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.
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:
- 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.
- 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.
- 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.
- 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.
- 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.)
- 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 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.