On Monday morning, after years of investigations, contempt of court citations and bankruptcy filings, Tim Eyman will stand trial in a case that could bring an end to his decades of leading anti-tax initiatives in Washington.
Eyman stands accused in Thurston County Superior Court of laundering political donations to enrich himself, accepting kickbacks from a signature-gathering firm and a yearslong refusal to comply with campaign finance laws.
Attorney General Bob Ferguson, whose 2017 lawsuit against Eyman precipitated the civil trial, seeks millions of dollars in damages and he hopes to permanently bar Eyman from accepting money on behalf of any political committee or handling their finances.
“Even after paying fines and having adverse judgments entered against him, he continues to flout the law and seek new ways to conceal donations and benefit from them personally,” Ferguson writes in a court brief. “He did so intentionally and willfully, even after both the Public Disclosure Commission [PDC] and his own accountant warned him that the law required otherwise. Nevertheless, that did not matter to Mr. Eyman.”
Eyman has personally received and concealed more than $1 million, Ferguson says.
“He violated the laws to his political benefit,” Ferguson wrote. “And he has not acted in good faith.”
Eyman argues that, on the campaigns in question, he was not the campaign treasurer. He says the $300,000 he and his company, Watchdog for Taxpayers, received from Citizen Solutions, the signature-gathering firm they long did business with, was not a kickback, but a consulting contract.
And, he says, the unreported money he’s received while running initiative campaigns “was intended to be used for, and was subsequently spent on, his family personally, not for any campaign,” even if his many requests for donations sometimes asked for both personal and campaign contributions at the same time.
“If he had an independent duty to disclose something, he would have. Why not? All of these transactions were legal, and all taxes were paid,” Eyman’s lawyer, former Supreme Court Justice Richard Sanders, writes in his opening trial brief. “And they would have shown that Mr. Eyman received compensation for his initiative work and that he supported the initiatives he sponsored which are things the public already knew.”
What’s more, Sanders argues, what Ferguson is asking of Eyman, and the potential penalties, are unconstitutional.
“The government has no interest to force Mr. Eyman to publicly report on his friends and supporters support while Mr. Eyman’s First Amendment rights would be extremely burdened through the fear of massive fines and even felony jail time if he continues his political advocacy,” Sanders writes.
The trial is a long time coming.
Eyman has spent decades running initiatives to lower taxes and advance conservative policies in Washington. While he has not always been successful at the ballot box and in court, he has had a profound impact on the state’s politics and on the budgets of Washington’s cities and counties.
It’s been more than 18 years since, in a previous violation of campaign finance regulations, Eyman apologized after it was revealed he’d lied about paying himself from initiative donor funds. He paid $55,000 in fines and was banned from serving as treasurer of a political committee.
It’s been more than eight years since the 2012 campaign from which the current charges arise, when Eyman ran two initiatives and is accused of improperly shuttling campaign money between the two campaigns.
It’s been more than five years since the PDC, in 2015, charged Eyman with receiving secret payments and illegally using campaign money for personal expenses.
And it’s been more than three years since Ferguson acted on those PDC charges, filing his own lawsuit, which has finally wound its way to trial.
In the meantime, Eyman was held in contempt of court for two years, for refusing to cooperate with the lawsuit against him, accruing more than $230,000 in sanctions.
Eyman filed for bankruptcy, claiming that the legal fees and potential fines from the state’s lawsuit against him had crippled his finances.
Last February, in a partial ruling, Thurston County Superior Court Judge James Dixon found that Eyman had been in violation of Washington campaign finance laws for at least the last seven years, concealing nearly $800,000 in political contributions.
Dixon ruled that Eyman was more than seven years late in registering as a political committee. He was also late by about a combined 476 years in filing 110 monthly campaign finance reports, Dixon ruled. That tardiness could carry a cost. The penalty for filing a late report is $10 a day, and that could be bumped to $30 a day if the judge rules the violations were intentional, which could potentially leave Eyman vulnerable to a fine of more than $5 million.
But Dixon did not rule on the original charges Ferguson brought — that Eyman was improperly using political donations for personal use and concealing the source of other political contributions.
Also, since the lawsuit began: Eyman ran unsuccessfully for governor and managed another successful ballot initiative calling for $30 car-tab taxes (his third) but saw the Supreme Court once again rule the initiative unconstitutional.
Ferguson’s case against Eyman includes myriad examples of how Eyman allegedly used his initiative campaigns to enrich himself, without making the requisite campaign finance disclosures.
Ferguson cites a 2010 email from Eyman to Citizen Solutions saying he had agreed to pay $2 per signature that the firm collected, to get one of his initiatives on the ballot, but that he was “doing his best” to raise money at a rate of $2.50 per signature.
His goal, Eyman wrote, was to “pay Citizen Solutions the agreed upon $2 per sig plus $150,000 so that you have an extra $150,000 to provide to me.”
Ferguson cites an email in which Eyman asked his accountant about tax requirements for financial gifts. He was told that a person could give each member of Eyman’s family up to $13,000 without telling the IRS.
A few months later, Ferguson alleges, after Eyman’s company had paid Citizen Solutions more than $1 million for signature gathering, the company paid Eyman, his wife and their three minor children $86,000, all in checks below the $13,000 threshold.
“Eyman not only intentionally concealed contributions and used contributions for personal use, his own statements and emails confirm he was aware of what he was doing,” Ferguson writes. “He has shown no remorse, and if anything, has continued to flout the law, even after the filing of this case.”
Sanders, in a prepared statement, said he firmly believes “Mr. Eyman did not violate any of our state’s reporting laws.”
In an interview last week on KIRO radio, Eyman said his political opponents “are the wind beneath my wings” and he plans to run two ballot initiatives next year.