Initiative promoter Tim Eyman talks to reporters Oct. 15 in front of the Temple of Justice at the Capitol in Olympia. (AP Photo/Ted S. Warren, file)

Initiative promoter Tim Eyman talks to reporters Oct. 15 in front of the Temple of Justice at the Capitol in Olympia. (AP Photo/Ted S. Warren, file)

On the legal hot seat, Tim Eyman admits he fibbed to donors

Accused of breaking campaign finance laws, the initiative promoter endures hours of tough questions in a civil trial.

OLYMPIA — Washington’s ubiquitous initiative promoter Tim Eyman got his chance Wednesday to tell his version of events behind the legal firestorm threatening his political career.

Then, the state’s attorney set about taking apart his story — and elicited a confession from Eyman that he doesn’t always tell the truth when asking supporters for money.

Eyman, a former longtime Mukilteo resident, spent a second day testifying in a Thurston County courtroom for a civil trial in which he stands accused of using his initiative campaigns to enrich himself and violating state campaign finance laws.

He’s expected to wrap up testimony early Thursday. Superior Court Judge James Dixon, who is conducting the bench trial, has yet to set a date for closing arguments. Eyman is being represented by former state Supreme Court Justice Richard Sanders.

The trial stems from a 2017 lawsuit filed by Attorney General Bob Ferguson alleging 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 alleged to have engineered a $308,000 kickback from a signature-gathering firm involved in those initiatives, and failing to report hundreds of thousands of dollars received from friends and supporters as political contributions.

Ferguson is seeking a penalty amounting to millions of dollars and wants Eyman permanently barred from directing financial transactions for any future political committees.

On Wednesday, Eyman offered his perspective of what transpired.

As the deadline approached to turn in I-1185 petitions, Citizen Solutions, the firm gathering signatures, informed Eyman that it might come up short. A ballot measure to legalize charter schools created unexpected competition, as its backers were paying signature gatherers more per signature.

To ensure success, Eyman said he did reach out to donors for additional money so they could pay signature gatherers more to ensure the measure would qualify.

Voters Want More Choices, the committee behind the 1185 campaign, paid Citizen Solutions $623,325 for collecting signatures. The firm actually earned nearly $1.2 million for its work, with the rest coming from the Association of Washington Business and the Association of Beer and Wine Wholesalers through direct contributions to pay for signature gathering.

On July 11, 2012, four days after Eyman turned in I-1185 petitions with 320,000 signatures, Citizen Solutions wired $308,000 to Eyman through his for-profit company, Watchdog for Taxpayers.

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

Of the sum, Eyman kept about $100,000 for his personal use and loaned roughly $200,000 to Citizens in Charge, a Virginia organization that supports initiatives around the country. The group wound up spending $182,000 to underwrite the cost of gathering signatures for I-517, according to online records of the Public Disclosure Commission.

Eyman said 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.”

Assistant Attorney General Eric Newman 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.

Eyman said he told the committee’s treasurer, Stan Long, he had made the loan but argued there’s no way to know that the money he gave was the same money that the organization contributed.

Newman noted Eyman repeatedly invoked his 5th Amendment right against self-incrimination when asked about details of his consulting agreement and the loan in a February 2019 deposition.

Eyman wouldn’t disclose how many clients he had or the names of any clients. “You said it was a secret,” Newman said.

“I don’t think I said it was a secret,” Eyman replied.

While Citizen Solutions Inc. founder William Agazarm paid Eyman, the other corporate leaders, Roy Ruffino and Eddie Agazarm, never knew details of the deal, Newman asserted.

“Secrecy was a big part of that $308,000 payment,” Newman said.

“Not particularly,” Eyman responded.

The interconnection between the loan and the initiative sparked another exchange later, and a potentially damaging admission by Eyman.

It centered on a fundraising pitch in which Eyman told potential donors how to give to the I-517 campaign without anyone knowing.

“In fact you said, ‘Just like me you can give to the I-517 campaign anonymously through Citizens in Charge’,” Newman said.

Eyman responded, “I will often….I will sometimes exaggerate in order to spur people to donate to entities that I am fundraising for.”

“So,” Newman asked, “you were fibbing?”

“I was not stating the situation accurately,” Eyman said. “I was doing that … in the hope that a person would donate money.”

“To the 517 campaign?”

“I would hope that donations that were given to Citizens in Charge would make their way back,” Eyman said.

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

Late last year 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 committee and as such he must follow state laws governing PACs. Since then, Eyman has collected tens of thousands in additional funds that must be reported, the state asserts.

Sanders, who did not represent Eyman at the time of the ruling, has strenuously argued a person cannot be deemed a continuing political committee.

On Wednesday, Sanders asked about the motivation behind a June 10, 2014, pitch in which Eyman makes a “humble request” for a financial gift for he and his family, and pledges to provide refunds to anyone who had sent a check thinking it was for his political compensation.

“My prediction was that this was going to go on for an extraordinarily long period of time and there was going to be no quick settlement,” Eyman said.

“So, in order to prepare for what eventually ended up happening which was the state seeking more money than I would ever have and incurring legal fees I would never be able to afford I asked friends and supporters to provide gifts to me to eventually turn over to the state or my attorneys,” he said.

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

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