Tim Eyman misused funds, state disclosure agency says

OLYMPIA — Initiative promoter Tim Eyman secretly moved money among two ballot measure campaigns in 2012 and pocketed tens of thousands of dollars in the process, according to findings of a three-year state investigation released Monday.

Eyman, of Mukilteo, allegedly took money received for one initiative and funneled a portion through a Virginia group in support of another measure he backed, staff of the state Public Disclosure Commission concluded in its report.

The money, about $308,000, came from the signature-gathering firm Eyman hired for both initiatives. Eyman kept a large chunk for his personal living expenses in violation of campaign laws, the report said.

PDC staff Thursday will ask the commission to refer the case to Attorney General Bob Ferguson because the commission’s penalty authority is inadequate to address the “seriousness of the apparent violations.”

The commission can impose fines up to $10,000 per violation while the state can triple the amount and impose other restrictions.

Neither Eyman nor his attorney, Mark Lamb of Bothell, is expected to attend Thursday’s meeting.

In a prepared statement, Lamb said “the report omits and mischaracterizes evidence. To this day, my client believes all required information was reported.”

Lamb also questioned the timing of the report’s release. It comes as voters are weighing the merits of Eyman latest anti-tax measure, I-1366, on this November’s ballot.

“My client firmly believes it is not a coincidence that an investigation which lay dormant for so long suddenly sprang to life shortly after opponents failed to block a vote on the latest tax initiative,” Lamb said. “Regardless, because of the recommendation that this matter proceed to litigation, we will not have additional comment at this time.”

Meanwhile, one of Eyman’s most ardent critics hopes the attorney general gets the case.

“At long last, Tim Eyman’s misdeeds are catching up to him,” said Andrew Villeneuve of the Northwest Progressive Institute in a statement. “The day of reckoning has come. The wrongdoing detailed in these findings is part of a pattern of behavior that stretches back to nearly the beginning of Eyman’s career.”

The genesis of the investigation is a complaint filed in April 2012 alleging that some of the money Eyman raised in support of Initiative 1185 was improperly used for the gathering of signatures for Initiative 517.

I-1185, which required any tax increase be passed by a two-thirds majority in both the House and Senate, was approved by voters in November 2012. It has since been struck down by the state Supreme Court.

I-517, meanwhile, proposed sweeping changes to the state’s initiative and referendum process. Eddie Agazarm, a co-founder of Citizen Solutions, was its chief backer. Voters turned it down in November 2013.

PDC staff focused on transactions involving Eyman, his political committee Voters Want More Choices and the firm that gathered signatures for both initiatives, Citizen Solutions.

The firm earned nearly $1.2 million for its work on I-1185. Voters Want More Choices paid $623,325 with the rest coming from the Association of Washington Business and Association of Beer and Wine Wholesalers.

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

Then, over the next few weeks, Eyman loaned $190,000 to Citizens in Charge, a Virginia organization that supports initiatives around the country. The group turned around and sent $182,000 to Protect Your Right to Vote on Initiatives, the political committee behind I-517. It hired Citizen Solutions to gather its signatures.

Neither the payment to Eyman nor the loan was reported to the Public Disclosure Commission. PDC staff alleges both should have been as they represented the expenditure of funds for political purposes.

Eyman told PDC investigators that Citizen Solutions paid him to help find new clients for the firm and he could use it as he wished. He said when he made the loan he wanted to support Citizens in Charge but denied knowing how it would be spent.

Citizens in Charge executive director Paul Jacobs “said he had many projects going on nationally and that if additional funds came in, they would be in a position to be able to help Initiative 517,” Eyman told PDC staff. “But once I made the loans, I didn’t have any knowledge or understanding of whether or not my loans went to his other projects or whether or not he used those funds specifically for 517. I believe to this day that everything was done correctly.”

Out of the $308,000 from Citizen Solution, Eyman kept $108,000 for personal use. With loan repayments, Eyman’s earned about $170,000 — all of which the PDC staff contend are required to be reported and have not been.

And there could be earnings from Citizen Solutions in other years that Eyman should have reported as well.

Agarzam told PDC staff that since 1998 the firm has paid Eyman a consulting fee of $5,000 to $100,000 for business he brought in — including his own initiatives. Those fees have not shown up on any reports filed with the commission.

This isn’t Eyman’s first run-in with PDC.

In 2002, he tearfully confessed to not reporting that he was taking money for salary that went to his political committee. That resulted in roughly $55,000 in fines.

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