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.

Wednesday, December 26th, 2018

Tim Eyman’s bankruptcy is stalling AG Bob Ferguson’s case against Eyman — as intended

The Dai­ly Her­ald of Everett’s astute polit­i­cal reporter Jer­ry Corn­field has, like our team at NPI, been mon­i­tor­ing the devel­op­ments in the main State of Wash­ing­ton v. Tim Eyman case for sev­er­al years now. Today, Jer­ry has has an impor­tant update on how that law­suit has been affect­ed by Tim Eyman’s recent bank­rupt­cy fil­ing:

The Muk­il­teo res­i­dent filed for Chap­ter 11 bank­rupt­cy Novem­ber 28 to pro­tect per­son­al assets as he defends him­self against alle­ga­tions of vio­lat­ing state cam­paign finance laws. He denies wrong­do­ing.

The move stopped state attor­neys in their tracks in the high-pro­file case. Under fed­er­al law, a bank­rupt­cy fil­ing trig­gers an auto­mat­ic stay of civ­il pro­ceed­ings against a debtor.

They had to can­cel a depo­si­tion with Eyman. And they can­celed depo­si­tions of broth­ers Mike and Jack Fagan, Eyman’s long­time polit­i­cal part­ners, which had been slat­ed for Decem­ber 6 in Spokane, accord­ing to pub­lic records obtained by The Dai­ly Her­ald. Devel­op­ers Kem­per Free­man and Clyde Hol­land and investor Ken Fish­er — three of the largest donors to Eyman-led ini­tia­tives — also had been lined up for depo­si­tions in Decem­ber, records show.

Long­time read­ers will recall that Attor­ney Gen­er­al Bob Fer­gu­son’s office has filed a total of four law­suits against Eyman and his asso­ciates for vio­lat­ing our pub­lic dis­clo­sure laws. The first three were filed in Sep­tem­ber of 2016 (all on the same day), and the fourth was filed in March of 2017.

It is the fourth case that has drawn the mass medi­a’s inter­est and gen­er­at­ed occa­sion­al front page head­lines in news­pa­pers (such as when Eyman was held in con­tempt of court for fail­ing to turn over doc­u­ments).

This fourth case stems from Eyman’s con­duct in 2012, when he used mon­ey donat­ed for one ini­tia­tive (I‑1185) to qui­et­ly fund a sig­na­ture dri­ve for a sec­ond, unre­lat­ed ini­tia­tive (I‑517) and helped him­self to a large chunk of the mon­ey that donors thought would be used for sig­na­ture gath­er­ing for that first ini­tia­tive.

The staff of the Pub­lic Dis­clo­sure Com­mis­sion inves­ti­gat­ed Eyman’s con­duct over the course of sev­er­al years — hin­dered at every turn by Eyman’s stonewalling.

In Sep­tem­ber of 2015, the PDC unan­i­mous­ly con­clud­ed Eyman broke the law, find­ing “mul­ti­ple appar­ent vio­la­tions”, and referred the mat­ter to Attor­ney Gen­er­al Bob Fer­gu­son for fur­ther action. The Attor­ney Gen­er­al’s office then began its own inves­ti­ga­tion. A year and a half lat­er, the inves­ti­ga­tion became a law­suit in Supe­ri­or Court, and that law­suit will soon be two years old in a few months.

The long time­frame is most­ly Eyman’s doing; stonewalling in the extreme has been his legal defense strat­e­gy since even before the fil­ing of the law­suit.

But Eyman — a shame­less man if ever there was one — has nev­er­the­less tried to por­tray him­self the vic­tim of a “witch hunt” by Attor­ney Gen­er­al Bob Fer­gu­son, char­ac­ter­iz­ing the law­suit as a “six year per­se­cu­tion” of him and his fam­i­ly.

The truth, how­ev­er, is that Eyman’s wrong­do­ing is his own fault, as is the longevi­ty of the case, which Eyman has pur­pose­ly dragged out in an attempt to evade jus­tice and post­pone his day of reck­on­ing. Eyman’s stonewalling tac­tics have been described at length by the state in its many Supe­ri­or Court fil­ings.

Eyman seems to be oper­at­ing under the the­o­ry that if he stalls long enough, the case against him will sim­ply go away, van­ish­ing into a legal abyss. How­ev­er, that has not hap­pened… which has made him very bit­ter and angry indeed.

Fil­ing for bank­rupt­cy and divorce last month appears to be Eyman’s lat­est stalling maneu­ver, intend­ed to buy Eyman time to mount a polit­i­cal come­back in 2019.

As not­ed above, a bank­rupt­cy fil­ing has the effect of auto­mat­i­cal­ly paus­ing civ­il pro­ceed­ings… such as the state’s case against Eyman.

Eyman is cer­tain­ly not with­out mon­ey, despite what peo­ple might be led to think by head­lines like Tim Eyman declares bank­rupt­cy.

In his bank­rupt­cy fil­ing, Eyman report­ed an aver­age month­ly income of $42,843 since May 1st, 2018, which is more than many poor Wash­ing­to­ni­ans make in an entire year. He cit­ed sev­er­al income streams: one from his polit­i­cal com­mit­tee, one from a lim­it­ed lia­bil­i­ty com­pa­ny he con­trols, and one from his legal defense fund, plus sub­stan­tial “gifts” from his rel­a­tives and friends.

How can Eyman pos­si­bly be bank­rupt with so much mon­ey rolling in?

Good ques­tion!

In his bank­rupt­cy fil­ing, Eyman cit­ed the relief and attor­ney’s fees sought by Attor­ney Gen­er­al Bob Fer­gu­son, which Eyman says add up to $3.2 mil­lion once his own legal bills and court costs are includ­ed, against assets of $2 mil­lion.

Fer­gu­son’s office has­n’t yet won the $2 mil­lion penal­ty it’s seek­ing from Eyman (again, due to Eyman’s stonewalling), but that did­n’t stop Eyman from list­ing it as a lia­bil­i­ty in his bank­rupt­cy fil­ing.

State attor­neys are ask­ing the fed­er­al bank­rupt­cy court to allow the case against Eyman to resume. Fed­er­al Judge Marc L. Bar­reca will con­sid­er their request on Fri­day, Jan­u­ary 4th, 2019, in Seat­tle.

Eyman has­n’t qual­i­fied a mea­sure for the Wash­ing­ton State bal­lot since 2015, but is hop­ing that 2019 will be his come­back year. The dis­graced ini­tia­tive pro­mot­er, des­per­ate for rel­e­vance, is cur­rent­ly try­ing to com­plete a sig­na­ture dri­ve for Ini­tia­tive 976 (a mea­sure that would gut tran­sit fund­ing at every lev­el) and hopes to qual­i­fy two more mea­sures to the 2019 bal­lot in the com­ing months.

Eyman claims to have fund­ed the I‑976 sig­na­ture dri­ve using his cashed-out retire­ment sav­ings. But since Eyman lies with impuni­ty on a reg­u­lar basis (lying is like breath­ing to him), we have no idea where the mon­ey real­ly came from.

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