With the opportunity to return contributions to any of the hundreds of people who had donated to his failed candidacy, he first chose only three other recipients, giving $1,100 to his wife and $2,200 to his in-laws. After a little more cash came in from unused media buys, he managed a handful of other refunds a few weeks later, sending cash to his parents and his two brothers and four other supporters.
His account was then empty.
Throughout 25 years in politics, Inslee has meticulously managed his campaign cash while relying heavily on his closest allies rather than average voters, according to an Associated Press review of more than 1,000 pages of campaign finance records, some of which are now only available on microfiche in the state's archives.
None of Inslee's activities were illegal, though he has already pushed the boundaries of finance laws in this year's race for governor, in which he is the de facto Democratic candidate. The state's elections watchdog has brushed him back on his plans related to fund transfers, leading Inslee to pursue an alternative course that effectively allows him to circumvent the rules placed on him, according to federal finance reports released this month.
Inslee campaign spokesman Sterling Clifford said they were pleased to have contributions from more than 20,000 people in Washington state.
"We're very pleased by the level of engagement and support the people of Washington have shown our campaign," he said.
Inslee's gubernatorial opponent Republican Attorney General Rob McKenna has largely been unable to fundraise for months because of standard restrictions on sitting state officials. Still, he and Inslee have raised similar amounts from individuals and businesses.
Inslee holds a fundraising edge -- $4.8 million to $4 million -- because he has substantially more cash from political allies such as the state party and political action committees.
Inslee's 1996 contribution refunds are in stark contrast to how McKenna has handled his excess campaign cash over the years. While some of that money has been sent to political groups and some souvenirs for donors, McKenna donated most of it to a variety of community organizations, such as schools, domestic violence programs and a theater program for children.
Todd Donovan, who teaches political science at Western Washington University, said Inslee's refunds were the actions of somebody who had no plans to run for statewide office again.
"You're setting yourself up for coverage that's not going to look good," Donovan said. "I don't know how you spin that."
Inslee has since made some charitable contributions from his federal campaign account, including $1,500 to Seattle Children's Hospital in 2010.
Campaign cash that Inslee is now compiling in his race against McKenna can in some ways be traced back to a decade of fundraising during his time in Congress. While serving in a relatively safe congressional seat, Inslee has for years been stockpiling extra cash from his elections, growing his account from near depletion after the 2000 election to nearly $1.2 million at the end of the 2010 election.
That was three times more cash than any other Washington member of the U.S. House.
During his career in Congress, he got more than $4 million -- more than one-third of all his federal campaign cash -- from political action committees.
Inslee's campaign and the state's Public Disclosure Commission believed earlier this year that he could get approval from donors and simply transfer about $1 million of that money to his state account without any of it being subject to contribution limits. Under that plan, a donor who previously gave to his federal campaign would approve a transfer and then still be able to contribute the maximum amount on top of that.
The disclosure commission eventually decided against Inslee, saying transfers would be subject to contribution limits. Still, Inslee effectively bypassed that rule earlier this month by transferring $155,000 from his federal account to the state Democratic Party to aid in get-out-the-vote efforts that would boost his campaign.
The state Democratic party has already been buoying his campaign with $700,000 in transfers, helping him barely keep a fundraising lead on McKenna even during the monthslong period when McKenna was largely unable to fundraise.
It isn't the first time that the state party and Inslee's closest allies have buoyed his political accounts when individual donations lagged.
Back in 1988, when Inslee first ran for the state House, his first donation was $5,000 from his parents -- a total that would account for more than 10 percent of all his campaign contributions for that election.
But they were not his largest donors that year. That was left to Inslee's political partners.
Inslee had served on the board of trustees of the Lawyers Political Action Committee, a political organization for trial lawyers that gives financial contributions to candidates, and went on a "leave of absence" just a week before starting to raise funds for his own race. About two weeks into his campaigning, the Lawyers Political Action Committee gave Inslee a $2,500 donation.
The group would eventually donate a total of $5,190.10 that year. The state Democratic Party gave over $9,300. Other political groups and fellow Democratic politicians also gave thousands of dollars.
Inslee's campaign that year raised a total of $46,000.
Two years later, as Inslee sought re-election to his state House seat, he was running short on campaign cash in the final weeks of the election, so he personally gave the campaign a $9,500 loan. Over the following days, he aggressively pulled in contributions from his closest allies -- the union for state workers, the teachers union and fellow political candidates poured in some $10,000 in a matter of days.
The Lawyers Political Action Committee also gave another $1,000, upping its total contribution to $10,000 in that election cycle alone.
Seventeen days after Inslee had loaned the $9,500 to his race, the campaign was able to pay Inslee every penny back.
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