Tim Eyman, the serial initiative filer and conservative provocateur who owes the state of Washington more than $5 million after years of “particularly egregious” campaign finance violations, is in default and is now staring at the court-ordered sale of his assets.
Eyman is under a court-ordered plan requiring him to make monthly $10,000 payments to pay down his fine and other fees. He has missed his last four monthly payments.
A U.S. bankruptcy judge last week found Eyman in default and, over Eyman’s protest, ordered his bankruptcy case shifted from Chapter 11 to Chapter 7.
Chapter 7 means that the court appoints a trustee who will be responsible for selling Eyman’s assets and distributing the proceeds to his creditors, in this case, primarily, the state of Washington.
Virginia Burdette, a U.S. bankruptcy trustee, was appointed to Eyman’s case last week.
Eyman filed for bankruptcy three years ago, saying at the time that Attorney General Bob Ferguson’s lawsuit against him, accusing him of the campaign finance violations, had crippled his finances.
Ferguson first sued Eyman in 2017, accusing him of enriching himself through myriad violations of the state’s campaign finance laws.
Earlier this year, a Thurston County judge found Eyman liable, fined him $2.6 million and barred him from controlling the finances of political committees in the future.
Eyman, in total, owes nearly $5.4 million to the state, a sum that includes $2.9 million that he was ordered to pay to cover the state’s attorney fees and costs over the nearly four-year lawsuit.
Under the terms of his bankruptcy payment plan, if he goes into default, Eyman’s full debt becomes immediately due and begins accruing interest at a rate of 12% annually.
“After paying more than $500,000 towards his legal obligations, Eyman chose to stop making his required monthly payments,” Ferguson said in a prepared statement. “Eyman committed egregious campaign finance violations — there must be accountability. Eyman believes he can flout the rules and the law without consequences. He is mistaken.”
Eyman said he is “absolutely committed to appealing the AG’s ridiculously unconstitutional restrictions so what he’s doing to me and my family never happens to anyone else ever again.”
“The process has already been the punishment,” Eyman said in a prepared statement. “The last 9 years of investigation and litigation has cost me everything I’ve ever earned in my lifetime. And now the AG is forcing the sale of the home Karen and our kids live in and I don’t.”
Eyman has previously said he cannot make the payments because he “spent last of the money” paying his lawyer to appeal the judgment against him.
“It drained me dry,” he wrote in a fundraising plea in July, calling the case a “gross injustice and abuse of power.”
Eyman’s quarterly reports to bankruptcy court show that he does have money coming in.
In July, August and September he made more than a dozen deposits, totaling nearly $40,000 in contributions from supporters, according to court documents. Eyman also received $75,000 in loan repayments this summer and fall from Permanent Offense, the political action committee he started, according to court documents.
Permanent Offense also owes Eyman an additional $411,000, according to the state Public Disclosure Commission.
It is unclear if Eyman’s largest asset, his Mukilteo home, will be deemed “exempt” and not part of the forced sale of his assets. Eyman, who filed for divorce in 2019 but never completed the process, has said the house is his wife’s property.
Ferguson’s office has requested that Karen Eyman file a new divorce petition, seeking to ensure that the house remains in both of their possession so it can be used to cover the debt.
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.
But along the way he ran roughshod over state laws that require political campaigns to be open about the sources of their funding.
Eyman was charged with laundering political donations to enrich himself; accepting kickbacks from a signature-gathering firm; secretly shuttling money between initiative campaigns; and concealing the source of other political contributions.
Ferguson’s lawsuit against him included charges that date back decades.
Earlier this year, Thurston County Superior Court Judge James Dixon ruled that, in the history of Washington state’s campaign finance law, “it would be difficult for the Court to conceive of a case with misconduct that is more egregious or more extensive.”
Dixon ruled that Eyman “personally benefited economically” from his actions.