpose of this action is to permanently bar him from participating in the political process in this state.”

The complaint, filed in Thurston County Superior Court, stems from a state Public Disclosure Commission investigation. In August 2012, the PDC received a complaint about Eyman and two of his political committees: Voters Want More Choices and Protect Your Right to Vote on Initiatives.

In September 2015, PDC staff presented the results of their investigation to the Commission, which then referred the case to the Attorney General’s Office.

On Nov. 13, 2015, the Attorney General’s Office issued civil orders to Eyman, his for-profit company, two of his political committees and Citizen Solutions.

The orders sought business and financial information, including banking and tax records, regarding Eyman initiative campaigns in Washington. While the respondents produced a smattering of records, some of which were heavily censored, they did not fully respond to the subpoenas.

In June 2016, a judge ordered Eyman to comply with the subpoenas in the Attorney General’s investigation. Even then, the defendants failed to meet the court-ordered deadline, and it took a contempt motion to obtain the records.

In September 2016, the courts ordered Eyman, his political committees and Citizen Solutions to pay the Attorney General’s Office a total of $33,000 for the costs of enforcing subpoenas in the investigation.

The lawsuit is unrelated to separate actions filed in September 2016 against Eyman, four political committees and their officers and treasurer. Those lawsuits allege shoddy accounting practices and improper disclosure of the source of funds for the committees and their ads violated Washington law.

Lamb called those actions “failed prosecutions.

“Just last year the Attorney General attempted several politically motivated campaign finance prosecutions that have been dismissed on summary judgment,” Lamb said.



“Voters Want More Choices – Save the 2/3’s” was a political committee with one treasurer and three officers, one of whom was Eyman. VWMC was created to support Initiative 1185, which would have required a two-thirds majority for legislative actions raising taxes.

On April 2, 2012, Eyman signed an agreement on behalf of the committee with for-profit signature gathering firm Citizen Solutions to provide signatures to qualify I-1185 for the November 2012 General Election ballot.

VWMC agreed to pay Citizen Solutions $3.50 per signature, a total cost of more than $1 million. Over the course of the signature drive, VWMC paid $623,325 to Citizen Solutions for signature gathering.

In addition, VWMC reported receiving $495,000 in in-kind contributions from the Association of Washington Businesses PAC and $100,000 in in-kind contributions from the Washington Beer and Wine Wholesalers for direct payments to Citizen Solutions for signature-gathering services for the I-1185 signature drive. Those contributions were not part of this investigation.

The total payments by VWMC and the in-kind contributors to Citizen Solutions for I-1185 signature gathering amounted to $1,218,325, for a total of 320,003 signatures.

Immediately after the I-1185 signatures were delivered, Eyman and his for-profit company, Tim Eyman Watchdog for Taxpayers, sought and received $308,185 from Citizen Solutions. The payment was delivered via wire transfer July 11, 2012 — four days after the signatures were delivered.

This payment was not reported to the PDC, and, the lawsuit alleges, constitutes concealment, a violation of state law. Eyman did not communicate to VWMC that he was receiving this money. Because VWMC did not report the payment to Eyman in its reports, the lawsuit further alleges Eyman caused the committee to file five inaccurate and misleading reports. Each report is a violation.

No written agreement exists related to the payment. However, a July 8 email exchange between Eyman and Agazarm references the payment. Agazarm wrote: “The immediate goal is to get you paid.”

Every transaction he made using the $308,185 for his personal use constitutes a violation of state law, the lawsuit alleges. During the PDC’s investigation, Eyman admitted he used more than $100,000 of the $308,185 “to provide for my family.”

The same day Eyman received the payment from Citizen Solutions, he made the first in a series of payments totaling $200,000 to a Virginia-based advocacy group, Citizens in Charge, to sponsor signature gathering for a different Eyman initiative — Initiative 517. I-517 would have “set penalties for interfering with signature-gatherers or signers.”

Eyman expected the money he paid to Citizens in Charge to be used for I-517. The lawsuit alleges these payments also constitute personal use, and violate state law.

Citizens in Charge did spend the money on signature gathering for I-517. They sent the signatures to another Eyman committee, Protect Your Right to Vote on Initiatives.

The value of these signatures was reported as $182,000.

However, instead of reporting Eyman as the source of the $182,000 in-kind contribution, Eyman directed the committee to report Citizens in Charge as the source.

The lawsuit alleges Eyman concealed the true source of the $182,000, a violation of state law, and caused the committee to file three inaccurate and misleading reports. Each report is a violation.

Under state law, sanctions for campaign finance disclosure violations can include a penalty equal to the amount not reported. If the court finds that the violation was intentional, that penalty can be tripled.

Lamb said the lawsuit boils down to whether two transactions needed to be included on campaign reports.

“The Attorney General believes they should, we do not,” Lamb said.

“From the beginning, Mr. Eyman has made clear he did nothing wrong and the money he received was lawfully earned for the services he provided.”

Comments (0)
If you wish to comment, please login.