State attorneys go after Tim Eyman’s bank records to help PDC finish I‑517 investigation

Late Thurs­day night, just a few hours before the Wash­ing­ton State Supreme Court released its order allow­ing Ini­tia­tive 1366 to pro­ceed to the Novem­ber 2015 bal­lot, The Her­ald of Everett pub­lished a remark­able sto­ry break­ing the news that state author­i­ties are final­ly, final­ly tak­ing action to com­plete the stalled inves­ti­ga­tion into Tim Eyman’s cam­paign to qual­i­fy Ini­tia­tive 517 from 2012.

I‑517, Cas­ca­dia Advo­cate read­ers may recall, was Eyman’s “ini­tia­tive on ini­tia­tives”. Eyman and his asso­ciates ran the sig­na­ture dri­ve for I‑517 three years ago in stealth mode (mean­ing they did­n’t pro­mote the ini­tia­tive to the press, or even clue in Eyman’s own fol­low­ers). At the time the dri­ve began, Eyman was also try­ing to qual­i­fy I‑1185 (the last of his I‑601 clones) to the ballot.

Eyman and his bud­dies Eddie Agazarm and Roy Ruffi­no came up with the idea to pig­gy­back I‑517 on top of I‑1185. Their goal with I‑517 was to change state law to make it eas­i­er and cheap­er for them to qual­i­fy ini­tia­tives to the bal­lot in the future, so that their shared busi­ness could become more profitable.

Peti­tion­ers who had been hired to col­lect sig­na­tures for I‑1185 (a mea­sure uncon­sti­tu­tion­al­ly requir­ing a two-thirds vote to raise rev­enue) were instruct­ed to also col­lect sig­na­tures for I‑517… with­out being pro­vid­ed com­pen­sa­tion. Peti­tion­ers who balked at this arrange­ment were told to com­ply, or else be fired.

We know this because we talked to peti­tion­ers who worked on the cam­paign. We also have copies of Agazarm’s cor­re­spon­dence with peti­tion­ers and peti­tion crew chiefs. In one of these mes­sages, dat­ed April 18th, 2012, Agazarm tried to jus­ti­fy the pol­i­cy of requir­ing peti­tion­ers to col­lect sig­na­tures for I‑517 with­out com­pen­sa­tion by telling his crew chiefs the following:

Some­body said that they’d have to be ask­ing their peo­ple to work I‑517 for free. That is def­i­nite­ly not the case as ALL peti­tion­ers and ALL man­agers will get paid very hand­some­ly once I‑517 pass­es. Think of the extra mon­ey we ALL make when we can work big turf ALL the time. Think of the mon­ey we can ALL make when we have peti­tion­ing year round. Think of all the extra peti­tions we can car­ry. Oh… we are gonna get paid for sure.

I‑517, how­ev­er, did not pass. We at NPI worked incred­i­bly hard to help orga­nize the coali­tion that fought I‑517. And we were suc­cess­ful: I‑517 went down to defeat in a land­slide, with 62.71% of Wash­ing­ton vot­ers vot­ing no.

Mid­way through the I‑517 sig­na­ture dri­ve, vet­er­an activist Sher­ry Bock­winkel of Taco­ma (a sig­na­ture gath­er­ing pro who now runs a lamp repair busi­ness) real­ized that the stealth I‑517 sig­na­ture dri­ve was being run in vio­la­tion of Wash­ing­ton’s pub­lic dis­clo­sure laws. On August 20th, 2012, she filed a com­plaint with the Pub­lic Dis­clo­sure Com­mis­sion. It took over six months for the PDC to review the com­plaint and for­mal­ly reply, but in the spring of 2013, the PDC final­ly wrote back and said it would launch an inves­ti­ga­tion. That inves­ti­ga­tion con­tin­ues today.

The PDC has a pol­i­cy of not say­ing much about inves­ti­ga­tions that are active. Staff sim­ply don’t like to com­ment until they are done with their work.

