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Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, June 25th, 2015

Tim Eyman’s paid signature drive for I-1366 is done — so why is he still fundraising for it?

For the past four days, initiative promoter Tim Eyman has been sending out daily emails asking his followers to give generously so he can make a final payment to his associates to finish the signature drive for Initiative 1366, his latest attempt to sabotage Washington’s cherished tradition of majority rule.

I-1366, as regular readers will recall, is a do-over of last year’s I-1325, which didn’t qualify. It would slash the state sales tax by next April, resulting in the loss of about $1 billion a year, unless, by that time, the Legislature has passed a constitutional amendment permanently requiring a two-thirds vote to raise revenue.

“It’s crunch time — initiatives don’t qualify unless there’s a big surge in donations and signatures at the end,” Eyman declared in an email sent Monday, June 22nd.

“We are agonizingly close to qualifying,” he added. “We just need everyone to help raise the money necessary to collect the required signatures. We’ve worked too hard and invested too much to fall short now. Please help us make it happen.”

The next day, June 23rd, Eyman was more explicit in his appeal for money.

“On day one, I took out a 2nd mortgage on my home and loaned the campaign $150,000,” Eyman wrote in his Tuesday email.

“Why? So we could immediately contract with a professional signature gathering firm to supplement our volunteers. For months, they’ve been out there asking voters throughout the state to sign petitions for I-1366. Our final payment of $100,000 for their services is due one week from tomorrow — on July 1st.”

Yesterday and today, Eyman sent follow-up emails thanking six followers who have stepped forward to answer his call – and pleading for more followers to do likewise.

What’s missing from all of these Eyman emails is the truth about the I-1366 signature drive. By comparing what Eyman is saying with Public Disclosure Commission data and the field intelligence we’ve gathered, we can see the details he’s conveniently leaving out. And sadly, the evidence demonstrates that Eyman is once again duping his own followers — presumably for personal profit.

Here is what we know about the I-1366 signature drive, its costs, and its timeframe:

  • In February, Eyman announced that he was taking out a second mortgage on his house to “jumpstart” a signature drive for I-1366.
  • Not long after, we began receiving reports of petitioners collecting signatures for the initiative. For about the first six weeks of the drive, compensation was seventy-five cents per signature, which isn’t particularly high.
  • In March, Eyman’s treasurer filed reports with the PDC showing the loan, initial payments to Citizen Solutions, and a big infusion of cash from a new wealthy benefactor, Clyde Holland, and an old one, Kemper Freeman Jr.
  • In April, a second round of reports showed another massive infusion of cash, with another big check from Holland accounting for much of that. Six weeks into the drive, petitioners began receiving compensation of $1.25 per signature, up from seventy-five cents.
  • In May, a third round of reports revealed that Eyman had raised nearly a million dollars for I-1366, not counting his loan to himself. For the final weeks of the drive, petitioners were receiving compensation of $1.50 a signature.
  • Earlier this month, the paid signature drive for I-1366 came to an end, presumably because Eyman has the signatures he needs to qualify. The most recent PDC reports, filed June 9th, show that a total of $1 million ($1,000,000 exactly) has been transferred to Citizen Solutions since February.

Here is a list of all reported payments to Citizen Solutions so far by Eyman’s campaign committee, which is a new incarnation of Voters Want More Choices (VWMC). Note that it is ordered by the amount of the payment, not the date.

CITIZENS SOLUTIONS2015-03-30 (Mar)$300,000
CITIZENS SOLUTIONS2015-03-02 (Mar)$150,000
CITIZENS SOLUTIONS2015-02-03 (Feb)$150,000
CITIZENS SOLUTIONS2015-03-05 (Mar)$100,000
CITIZENS SOLUTIONS2015-05-06 (May)$100,000
CITIZENS SOLUTIONS2015-05-01 (May)$50,000
CITIZENS SOLUTIONS2015-05-11 (May)$50,000
CITIZENS SOLUTIONS2015-05-22 (May)$50,000
CITIZENS SOLUTIONS2015-04-10 (Apr)$50,000

Total: $1,000,000

Now, let’s do some math. If we were correctly informed about petitioners being paid $0.75, $1.25, and $1.50 during the drive (an average of $1.17), and if the laborers Eyman’s taking advantage of gathered around 320,000 signatures before stopping (which is all that’s needed), then an amount somewhere in the neighborhood of $374,000 went to compensate petitioners for their labor.

