Democrats are taking a new tack with legislation critics say is aimed at muzzling the Building Industry Association of Washington (BIAW...

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OLYMPIA — Democrats are taking a new tack with legislation critics say is aimed at muzzling the Building Industry Association of Washington (BIAW), one of the state’s most powerful conservative political voices.

Newly introduced legislation would bar associations from using money they make from workers’-compensation refunds for political purposes. Democrats and their labor-union allies argue the money should only be used for workplace safety and related purposes.

But Tom McCabe, the BIAW’s executive vice president, said the legislation is a “blatant political retaliation” against his group and vowed to sue if it passes.

“It’s a restriction on our rights to free speech,” McCabe said.

The BIAW in recent years has spent several million dollars supporting conservative causes and Republican candidates. During last year’s race for governor, the group sponsored some of the sharpest attacks against Democrat Christine Gregoire and is now helping lead the charge to overturn her election as governor.

The BIAW, which represents home builders across the state, is one of nearly 60 groups that run workers’-comp pools. Each year, the groups get state refunds if their members’ premiums exceed claims. Defenders of the program say this creates an incentive for the industry groups to invest in workplace safety.

The BIAW, which runs the largest workers’-comp pool, keeps 20 percent of its members’ refunds. The association’s take in 2004 was more than $5 million, half of which went to its 15 local chapters. Like other groups, the BIAW puts a lot of that money into worker-safety programs and claims management. But the BIAW also pours a lot into politics.

The group spent more than $1 million on GOP candidates during last fall’s election. It was one of Republican Dino Rossi’s biggest backers in his bid for governor and ran scathing attack ads against Gregoire. It also was instrumental in helping elect Rob McKenna as attorney general and Jim Johnson to the state Supreme Court.

Democrats initially introduced legislation last month to put a 10 percent cap on what the BIAW and other groups could keep. But they scrapped that idea after taking a lot of criticism from editorial writers and other groups that run workers’-comp pools.

In its place, Democrats this week introduced legislation — House Bill 1875 and Senate Bill 5842 — to restrict how the workers’-comp refunds could be spent. The list includes safety education, risk management and legal expenses — but not politics.

To enforce the restrictions, the legislation would require the state Department of Labor and Industries to periodically audit association records.

“I’m just saying that we need to have some sidebars on the use of those dollars,” said Sen. Mark Doumit, D-Cathlamet, one of the sponsors. “The purpose [of the program] is to reduce workplace injuries.”

The Washington State Labor Council has been trying for years to defang McCabe and the BIAW. Democratic Sen. Karen Keiser of Kent, who works as communications director for the State Labor Council when the Legislature is not in session, last fall vowed to “cut their funding out from under them.”

Doumit and Democratic Rep. Bill Fromhold of Vancouver, who sponsored the bill in the House, both denied the legislation is politically motivated or aimed specifically at the BIAW.

McCabe said labor is behind the new legislation, calling Doumit and Fromhold “lackeys for the labor unions.”

Fromhold replied: “He’s free to say whatever he wants, and I’ll be kind enough not to respond.”

Dan Wood, director of government relations for the Washington State Farm Bureau, said the legislation is “pure political payback.” The Farm Bureau runs the state’s second-largest workers’-comp pool, though it doesn’t spend refund money on politics. Still, Wood said the legislation is an infringement on free speech.

“I don’t see them telling labor unions or anybody else what they can do with their money,” Wood said.

Doumit and Fromhold pointed out the BIAW is still free to spend money through its political-action committee, which members contribute to voluntarily.

“If their members want to put the money back to the association, they could then use it for whatever they want,” Doumit said.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com