That’s under­stand­able, but it has been frus­trat­ing to watch months and years go by with no indi­ca­tion of progress. The PDC has a very small staff and lim­it­ed resources, so its abil­i­ty to prompt­ly and thor­ough­ly inves­ti­gate com­plaints is par­tial­ly depen­dent on respon­dents’ will­ing­ness to cooperate.

In this case, how­ev­er, the respon­dents are Tim Eyman and his asso­ciates, who have a his­to­ry of slop­py, care­less report­ing and dis­re­gard for the law. They’ve been less than forth­com­ing in response to the PDC’s requests for infor­ma­tion. That has led the PDC to ask Attor­ney Gen­er­al Bob Fer­gu­son’s office for help.

And so, more than three years after the fil­ing of Sher­ry Bock­winkel’s com­plaint, we are now at the point where state attor­neys are fil­ing motions in court in an attempt to find out the truth and com­pel Eyman’s coop­er­a­tion. As The Her­ald report­ed:

State attor­neys went after Tim Eyman’s bank records Thurs­day as they inves­ti­gate whether he alleged­ly helped move mon­ey among two ini­tia­tive cam­paigns in 2012, earn­ing tens of thou­sands of dol­lars in the process.

A motion filed in Sno­homish Coun­ty Supe­ri­or Court seeks to com­pel the Muk­il­teo res­i­dent to turn over records to the Pub­lic Dis­clo­sure Commission.

It’s try­ing to deter­mine if a series of trans­ac­tions involv­ing Eyman and a sig­na­ture-gath­er­ing firm vio­lat­ed any elec­tion laws.

The PDC has been seek­ing the records since Decem­ber 2013. Eyman has been ordered to appear in court Sept. 22 to respond.

Eyman declined to com­ment Thurs­day, but he pre­vi­ous­ly tes­ti­fied under oath that he did noth­ing wrong.

The Seat­tle Times report­ed yes­ter­day evening that a sim­i­lar motion has also been filed by the state in Thurston Coun­ty Supe­ri­or Court.

Eyman is rep­re­sent­ed by Both­ell attor­ney Mark Lamb, who has been speak­ing to the mass media on Eyman’s behalf regard­ing the inves­ti­ga­tion (first to The Her­ald’s Jer­ry Corn­field, and then to The Seat­tle Times’ Joseph O’Sullivan).

There’s only one Mark Lamb reg­is­tered to vote in Both­ell, so we pre­sume it’s the same Mark Lamb who serves on the Both­ell City Coun­cil and got into trou­ble him­self — coin­ci­den­tal­ly the same year Bock­winkel’s com­plaint was filed.

(Lam­b’s trou­ble stemmed from a mul­ti-year extra­mar­i­tal affair he had with an employ­ee of his North Creek law firm, Micaela Mae, who wound up suing him in Sno­homish Coun­ty Supe­ri­or Court for lost wages.)

Lamb claims that Eyman has been coop­er­a­tive, but we don’t believe that. If Eyman has tru­ly been coop­er­a­tive, why is the inves­ti­ga­tion still open after two and a half years? Why is the Attor­ney Gen­er­al’s office fil­ing motions in court on the Pub­lic Dis­clo­sure Com­mis­sion’s behalf seek­ing his com­pli­ance? It does­n’t add up.

Eyman has refused to com­ment about the case him­self, though he did ear­li­er give a depo­si­tion in which he claimed to have done noth­ing wrong. Of course, Eyman has a pen­chant for fib­bing, lying, dis­tort­ing, and fab­ri­cat­ing, so we’re not inclined to believe any­thing he says, regard­less of whether he was under oath or not.

