OLYMPIA — A contended interpretation of Washington’s campaign finance laws may allow Democratic gubernatorial candidate Jay Inslee to gain a $1 million fundraising advantage by tapping cash he raised in previous election cycles.

His campaign’s reasoning, informally approved by the state’s election watchdog, essentially lets Inslee ask supporters to roll their past donations forward to his current campaign — without any limits. Inslee could then ask those donors for additional money that would be subject to the state’s campaign finance limits for the 2012 election cycle, providing him with a key benefit in what is already one of the nation’s most closely watched races for governor.

Republican candidate Rob McKenna’s campaign, responding to an inquiry from The Associated Press, characterized the money as simply “illegal.”
“He’s trying to claim that because it would be convenient for him to try to grab that money and evade Washington state law,” McKenna campaign manager Randy Pepple said. He added that the campaign or someone else would likely challenge any formal opinion that would allow the money transfers.
Inslee, however, has already been consulting with the state’s Public Disclosure Commission about the matter. PDC staff believes Inslee’s interpretation is correct, and agency spokeswoman Lori Anderson said past candidates have taken similar steps.

“I don’t think that’s a fuzzy area,” Anderson said. “It’s spelled out well in our statutes and our rules.”

Inslee, in his previous campaigns for Congress, has for years been stashing away extra cash from his elections. His account was virtually empty after the 2000 election, but the excess funds have grown steadily since them — topping off at close to $1.2 million last year.

The campaign said less than $200,000 that was raised toward his congressional account in the current election cycle can be rolled forward and will be subject to donor limits on contributions. Inslee political director Joby Shimomura said aides believe $1 million can be pulled forward from past cycles. They will need to check whether committees which gave him $400,000 had enough support from Washington voters, and they need to get approval from individual donors.

The cash will simply be reported on state disclosure forms as a transfer from Inslee’s federal account.

PDC officials pointed to a section of state law that allows candidate’s with dedicated surplus funds to roll them over to future elections for the same office without the money being subject to contribution limits. Because Inslee is running for a different office, officials also turned to a separate section of law that allows candidates who are running for a new office to get approval from donors to use past donations for a new campaign.

Those laws combined show Inslee’s interpretation is correct, Anderson said.
But McKenna’s campaign pointed to federal election documents that show Inslee declaring that leftover cash as part of his 2012 coffer. Pepple noted that Inslee never declared the cash as surplus money, meaning it can’t be transferred, and he questioned whether a federal candidate could ever move money to a state campaign because the cash was raised under different election rules.

“It seems to me that he’s got to give his federal money back,” Pepple said.
Shimomura said the money from past election cycles was kept in separate bank accounts so that it did not comingle with current funds. Anderson said that was an OK way to establish them as dedicated surplus funds.
It’s an issue that’s in somewhat uncharted territory. The most recent federal politician to run for state office appears to be former U.S. Rep. Sid Morrison, who ran for governor in 1992, shortly before the current era of state campaign finance laws were approved.

After his 2008 campaign for attorney general, McKenna rolled an extra $40,000 over to the 2012 election cycle. Because that money was mingled with new cash, it is all subject to campaign contribution limits, according to the PDC. Anderson said that McKenna could have placed that money into a dedicated “surplus” account and got the same benefits as Inslee.
The leading candidates for governor in 2008 raised and spent more than $10 million each.