State law is clear: If you use money from one initiative campaign to fund another initiative campaign, you have to report it to the state. Thems the rules. But it appears that the campaigns for Tim Eyman's two statewide initiatives this year may have flouted those rules, in what could turn out to be one of the most egregious campaign-disclosure violations since voters approved the Public Disclosure Act in 1972.
Documents, interviews, and affidavits shared with The Stranger are beginning to bring to light what appears to have been a secret, unreported effort to pay for signatures on Initiative 517 (Eyman's under-the-radar pet project to make initiatives easier to run) using money from the campaign for Initiative 1185 (Eyman's effort to continue restricting the legislature's ability to raise taxes).
Both initiatives are part of Eyman's long-running, right-wing-backed effort to lure voters with appealing ideas that, in the long haul, have crippled the state's budget, decimated social services, and cut off health care services for the poor. And both petition drives were contracted through Citizen Solutions, LLC, the firm Eyman hires to collect signatures for all of his initiatives.
But one of the measures, I-1185, had $1.3 million of corporate money behind it while the other, I-517, had zilch. That suggests a possible motive for the apparent diversion of funds: the need to pay for Eyman's pet initiative somehow. But if that's what transpired—if money intended for I-1185 was used to fund I-517—then Eyman could be facing something even worse than a fine from the Washington State Public Disclosure Commission (PDC). He could be facing the loss of the wealthy backers who have been financing his initiatives since grassroots contributors abandoned him a decade ago.
Eyman has been in trouble with the PDC before. He paid a $50,000 fine in 2002 to settle charges that he diverted hundreds of thousands of dollars of campaign donations for personal use, and he was banned from ever controlling another campaign financial account. Now the PDC is investigating a complaint filed August 20 by Sherry Bockwinkel (an Eyman nemesis and an early pioneer of Washington's paid-signature-gathering industry) that alleges the I-517 campaign has failed to file accurate PDC reports. But the initial complaint and supporting documents only hint at the larger potential allegation: an apparent scheme to use the substantial assets of the I-1185 campaign to covertly pay for signatures on I-517, a campaign that has yet to report a single dime of cash contributions.
Eyman wouldn't comment for this story, but if the allegations laid out in a recent PDC complaint prove true, he could wind up in an untenable spot, with pissed-off big-money backers, no grassroots supports, no credibility, no one left to finance his initiatives, and—as a result—no more Tim Eyman.
A Condition of Employment
While Citizen Solutions was always careful to describe the I-517 petition drive as a "volunteer" effort, e-mails and other communications from the firm repeatedly made clear to I-1185 circulators that bringing in equal numbers of both petitions was a condition of employment. "If you don't bring in equal numbers you are fired... watch me," Citizen Solutions co-owner Eddie "Spaghetti" Agazarm threatened I-1185 signature gatherer Steve Burdick in an April 9, 2012, e-mail.
Burdick says Agazarm also told him he would be "blackballed" if he didn't collect I-517 signatures, an account corroborated by subcontractor Rick Walther of Petition Management Services in a separate complaint e-mailed August 21 to the Washington State Department of Labor & Industries. "If your circulators don't get equal numbers on I-517 and I-1185, you fire their fucking asses," Walther claims that Agazarm instructed him.
If circulators were paid to collect signatures for I-1185, but were required to bring in equal numbers of I-517 as part of their job, then it seems they were de facto paid to collect signatures for I-517.
According to Burdick, Walther and other subcontractors were in fact fired after I-1185 circulators rebelled against demands to collect I-517 signatures for "free," but that didn't stop them from doing work on petition drives.
I-1185 Funds Apparently Paid for I-517 Signatures
Both Walther and Burdick say they were eventually paid for I-517 signatures collected from April through June, and they have produced invoices and cashed checks to back up their claims. Neither, though, was paid directly by Citizen Solutions, which no longer employs signature collectors.
Instead, Citizen Solutions works through multiple levels of subcontractors. For example, Burdick claims he was paid 75 cents per I-517 signature by Rob Harwig of Peoples Petition, LLC, a firm contracting directly with Citizen Solutions, and registered at the same Spokane address. A cashed check is dated May 19. According to invoices, Walther's firm, Petition Management Services, was ultimately paid 50 cents per I-517 signature through Evergreen Petition Management. Evergreen, Burdick says, subcontracted through Harwig's Peoples Petition.
That's five degrees of separation between Eyman and the circulators who worked for Walther, a convoluted path of nested business relationships that could confound PDC investigators' efforts to trace culpability back to the top.
But according to Walther, Agazarm knew what was going on. "I received a call from [Agazarm]," Walther wrote in his e-mail to L&I, "stating that some of the other managers had agreed to pay less per signature on I-1185 so that they could pay something on I-517."
The I-1185 campaign paid Citizen Solutions. Citizen Solutions paid subcontractors. Subcontractors paid for I-517 signatures. It is reasonable to conclude that I-1185 campaign funds were used to pay for I-517 signatures.
Initiative campaign committees are permitted to make unlimited in-kind contributions to other initiative campaign committees, but neither committee has reported such contributions. Indeed, the only transaction reported by the I-517 campaign during this period was a $4,444.38 in-kind contribution from Agazarm for printing petitions, recorded June 29. I-517 petitions had been in the hands of paid signature collectors since mid-April.
The failure to disclosure may violate Washington's campaign finance laws.
"Gathering signatures to petition the legislature is actually grassroots lobbying," explains the PDC's Lori Anderson. Disclosure is triggered at $500 in expenditures a month, or $1,000 over three consecutive months, a threshold the I-517 campaign would have quickly surpassed on Walther's invoices alone. Anderson says that organizers are required to start reporting within 30 days of reaching that threshold, either through a grassroots lobbying report or through a campaign committee.
As of press time, I-517's backers have filed neither.
It's not just the PDC that Eyman and his cohorts need to be worried about. The Association of Washington Business (AWB) paid $450,000 directly to Citizen Solutions as an in-kind contribution to I-1185. "We were not aware that monies paid to Citizen Solutions might be used to gather signatures for I-517," says AWB's Jocelyn McCabe. Indeed, many of the corporations funding I-1185 may oppose I-517. If Eyman's backers become convinced that they were so shamelessly deceived, they may never trust him with their money again.
Neither Eyman nor Agazarm have responded to requests for comment, but it beggars the imagination to think that culpability doesn't rise all the way up to the top.
And if the PDC does its job, we'll soon find out.