Attorney General may file suit against Eyman

By David Ammons

Associated Press

OLYMPIA — The state Attorney General’s office signaled it will take Tim Eyman to court over his handling of campaign finances.

"It is our intent to file a civil lawsuit in this matter," the office stated in a press release issued the same day the state Public Disclosure Commission forwarded its investigation to the attorney general.

The Commission on Tuesday said initiative guru Eyman apparently broke the law by diverting campaign funds to his bank account.

It turned the case over to the attorney general, saying it wanted her to pursue civil penalties stiffer than the $2,500 per infraction it can impose.

Eyman’s lawyer, William Glueck of Seattle, flatly denied that the Mukilteo watch salesman violated campaign laws and said Eyman will vigorously defend himself if the case ends up in court.

Eyman has been the state’s foremost initiative sponsor in recent years; his causes have included rolling back affirmative action and repealing the car tab tax. Earlier this year, he confessed to The Associated Press that he had created a for-profit corporation solely to hide that he was taking campaign contributions for personal use.

He said he had diverted more than $200,000 to a salary fund and that he had already taken $45,000.

The disclosure panel unanimously decided, without debate or comment, that Eyman is in apparent violation of multiple election laws.

Eyman could face tens of thousands of dollars in fines in Superior Court. Each violation can carry up to a $10,000 fine, and each of the five categories of violations named against Eyman could include multiple violations.

Glueck told reporters Eyman did nothing illegal and concealed no information. He said Eyman will contest the matter in court, but also held open the possibility of a settlement between Eyman and the state.

The commission also found former Eyman treasurer Suzanne Karr and the Permanent Offense political action committee guilty of apparent violations for concealing the payments to Eyman. The panel referred those charges to the attorney general as well.

The commission dropped charges against Eyman’s three co-chairmen, Monte Benham of Kennewick and Jack and Mike Fagan of Spokane. It also said the state shouldn’t pursue action against Eyman’s wife, Karen, who acted as treasurer in name only.

Rather than launch a full-blown enforcement hearing, the commission adopted the recommendations of staff investigators, who had outlined a stinging rebuke of Eyman’s handling of campaign money in recent years.

The agency found that Eyman violated five different provisions of the law by:

Concealing compensation paid by Permanent Offense PAC, his political group, to the for-profit company he formed, Permanent Offense Inc.

Using campaign money to pay expenses and buy equipment for himself and Insignia Corp., a company he owns. Insignia sells customized watches to college fraternities and sororities.

Failing to keep adequate records to back up reimbursements he claimed for his own spending on the campaign trial. Over three years, he was reimbursed $72,494 by his campaigns, including more than $26,000 for postage and $4,834 for vehicle expenses, including gas and maintenance for the family Lexus.

Failing to report in-kind contributions made by Permanent Offense Inc. to Permanent Offense PAC. This charge stems from money the corporation spent on the campaigns but didn’t report to the PDC.

Using Permanent Offense PAC funds to reimburse himself for campaign contributions. Eyman was reimbursed for a $500 contribution to the Republican National Committee and for a $60 donation to the No on I-747 Committee. The latter was paid so he could gate-crash his opponents’ fund-raiser as a media stunt.