Judge weighs Eyman’s fate as civil trial draws to a close

OLYMPIA — Initiative promoter Tim Eyman did pretty much everything state attorneys say he did, received every dollar they said he got and spent it the way they said he spent it.

In the end, none of his actions ran afoul of campaign finance law as the state insists.

That was the nub of the closing argument Eyman’s attorney, Richard Sanders, made to a Thurston County Superior Court judge Thursday, the final day of a civil trial to determine if Eyman is a serial violator of Washington’s campaign finance laws.

“Our statute simply does not support the state’s claims,” Sanders said. “The case is designed to eliminate Mr. Eyman as an advocate for less taxes, smaller government and a free society.”

The state, in a lawsuit filed in 2017, accuses Eyman of illegally moving funds between two initiative campaigns in 2012, getting a kickback from a signature-gathering vendor and failing to report hundreds of thousands of dollars in contributions.

Superior Court Judge James Dixon conducted the bench trial and said he hopes to issue a decision in the next two weeks. The trial took place over eight days.

Eyman, a former longtime Mukilteo resident now living in Bellevue, stands accused of using his initiative campaigns to enrich himself and of violating several provisions of state campaign finance laws.

Attorney General Bob Ferguson alleged in the suit that Eyman failed to report shifting money donated for Initiative 1185, a tax-limiting measure, into the campaign for Initiative 517, which sought to modify the initiative and referendum process. Eyman served as an officer of committees for both initiatives.

Eyman is also accused of engineering a $308,000 kickback from Citizen Solutions, the signature-gathering firm for I-1185. He loaned two-thirds of the money to a Virginia group, which turned around and contributed it to the I-517 effort.

Eyman testified in the trial that he received the money for a three-year consulting agreement with the firm through which he would look to bring them new clients. Those funds came out of the company’s profits.

“Citizen Solutions made a profit and can do whatever they want with their profit,” Sanders said Thursday, adding that even if it was an “outright gift” to Eyman it didn’t trigger a reporting requirement as a campaign contribution.

Regarding the loan, Eyman testified during the trial that he didn’t know for certain the group would turn around and contribute the money to help I-517, but added, “I certainly hoped so.” And he said he told the treasurer, Stan Long, about it, and left to him to decide what needed disclosing.

Assistant Attorney General Eric Newman, who steered the state’s case, contended Eyman — an officer of the political committee pushing I-517 — understood the purpose of his loan and deliberately concealed it from disclosure on campaign finance reports.

Sanders argued that under state law “the sole duty” to report a political committee’s financial transactions lies with the treasurer. And since Eyman has been barred from being a treasurer under a 2002 court order, he cannot be found liable for machinations surrounding the initiatives in 2012.

Newman, in a closing rebuttal Thursday, mocked the defense theory.

The state’s Fair Campaign Practices law is 50 years old, he said.

“And in all that time nobody noticed a huge, huge glaring loophole, that is you can do whatever you want as long as you’re not the treasurer. That’s his argument.”

The state’s other major claim — and one bolstered by a prior Dixon ruling — is that money Eyman receives from friends and supporters must be treated as contributions in support of his political endeavors and not as gifts for his personal use.

In late 2019, Dixon ruled that $766,447 collected between February 2012 and July 2018 fell under that umbrella and should be disclosed. Dixon concluded Eyman’s actions equated to those of a continuing political action committee, and as such he must follow state laws governing PACs. Since then, Eyman has collected tens of thousands of dollars in additional money that must be reported, the state asserts.

Sanders, who did not represent Eyman at the time of that ruling, has strenuously argued that a person cannot be deemed a continuing political committee. He asked Dixon to vacate his earlier ruling.

The state is seeking $2.6 million in penalties and wants Dixon to treble it to $7.8 million, as allowed by law. The added amount would be for punitive damages.

The state also wants to permanently bar Eyman from “managing, controlling, negotiating, or directing financial transactions” of any political committees in the future. And it wants to make sure Eyman registers as a continuing political committee to ensure every contribution and expenditure connected to his future political pursuits are recorded.

“You cannot participate in a free society with those kind of restrictions,” Sanders said. “Such an injunction would eliminate his free speech activities and eliminate his ability to meaningfully participate in any ballot measure campaign, which is exactly what the attorney general wants.”

Newman disagreed.

“He can go out and promote initiatives,” he said during his closing argument. “He can meet with whoever he wants. He just can’t have the decision-making power. That’s where things get sticky, where his fingers get sticky.”

Punitive damages are necessary to end Eyman’s nefarious behavior, Newman argued.

“Nobody has ever violated this statute for this long in this many ways,” Newman said. “I am sure there has never been a case with this length and this meticulous conniving and conspiracy to get around” the Fair Campaign Practices Act.

If Dixon rules in favor of the state, Newman said, “careful, robust, meticulous injunction is necessary and it has to be in writing because if we miss something, the creativity of the interpretation of this court’s order will be used against it.”

Herald reporter Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos