How One Man's Gambling Addiction May Have Cost Democrats Control of the State Senate
Michael King's gambling and alcohol addictions cost him everything: his career, his home, his marriage, his friends, and likely his freedom. But that's not all that King gambled away at the blackjack tables.
The quarter of a million dollars King allegedly embezzled from the Washington State Senate Democratic Campaign Committee (SDCC) to feed his gambling habit arguably cost Democrats control of the state senate, and with it, the opportunity to pass major legislation, including the Reproductive Parity Act, the State Dream Act, and a multi-billion-dollar transportation funding package that included desperately needed local taxing authority for King County Metro. While millions of Americans suffer from alcohol, gambling, and other addictions, their personal tragedies tend to remain personal. But thanks to his pivotal role as the SDCC's executive director, King's illness, and the actions it allegedly drove him to, ended up touching the lives of all Washingtonians.
How King's actions could cost you your Metro bus route next June is a complicated story—one made all the more difficult to tell by the fact that nobody remotely close to the case is willing to be named in this article. Charges have yet to be filed, so the results of the criminal investigation are not yet public, and with both criminal proceedings and an anticipated plea deal still pending, King declined to comment for this story (King's attorney is understandably reluctant to let his client talk to the press). A possible civil suit against another individual, the SDCC's former treasurer—and the party infighting that finger-pointing engenders—has further tightened insiders' lips. But through conversations with sources close to King, all of whom declined to be named, plus information gleaned from public records, it is possible to piece together a broad picture of King's alleged embezzlement, the lack of oversight that made it possible, and the political consequences.
According to a February 27 complaint filed by the Washington State Public Disclosure Commission (PDC), the SDCC notified commissioners that it had referred to the King County Prosecuting Attorney's Office "evidence of misappropriation of SDCC campaign funds by Michael King." The PDC conducted its own preliminary review of campaign finance filings through 2012 and early 2013. "These reports disclose numerous expenditures made by the SDCC and the Roosevelt Fund to Michael King as reimbursements for goods and services which, if provided, appear to substantially exceed the reasonable costs of such goods and services," concludes the PDC complaint.
The King County Prosecuting Attorney's Office is currently investigating the case. Charges are expected to be filed by the end of September.
Friends and associates interviewed for this article say that King does not dispute the broad allegation, and sources close to the case believe that he has cooperated with prosecutors. Sources say King has also confided that he has a drinking and gambling problem—one called it a "serious problem"—for which he has sought treatment. According to these associates, King, 32, claims to have a family history of alcoholism and to have struggled with the disease during his teens. King has told sources that he was clean for most of his 20s, but once he fell off the wagon, he fell hard.
King was hired to run the campaign organization that helps elect Democrats to the state senate. Senators raise money to funnel into candidate and independent expenditure campaigns. It was King's job, in theory, to manage fundraising and expenditures in an effort to retain or expand the Democrats' narrow control of the state senate.
He was selected by the SDCC's former cochairs—then state senators Derek Kilmer, Scott White, and Majority Leader Lisa Brown—in March 2011, at a time when all the financial controls and procedures (or lack thereof) that eventually enabled King's embezzlement were already in place. The SDCC's offices were shared with Argo Strategies, the Seattle-based political consulting firm that served both as the committee's treasurer and as a general consultant on various candidate and independent expenditure accounts. And the existing policy by which the executive director would put thousands of dollars of committee business on his personal credit card, before reimbursing himself from two SDCC accounts, was not altered. This was all standard practice at the SDCC, as it was at other committees.
Multiple sources suggest that King's alleged "misappropriation of funds" started as early as the fall of 2011, possibly sooner, but the practice gradually accelerated as King plunged more deeply off the wagon, peaking in a frenzy of questionable reimbursements during the months leading up to and immediately following the 2012 election. According to PDC reports, King wrote himself dozens of checks during this time—$1,500, $3,000, even $5,000 at a time—supposedly to purchase bulk polling minutes (hence the round numbers) from SurveyMonkey, CallFire, MoreMargin, and other automated dialing firms.
During his tenure, King wrote himself more than $300,000 in reimbursement checks, according to records filed with the state, and some of those were surely legitimate. However, sources suggest the alleged embezzlement may have approached $250,000.
But it was King's method that proved doubly devastating: Multiple sources allege that King would cut himself a check, gamble it away at Goldie's Shoreline Casino, and then conjure up polling numbers to justify the expense.