Whatever signatures Eyman’s associates don’t discard will be submitted to the Secretary of State by July 2nd, and those will be counted. So, in a mater of days, we’ll have an exact figure. It stands to reason that Eyman & Co. aren’t going to pay petitioners for signatures Eyman doesn’t need, and isn’t going to submit.

Even if we assume a cost of $1.50 per signature (the highest reported rate) for the duration of the entire drive, that still works out to less than half a million dollars for the petitioners’ labor (again, assuming payment for around 320,000 signatures).

We also have to account for what is known in this underground industry as override costs. The “override” is what’s paid to coordinators like John Michael and Brent Johnson, who collect sheets from the petitioners. We understand the typical override is between twenty-five and fifty cents per signature; it varies by volume. If the override was fifty cents, then that adds around $160,000 in overhead.

Some additional funds might have been spent bringing in out of state labor from California or elsewhere, because veteran local petitioners are reluctant to carry Eyman petitions after having been cheated on their payments in the past by Eyman and his associates. But bus tickets for a few dozen individuals don’t cost that much.

So where did the rest of the million dollars go?

We can only assume that Ruffino and Agazarm pocketed it as profit. And perhaps Eyman is getting a kickback from them in the form of a profit-sharing arrangement. We can’t be sure, because we can’t verify the money trail beyond the payments to Citizen Solutions. But we know that Eyman and his associates love to make money. This is a business for them. A lucrative business and a shady business.

An aboveboard business would comply with federal and state worker protection laws, paying worker’s compensation premiums and taxes that can amount to 15% of the wages paid to their employees. But no reports have been filed with the Internal Revenue Service or the Department of Labor & Industries by Citizen Solutions demonstrating that these laws are being complied with and the petitioners protected. Their coordinators (John Michael and Brent Johnson) haven’t filed employee payroll reports either, and the first quarter payments are past due.

Ruffino and Agazarm are certainly being paid well enough to take care of the people who are working them. They’re also being paid well enough to afford to hire a good accountant who could manage their payroll and L&I account for them. But they’d rather operate an underground cash business than play it straight.

The email campaign Eyman launched this week makes it sound like Eyman and his associates are in a sprint to the finish, frantically trying to gather enough signatures in time to meet the deadline stipulated by the Washington State Constitution for statewide initiatives to the people.

But we know that’s not true. From looking at our field intelligence, we can conclude that the paid signature drive for I-1366 is over.

Reports filed by Eyman’s own treasurer show his campaign committee has already transferred more than twice the amount of money needed to compensate petitioners for 320,000 signatures, which, again, is all that’s needed. Why does Eyman need to send Agazarm and Ruffino another $100,000?

It is worth noting that this isn’t the first time that Eyman has inflated the cost of a signature drive. Prior to 2015, the last time that Eyman did a paid signature drive with Roy and Eddie was in 2012, when he qualified I-1185 as an initiative to the people while at the same time running a stealth signature drive for a second initiative, I-517. I-517 was an initiative to the Legislature; it later appeared on the November 2013 ballot and was overwhelmingly defeated by voters.

As with I-1366, Eyman raised over $1 million to qualify I-1185 to the statewide ballot, and transferred most of that to Citizen Solutions for signature gathering expenses. Most of the money for I-1185 came from large corporations like BP and ConocoPhillips, but smaller companies gave as well. (I-1185 was Eyman’s most recent I-601 clone. It attempted to require a two-thirds vote to raise revenue, but this scheme was struck down by the state Supreme Court in February 2013.)

