Eyman defends funds move

By Paul Queary

Associated Press

OLYMPIA — Tax rebel Tim Eyman told the state’s campaign finance watchdog Tuesday that money transferred from the Initiative 747 campaign to a related private corporation is sitting in a bank account, not lining his pocket.

But the money still has Eyman’s critics wagging accusatory fingers.

"Now he has this little slush fund that he’s running through his corporation," said Christian Sinderman, a spokesman for the No on 747 campaign.

Opponents of the property tax limitation initiative have repeatedly accused Eyman of profiting from his various initiative campaigns over the years, citing the Mukilteo watch salesman’s large house and fancy cars.

They pointed eagerly to more than $100,000 paid in the last two years from Permanent Offense, the initiative campaign, to Permanent Offense Inc., a for-profit corporation run by Eyman and his wife. The transfers disclosed under Washington’s campaign finance law were reported in Spokane’s Spokesman-Review on Sunday.

But in a letter to the Public Disclosure Commission, Eyman said that of $90,296.08 paid to Permanent Offense Inc. this year, $82,602.49 is sitting in the corporation’s contingency fund. The rest was paid out for radio advertising, accounting and database services for the campaign, Eyman said.

Initiative 747 would limit the growth of property tax levies to 1 percent a year. Opponents argue that would hurt basic public services such as fire departments and libraries.

"I make a lot of money selling watches," said Eyman, who has repeatedly maintained that he only takes expense reimbursements from the campaign’s funds. "I don’t need any additional money."

In fact, there wouldn’t be anything illegal about Eyman paying himself for his work on the campaign, provided it was properly reported to the PDC.

Eyman said he was amused the professionals campaigning against him would criticize him for taking money.

"Basically what they’re saying is, ‘We’re as dirty as you are,’ " Eyman said. "It’s just really pathetic."

Eyman said the corporation’s money will be available for Permanent Offense’s ongoing activity, including the I-747 campaign this fall, the likely legal challenge if it passes, or even future campaigns.

"We wanted to have one organization that would exist from one campaign to the next," Eyman said.

That’s a slight variation on what Eyman told the Spokesman-Review last week — that the corporation was simply a mechanism for passing money to subcontractors.

Also, the money could have remained available for all those purposes even if it hadn’t been transferred to the corporation because Washington law puts few strings on money raised for initiative campaigns.

"The fact that Permanent Offense down the road may undertake some future election activity, that’s not an issue at this point," said Vicki Rippie, the PDC’s executive director. "The committee could simply leave it in its campaign account and do the very same thing with it downstream."

So what’s the difference between Permanent Offense and Permanent Offense Inc.? Once the money is in the corporate coffers, Eyman can spend it however he pleases — so long as he spends it on anything but politics — without having to report each expenditure to the PDC. Any political expenditure would have to be reported.

"I think he was caught with his hand in the cookie jar," said Sinderman, who’s paid $5,000 a month by the No on 747 campaign.

Also, the money paid to the corporation is subject to the state’s gross receipts tax on businesses. So why would an anti-tax crusader move money out of a tax-sheltered campaign account?

"We didn’t want to lie that we were politically oriented," said Eyman, dismissing nonprofit groups that skirt limits on political activity. "By being a for-profit organization we can be upfront."