Here is what we think hap­pened back in 2012, based on the evi­dence that we have, and the new pieces of infor­ma­tion revealed by the state’s recent court filings:

• Dur­ing the first half of 2012, Tim Eyman per­suad­ed Don Brunell and the Asso­ci­a­tion of Wash­ing­ton Busi­ness (AWB, the state’s cham­ber of com­merce) to once again act as his cam­paign bundler and sup­ply him with mon­ey so he could qual­i­fy anoth­er I‑601 clone to the Wash­ing­ton State bal­lot. They did.
• Eyman delib­er­ate­ly request­ed or insist­ed on receiv­ing far more mon­ey than he actu­al­ly need­ed, fig­ur­ing that the busi­ness com­mu­ni­ty would sim­ply pony up what­ev­er he said was the min­i­mum amount required, allow­ing him to hand­some­ly prof­it. In the end, $1,173,324.99 was expensed for sig­na­ture gath­er­ing. Less than half of that mon­ey was actu­al­ly used to pay petitioners.
• At the same time that they was attempt­ing to qual­i­fy I‑1185, Eyman, Agazarm, and Ruffi­no con­spired to qui­et­ly launch a sec­ond sig­na­ture dri­ve for a sec­ond ini­tia­tive, I‑517, that they hoped would make it eas­i­er and cheap­er for them to qual­i­fy ini­tia­tives to the statewide bal­lot going forward.
• The trio delib­er­ate­ly kept AWB and I‑1185’s oth­er con­trib­u­tors in the dark about this sec­ond sig­na­ture dri­ve, neglect­ing to men­tion that they were pig­gy­back­ing I‑517 on top of I‑1185.
• At first they tried to get their peti­tion­ers to col­lect I‑517 sig­na­tures in addi­tion to I‑1185 sig­na­tures with­out being com­pen­sat­ed. Peti­tion­ers who balked were told they’d be fired if they did­n’t com­ply. Even­tu­al­ly, the trio decid­ed to stop pay­ing a dol­lar for an I‑1185 sig­na­ture and start pay­ing sev­en­ty-five cents for an I‑1185 sig­na­ture and twen­ty-five cents for an I‑517 signature.
• After the I‑1185 dri­ve end­ed, the trio need­ed resources to keep it going. So they plowed a frac­tion of the sig­nif­i­cant prof­its they had made from the sig­na­ture dri­ve into the I‑517 dri­ve through an inter­me­di­ary: Paul Jacobs’ Cit­i­zens in Charge out­fit, based out of Vir­ginia. Cit­i­zens in Charge then turned around and gave the mon­ey back to help qual­i­fy I‑517.

It seems Eyman arranged to trans­fer mon­ey to Cit­i­zens in Charge so he and Agazarm could mask the source of the funds. They want­ed it to appear as though they were get­ting help exter­nal­ly for I‑517, when in real­i­ty, they were sim­ply using a por­tion of the sur­plus mon­ey from the I‑1185 effort.

We have long sus­pect­ed that Eyman receives kick­backs from his bud­dies at Cit­i­zen Solu­tions. And now we know it’s true. From The Her­ald’s report­ing:

In July 2012, [Cit­i­zen Solu­tions] paid $308,000 to Eyman through a cor­po­ra­tion he set up, Watch­dog for Taxpayers.

That same month Eyman loaned $190,000 to Cit­i­zens in Charge, a Vir­ginia orga­ni­za­tion that sup­ports ini­tia­tives around the coun­try. The group wound up under­writ­ing the entire cost of gath­er­ing sig­na­tures for I‑517.

Nei­ther the pay­ment nor the loan was report­ed to the Pub­lic Dis­clo­sure Com­mis­sion, accord­ing to court documents.

Eyman told PDC inves­ti­ga­tors in a July 2014 depo­si­tion that Cit­i­zen Solu­tions was pay­ing him to help find new clients for the firm in the future.

And he said he loaned the mon­ey to Cit­i­zens in Charge because he want­ed to help the Vir­ginia orga­ni­za­tion achieve its goals. He said he did­n’t know the leader of the group, Paul Jacob, intend­ed to use the mon­ey to sup­port I‑517.

“My LLC loaned Cit­i­zens in Charge mon­ey and what they did with that mon­ey after­wards I did­n’t have any con­trol over that,” he said in his deposition.

