How much money did Tim Eyman make in the last year?

Eyman, the candidate for governor, says his income was less than $48,000 over the last 12 months.

Eyman, the serial initiative promoter and conservative activist, says he made more than $297,000 over the last 12 months.

Eyman’s newly filed statement with the state Public Disclosure Commission, now that he’s announced a run for governor, appears to be in sharp contrast with his monthly reports in federal court, where he filed for bankruptcy one year ago. Eyman says there’s a perfectly good explanation, but for almost his entire two-decade history as an anti-tax evangelist, his financial transparency has been called into question.

In 2002, Eyman paid $50,000 and a judge banned him from controlling the financial accounts of political action committees, to settle claims that he took campaign contributions for personal use. He’s currently being sued by Attorney General Bob Ferguson, accused of a scheme to launder political donations through a complex web of political committees, businesses and kickbacks to flout campaign-finance laws and enrich himself. He faces a potential lifetime ban on directing the finances of political committees.

That lawsuit and the associated legal fees, Eyman says, forced him to file for bankruptcy, despite personal assets of more than $2.1 million, plus more than $27,000 a month, on average, coming into his bank accounts, according to his filings in U.S. Bankruptcy Court for the Western District of Washington.

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Both a bankruptcy filing and a run for public office typically require detailed disclosures about one’s wealth and sources of income. But the sources of Eyman’s money remain opaque. His filing with the state Public Disclosure Commission (PDC) to run for governor says his only substantial sources of income are two political committees, both of which he founded and directs. And every month when Eyman files a mandatory financial disclosure statement in bankruptcy court, he declines to disclose who is giving him money.

“Confidential — not to be released or shared with the state,” Eyman writes, by hand, on the form.

Tim Eyman reported to bankruptcy court that he brought in an average of more than $27,000 every month in the last year, including more than $34,000 in October. But Eyman has declined to state the source of the funds, something a professor of bankruptcy law said he’d never seen before. (Angela Gottschalk / The Seattle Times)
Tim Eyman reported to bankruptcy court that he brought in an average of more than $27,000 every month in the last year, including more than $34,000 in October. But Eyman has declined to state the source of the funds, something a professor of bankruptcy law said he’d never seen before. (Angela Gottschalk / The Seattle Times)

It’s Eyman’s filing with the PDC that says he had an income of less than $48,000 in the last year, while his filings with bankruptcy court say he made more than $297,000.

Eyman, who gets the overwhelming majority of his money through donations from supporters, says the reason for the discrepancy is that the forms are asking for different things: The PDC, he says, doesn’t count those donations as income, while they are reportable to the bankruptcy court.

Eyman said in an email the PDC form asks for “income” and “compensation.”

“The deposits reported on my monthly reports are for my legal defense fund,” he wrote. “The legal defense fund is not income or compensation, it is being spent on lawyers and other legal expenses for the brutally expensive costs of the government’s litigation against me and my family.”

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Kim Bradford, a PDC spokeswoman, pointed to a 2011 report that says a legal defense fund must be disclosed if it is reported as income to the IRS. But Eyman says the gifts he personally receives are not taxable.

In his initial bankruptcy filing last November, Eyman reported that he made more than $528,000 in 2018, the vast majority from gifts — from relatives, from “supporters for Tim Eyman & Family” and from “supporters to Legal Defense Fund.” All those gifts, Eyman claimed on the form, were not taxable income.

Similarly, in 2017, according to the initial filing, Eyman made more than $737,000, with the vast majority from relatives and supporters of his family and his legal defense fund. All the gifts, Eyman said on the form, were not taxable income.

The IRS generally considers any gift larger than $15,000 to be taxable, although the taxes are generally the responsibility of the donor.

Amit Ranade, a Seattle lawyer who teaches bankruptcy law at the University of Washington Law School, was flummoxed as to how Eyman could leave the source of his finances off his bankruptcy filings.

“I’ve never seen someone hide the source of income like this,” Ranade said. “It’s hard for me to see how a plan could be confirmed without divulging sources of income.”

Martin Smith, the U.S. trustee monitoring Eyman’s bankruptcy case, could not be reached for comment.

Eyman says Ferguson’s lawsuit, which started in 2012 as a PDC investigation, has cost him over $1.1 million in legal fees over seven years, although he has gone without a lawyer in the case for much of the last year.

His recently filed bankruptcy reorganization plan says he owes more than $186,000 to the state of Washington in administrative fees — he’s been in contempt of court for more than a year for failing to disclose documents in Ferguson’s lawsuit against him. It also says he owes his former lawyers more than $108,000 and will owe the state more than $2.3 million if he loses his case.

“I am very grateful to all my friends who’ve been willing to help me with the brutally expensive costs of the government’s litigation against me and my family,” Eyman said. “The process is the punishment.”

So where does Eyman get all the money? It remains unclear, although his initial bankruptcy filing provides some hints. When filing for bankruptcy, Eyman had to list major payments he just made. Those included a couple of hefty credit card bills and nearly $30,000 in sanctions to the Attorney General’s Office.

They also included a handful of large payments to his former lawyersmade on Eyman’s behalf but paid directly by donors. Those include $50,000 from Claudia Peterson, a consistent Republican donor from Camas, Clark County, whose husband sold his telecommunications services company for nearly $600 million in 2017.

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They also include nearly $12,000 paid by Eyman’s former lawyers, The North Creek Law Firm, to his newer one. The Puget Sound Chapter of the National Electrical Contractors Association paid Eyman’s lawyers more than $8,000 on his behalf, and the Fremont Dock Co., owned by prominent Fremont landlord and conservative donor Suzie Burke, paid $5,000.

Despite it all, Eyman recently celebrated his biggest political victory in years, when voters approved his Initiative 976 to cut car tab fees to a flat $30 statewide, costing state transportation agencies millions of dollars in potential revenue and dealing significant blows to new public transit projects. The initiative was originally scheduled to go into effect Friday, but courts have at least temporarily blocked it, arguing the language on the ballot was misleading.

When the law didn’t go into effect as scheduled, Eyman blasted an email to his supporters declaring, “Last night at midnight, they took democracy away from us.”

He asked his supporters not to pay their car tabs. He asked them for money for his gubernatorial run. He also included links to donate to his political action committee and to his legal defense fund.

Clarification: This article has been updated to note that taxes owed on gifts are generally the responsibility of the donor.

Staff reporters Jim Brunner and Joseph O’Sullivan contributed to this report.