The Association of Washington Business (AWB) acted as Eyman’s bundler during the I-1185 campaign, and even paid out large chunks of Citizen Solutions directly, without going through Eyman’s campaign committee.

What the AWB didn’t know was that the actual cost to run the signature drive was much less than $1 million. How do we know that? Because we know how many signatures were submitted, and we know what the petitioners were paid:

Most of the money that went to Citizen Solutions to pay for I-1185 signatures did not go to the petition crews. It was pocked by Ruffino and Agazarm (and possibly Eyman as well) as profit. Miles and Steve [petitioners who worked on the campaign] have testified in sworn affadivits that they were being paid a dollar per signature, and we know that other petitioners were collecting for the same level of compensation. The Secretary of State’s office reported last July that 320,003 signatures were submitted for I-1185. If each signature cost Ruffino and Agazarm a dollar, that would mean the cost of the signature drive was around $320,000.

For argument’s sake, let’s assume the total costs of the signature drive actually came to $1.25 a signature. That’s more than what the petitioners were being paid, but it allows us to suppose there may have been other costs associated with the signature drive.

If we multiply $1.25 by 320,003, we get $400,003.75. That still leaves more than $700,000 unaccounted for.

What happened to all of that money? Where did it go? We know it didn’t go to the workers who gathered signatures outside of shopping malls, stadiums, and ferry terminals. We can only conclude it was pocketed as profit.

The affadivits mentioned in the excerpt above were submitted to the Public Disclosure Commission as part of a complaint filed by activist Sherry Bockwinkel of Tacoma in August of 2012. While the I-517 stealth signature drive was still underway, she noticed that a number of things didn’t add up, and filed a complaint with the PDC alleging that the stealth campaign was being illegally run.

It’s been nearly three years since that complaint was filed, and over two years since the PDC confirmed it would look into it, but it’s still unresolved.

When asked about the status of the case, PDC staff will only say that the investigation is still open and that complaints can take time to resolve.

Is it any wonder Eyman thinks he can get away with continually duping his own followers? His past wrongdoing keeps getting overlooked or ignored. We regularly talk about it here, and occasionally, so do bigger media outlets.

But it has not led to any action on the part of the PDC.

The only time the PDC ever really went after Eyman was in 2002, after he admitted taking over $100,000 in campaign money for his own personal use and lying about it. The PDC referred that case to Attorney General Chris Gregoire. Gregoire took Eyman to court, but decided the next year to settle the lawsuit for $50,000 and the stipulation that Eyman never again serve as a campaign treasurer.

As we have seen, Eyman does not need to be his own treasurer to continue profitably operating his initiative factory. Eyman was off the ballot for only one year after getting caught with his hand in the cookie jar. Then he was back in business. Last year was just the first time since 2003 that Eyman didn’t have enough money to make the statewide ballot with the scheme that he tried to qualify.

(He also failed to qualify anything in 2006, though that was due to mismanagement, incompetence, or a combination of both, not lack of funds.)

The people of Washington have increasingly begun to realize that Eyman is a snake oil salesman. Over the last ten years, the voters have defeated nearly every Eyman initiative that had a well-organized, vigorous opposition campaign.

Unfortunately, Eyman keeps getting on the ballot, because he’s managed to persuade a whole bunch of wealthy conservatives that he walks on water. And those are the people who really matter to Eyman. They’re the ones with the money.

Eyman and his associates are the only people deriving any benefit from his initiative factory. They’re the winners in this long-running, fifteen-year con.

The rest of us, including Eyman’s own followers, are the losers. Whether they realize it or not, they’re helping to make us all poorer. So long as Eyman’s benefactors keep patronizing him, and so long as the state continues to allow his wrongdoing to go unpunished, Eyman will stay in business, profiting from greed.

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