Uh huh. What a tan­gled, dark mon­ey web this is…

So, just to reit­er­ate, this is how the rack­et works:

1. Tim Eyman cooks up a scheme for an ini­tia­tive and pitch­es that scheme to any rich right wing donors or prospec­tive wealthy bene­fac­tors that he can find.
2. His writ­ten pitch, or prospec­tus (see an exam­ple of one here), con­tains a dol­lar amount that Eyman claims is the min­i­mum amount of mon­ey required to get the ini­tia­tive on the bal­lot. In real­i­ty, this is just an invent­ed number.
3. Return­ing or poten­tial new bene­fac­tors make the mis­take of trust­ing Eyman and assum­ing he’s an expert at qual­i­fy­ing ini­tia­tives, because he’s qual­i­fied so many. They’re not aware of the true eco­nom­ics of sig­na­ture gathering.
4. Eyman secures pledges and col­lects the mon­ey required to seed the sig­na­ture dri­ve. He trans­fers the mon­ey from his polit­i­cal action com­mit­tee, or PAC, to Cit­i­zen Solu­tions, in the form of sev­er­al large payments.
5. Cit­i­zen Solu­tions sets aside enough mon­ey to pay peti­tion­ers and peti­tion crew chiefs for their labor. (It is worth not­ing that Cit­i­zen Solu­tions treats its labor­ers like inde­pen­dent con­trac­tors, and does not both­er to com­ply with Wash­ing­ton’s work­er pro­tec­tion laws, as it ought to.)
6. The remain­der of the mon­ey expensed for the sig­na­ture dri­ve is pock­et­ed by Ruffi­no, Agazarm, and Eyman as prof­it, with Eyman get­ting his cut in the form of a kick­back, appar­ent­ly paid out to a dum­my corporation.

We saw this rack­et in action again this year as Eyman qual­i­fied I‑1366, just as we saw it in action in 2012 when Eyman qual­i­fied I‑1185 and I‑517.

We know what the true costs of Eyman’s sig­na­ture dri­ves are because we’ve tak­en the trou­ble to famil­iar­ize our­selves with the ways of the sig­na­ture gath­er­ing industry.

We can esti­mate what the true costs of an Eyman sig­na­ture dri­ve are by find­ing out how much the sig­na­ture gath­er­ers are being paid (it’s always per sig­na­ture) and then mul­ti­ply­ing that by the amount of sig­na­tures the Sec­re­tary of State counts on Eyman’s sub­mit­ted peti­tions. Then we fac­tor in what the crew chiefs were paid. This is known in the indus­try as the over­ride. Once we’ve cal­cu­lat­ed those fig­ures, we’ve account­ed for the vast major­i­ty of the dri­ve’s actu­al costs.

We sub­tract the actu­al costs from what was expensed to Cit­i­zen Solu­tions by Eyman’s PAC (doc­u­ment­ed in PDC reports), and then we have a pret­ty good idea of what was left over and pock­et­ed by Eyman & Co. as profit.

In 2012, Eyman used some of his sig­na­ture dri­ve prof­its to “loan” his friend Paul Jacob mon­ey… mon­ey that Jacob turned around and prompt­ly con­tributed to the I‑517 cam­paign. As men­tioned in the above excerpt from Jer­ry Corn­field­’s report, Eyman claims he did­n’t know Jacob was going to turn around and use the mon­ey he gave him to help qual­i­fy I‑517. We don’t believe that for a second.

We do believe, how­ev­er, that a full foren­sic audit of Eyman’s books and bank records would reveal the extent to which he has prof­it­ed from his ini­tia­tive fac­to­ry, bro­ken the law, and duped his own fol­low­ers along the way.

The evi­dence we have sug­gests that Eyman and his asso­ciates com­mit­ted seri­ous vio­la­tions of Wash­ing­ton’s pub­lic dis­clo­sure law in the process of qual­i­fy­ing I‑517. For that, they should be severe­ly pun­ished, espe­cial­ly con­sid­er­ing that Eyman is a repeat offend­er who has bro­ken the law before. We hope that the involve­ment of the Attor­ney Gen­er­al’s office will help PDC staff bring this case to a final con­clu­sion. We’ll be keep­ing a close eye on it, and will let read­ers know what hap­pens next.