EVERETT — Attorney General Bob Ferguson wants a Snohomish County judge to find initiative promoter Tim Eyman in contempt for failing to hand over tax records and other financial documents as part of a state investigation into alleged campaign fraud.
State attorneys filed a motion Wednesday contending Eyman violated Snohomish County Superior Court Judge Ellen Fair’s order to surrender the records by a July 13 deadline.
Eyman and the political committees he directs should be found in contempt and fined $2,000 a day to “impress upon them the importance that they comply now,” according to the motion.
And the state’s attorneys want the court to permit Ferguson’s office to obtain the documents on its own, if necessary, by directly contacting the Internal Revenue Service and banks used by Eyman and the committees.
“Despite a subpoena and a court order, Tim Eyman continues to impede this investigation,” Ferguson said in a prepared statement. “That’s unacceptable.”
Attorney Mark Lamb, of Bothell, who represents Eyman, declined to answer questions about the motion.
But in an email sent Wednesday afternoon to two assistant attorneys general, Lamb contends every requested tax record had been provided.
“I wanted to immediately respond to the incorrect assertions in the attached motion regarding tax returns,” Lamb wrote. “Mr. Eyman turned over all copies of his federal and state business and personal tax returns from 2009-2014 by the deadline contained in the order. The returns provided to your office are complete and accurate copies of the returns electronically filed by his accountant.”
Lamb said there are no federal business tax returns for Eyman’s private company because it is a “disregarded entity” for federal tax purposes. All of its income is reflected on personal returns filed by Eyman which were provided to the state, he wrote.
“There are no income tax records for any of the Washington state political committees as they do not pay federal income tax and thus have filed no returns,” Lamb wrote to the state attorneys.
Ferguson is investigating allegations Eyman illegally shifted money among two initiative campaigns in 2012 and concealed payments he received in the process.
Among the issues being explored is evidence that Eyman used $170,000 raised for the political campaigns to pay for his personal living expenses.
Ferguson wants personal tax records and bank receipts from Eyman as well as records for a limited liability corporation he set up named Tim Eyman Watchdog for Taxpayers.
Ferguson also sought records and correspondence from two political committees Eyman leads, Voters Want More Choices and Help Us Help Taxpayers.
On June 29, Judge Fair ruled Eyman, of Mukilteo, had not complied with subpoenas demanding the records. She set the July 13 deadline for him to produce the documents.
That afternoon and evening, Eyman provided 247 pages of records via email, according to the state’s motion. It brought the number of pages of material produced to 1,038.
But Ferguson’s motion said Eyman failed to turn over tax and banking records for the committees as well as contract and billing records between the political committees and the firm hired to gather signatures for the two initiatives, Citizen Solutions.
Eyman’s legal headaches arise from an inquiry that began in April 2012 with a complaint to the state Public Disclosure Commission. He was accused of improperly shifting money raised in support of Initiative 1185 to pay professionals gathering signatures for Initiative 517.
PDC investigators used emails, bank records and interviews to piece together a picture of how Eyman not only moved money between the campaigns, but also allegedly concealed up to $308,000 in kickbacks.
Commissioners for the election watchdog agency in September asked Ferguson to take the case. Part of their motivation was that the state’s chief lawyer could seek punishment more severe than the civil penalties Eyman risked from the PDC.
Meanwhile, a Thurston County court had ordered Citizen Solutions to turn over records by July 13.
On Wednesday, Ferguson returned to that court to ask that the company be found in contempt and fined for failing to comply.
Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com Twitter: @dospueblos
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