NPI's Cascadia Advocate

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.

Saturday, September 5th, 2015

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.

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One Ping

  1. […] (Eyman has also neglect­ed to men­tion to his fol­low­ers that he’s been ordered to appear in court after hav­ing failed to prompt­ly turn over records sub­poe­naed by the Pub­lic Dis­clo­sure Com­mis­sion as part of its inves­ti­ga­tion into his I‑517 cam­paign.) […]