So not only would such an embezzlement deny the SDCC precious funds that might have been used to swing close elections—for example, Democrat Tim Probst lost his 17th Legislative District race to Republican Don Benton by only 74 votes—it seems clear that senate Democrats were sometimes allocating their diminished war chest based on fabricated polling data.
Sources aren't quite sure which polls were real and which were not, but they have their suspicions. One insider recalls an instance in which King allegedly insisted he had a gut feeling about a race, and then produced polling numbers that confirmed his optimistic instincts. Additional money was spent in that race, but the Democratic candidate went on to lose by a wide margin.
Of course, hindsight is hindsight, and there are many factors that influence the outcome of an election, so one can only speculate on how the results might have been different. But there is no question that the combination of King's impaired judgment, his alleged "misappropriation of funds," and the dubious polling data he provided all left senate Democrats operating at a competitive disadvantage during a crucial election cycle: The SDCC was desperate to shore up its fragile majority after three conservative members crossed the aisle on budget issues the previous session.
And the consequences of the SDCC's failure were swift.
Shortly after Probst conceded, leaving Democrats with a bare 26–23 majority, conservative Democrats Rodney Tom and Tim Sheldon announced that they would caucus with the Republicans, flipping control of the state senate by a one-vote margin. Tom seized the senate majority leader post from Ed Murray and subsequently used it to block votes on key legislation. And so when Group Health announced that it would not cover abortion coverage in its new insurance plans (Reproductive Parity Act), or when undocumented immigrant students are denied a college education (State Dream Act), or when Metro starts cutting 600,000 hours of bus service next June (transportation funding package)—at least part of the blame can arguably be placed at King's feet.
Some Democratic insiders are also pointing their fingers at Jason Bennett, the principal partner at Argo Strategies. There are conflicting accounts of how King's actions were uncovered, but it was Bennett, as the SDCC's treasurer, who brought the allegations to the SDCC's attention in February 2013. Critics charge that Bennett was responsible for verifying King's expenses—but that seems to be based on a misreading of the treasurer's role. Argo was contracted to do "treasury and compliance," a campaign job that normally consists of opening and managing bank accounts, and accurately filing all necessary reports and paperwork with government agencies. But Argo's standard contract specifically states that "client will be responsible for the accuracy of all data submitted" to them.
Bennett's accusers also argue that he and his staff should have grown suspicious sooner. But if so, the same could be said of the SDCC's 2012 cochairs: Senators Ed Murray, David Frockt, and Sharon Nelson. In the heat of the campaign, as the SDCC was running low on cash, did they pay zero attention to how King was spending their money? Did they never question his apparent decision to dedicate such a large chunk of their resources to robo-polling?
In an interview with PubliCola, Murray absolved himself of all responsibility, insisting that he "inherited" both King and the existing lax procedures from the previous committee cochairs. "I'm not trying to dump on Derek [Kilmer]," Murray said before dumping on Kilmer and the late Senator White. "Someone gave this guy check-writing authority," accused Murray. "I didn't do that."
You know—the buck stops elsewhere.
Murray later sent his caucus an e-mail apologizing for throwing Kilmer under a bus: "I handled the call miserably," Murray admitted. But he still didn't admit any responsibility for the lack of SDCC oversight.
Of course it is King who deserves most of the blame, but there was also an institutional failure. Within a year of hiring King, White passed away, Kilmer stepped aside to run for Congress, and Brown unexpectedly retired, leaving the SDCC entirely in the inexperienced hands of Frockt, Nelson, and Murray, all of whom presumed their primary function to be fundraising. They may have believed that Bennett was responsible for auditing King, but they don't appear to have read Argo's contract, nor given the matter much thought. And their apparent hands-off approach to the SDCC's expenses only made embezzlement easier.
But the biggest enabler of King's alleged fraud was that everybody liked, respected, and trusted him. Everybody. King and Bennett attended each other's weddings and shared office space—a social and working relationship that likely established problematic boundaries. King had worked for the state Democratic Party, served on the board of the Washington Bus, and helped elect Senator Frockt to office as a political consultant. He was part of the team. And nobody anticipated that he could possibly betray their trust.
But neither did anybody suspect that King is addicted to alcohol and gambling. And you just can't trust a person in the depths of addiction.
Sources say that King is now living in a sober house and busing tables at a local restaurant as he awaits a sentence that will almost certainly include a term in prison. And state Democrats are left wondering what might have been.
This article has been updated since it was first published.