For a brief moment, Eyman was ready to settle with the state

OLYMPIA — There was a moment earlier this month when initiative promoter Tim Eyman said he had reached the breaking point in his legal brawl with Attorney General Bob Ferguson.

Bankrupt, lawyerless and bound for divorce, he wanted it to end.

He was ready to settle.

On Jan. 8, attorney Joel Ard conveyed this in an email to Assistant Attorney General Linda Dalton. He asked that she send a settlement demand to Eyman right away in hopes of resolving matters “on the State’s terms” before the next hearing, which is set for Friday morning, according to court documents.

Eyman waited. The Mukilteo resident figured Ferguson would at least demand that he pay a huge fine and accept a lifetime ban on involvement in any political action committee. The lawsuit filed by Ferguson seeks to bar Eyman from any involvement in financial transactions for any political committee in the future.

“I’ve got to be open to that,” Eyman recalled thinking. “I was desperate to have it over with.”

Dalton didn’t respond with an offer.

She did file a motion explaining why the state will be in court Friday trying to bolster its lawsuit with additional allegations against Eyman for failing to report contributions received for his political activities. The allegations are based on documents collected in the course of the case, she wrote.

Eyman needs to answer all of their questions about his activities before there can be a conversation on a settlement, Ferguson said Thursday.

“As we slowly received documents, we are uncovering new evidence of his violations,” Ferguson said. “We will not settle this case until we have uncovered the full scope of Mr. Eyman’s unlawful conduct. If Mr. Eyman is serious about wanting to resolve this case, he will stop obstructing our investigation.”

So the fight continues.

And Eyman is no longer in the mood to settle.

“They don’t want a resolution of this case. I filed with the court answers to every question that they asked, sworn under the penalty for perjury,” he said. “For six years this has been a nonstop grind. The process is the punishment.”

The dispute began with a 2012 complaint filed with the Public Disclosure Commission alleging wrongdoing by Eyman through his involvement with Initiative 1185, a tax-limiting measure he sponsored, and Initiative 517, a measure he supported that sought to reform the initiative and referendum process.

Citizen Solutions gathered signatures for Initiative 1185. It paid $308,000 to Eyman after he submitted petitions for the measure to the state. Eyman turned around and loaned a portion of the money to a group involved in gathering signatures for I-517.

Ferguson’s suit, filed in March 2017, accuses Eyman of secretly moving money between the two initiative campaigns and alleges the money he got from the signature-gathering firm was a kickback. It seeks $1.8 million in penalties plus reimbursement of the funds Eyman received from the vendor.

A trial is set for January 2020.

Friday’s hearing is on Ferguson’s request to add more alleged violations to the original lawsuit.

State attorneys contend Eyman “employed a wide variety of schemes to solicit and collect funds that should have been reported as contributions” to his political committees since 2013. They allege he offered supporters different ways to assist him financially such as with direct gifts to him or payments to a nonprofit pro-initiative group that owed money to his private consulting corporation.

Eyman will be defending himself Friday because he’s lawyerless.

In legal papers filed this week, he asks the court to deny the state’s motion.

Eyman wrote that Ferguson is trying to expand the lawsuit with a “novel legal theory” that somehow he is a “walking, talking political action committee” and “every dollar I received for any reason was a political donation.”

Regarding the original allegations, he wrote that Citizen Solutions contracted with his for-profit corporation, Watchdog for Taxpayers, to find them new clients. The $308,000 was the cost of the contract and not campaign money as Ferguson alleges, he wrote.

“It stopped being campaign money when they received it. At that point, it was theirs, and they could spend it any way they wanted,” he wrote. “There was never any personal use of campaign funds, no embezzlement of campaign funds, no misuse of campaign funds, no redirection of campaign funds. Because they weren’t campaign funds, the funds belonged to Citizen Solutions.”

Eyman acknowledged in the filing that he’s asked supporters to make donations to the political committee for his initiatives and to his legal defense fund. And he wrote he’s asked friends to provide gifts to the family, to contract with his consulting corporation (which is now dissolved) and to donate to a pro-initiative group that owed Eyman money.

“The only money I earn and receive comes from people who choose to give it to me,” he wrote. “There are plenty of people who really like me, who want to help me, and who want to enter into voluntary, mutually beneficial agreements with me.”

On Friday, Eyman will also ask Thurston County Superior Court Judge James Dixon to pause the entire case until he can get an attorney.

That won’t be easy. Eyman filed for bankruptcy in November. As a result, anyone he wants to hire must be approved by the bankruptcy judge. As a creditor, the state can object.

On Jan. 4, in bankruptcy court, the Attorney General’s office did oppose Joel Ard representing Eyman. Three days later Ard filed a notice of his intention to withdraw.

Meanwhile, the Attorney General’s Office is planning to depose several individuals this month, including Eyman’s wife and major donors to past initiative campaigns. And Eyman himself is scheduled for two days of depositions in early February.

Jerry Cornfield: 360-352-8623; jcornfield@herald net.com. Twitter: @dospueblos.

This story has been modified to make clear that the lawsuit filed by Ferguson seeks to bar Eyman from any involvement in financial transactions for any political committee in the future.