Money poured in for a recount in Christine Gregoire's close race against Dino Rossi. Those supporters — including unions and a tribal-gambling group — have benefited during the governor's first term.

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OLYMPIA — In late 2004, when Christine Gregoire’s bid to become governor was engulfed in legal challenges, the state Democratic Party sent out a plea for help.

The checks started rolling in almost immediately — $250,000 from the state’s largest public-employee union, $50,000 from a tribal-gambling group, $25,000 from the state’s main teachers union. Major national political groups also weighed in.

That money, more so than the millions Gregoire received during her campaign, is what ultimately enabled Gregoire to vanquish Republican Dino Rossi.

And those allies have done well under Gregoire.

As governor, she gave thousands of state workers the biggest raises they’ve seen in more than a decade. She approved a major expansion of tribal gambling. She vastly increased education spending and pushed for big pay raises for teachers.

“Absolutely it was money well spent,” Mary Lindquist, president of the Washington Education Association (WEA), said of the donations the teachers union gave that year.

But Republicans, who still seethe over the 2004 election, say Gregoire has gone out of her way to reward her supporters.

“There’s a quo for every quid with this administration,” said Tom McCabe, head of the Building Industry Association of Washington (BIAW) and one of Gregoire’s biggest critics. “The tribes were paid off handsomely, as were the unions.”

Gregoire bristles at the suggestion of political payoffs.

“When the election was over, for me, it was over and it was my job to be governor,” Gregoire said. “There was never a litmus test. Anybody who wanted to get in that door, got in that door. And everyone who got in that door, got an absolute fair shake.”

2 statewide recounts

In early December 2004, Rossi was making plans to move into the governor’s mansion.

He had won the Nov. 2 election by 261 votes. After a mandatory statewide recount, Rossi’s lead had dwindled to just 42 votes — the closest governor’s race in U.S. history. Gregoire’s only hope was an expensive manual-ballot tally. She warned Democratic leaders she would concede to Rossi unless the party paid for the second statewide recount.

“We had to go to all of our most faithful and ask them to dig a little deeper,” said former state Democratic Party Chairman Paul Berendt.

In a three-day span, more than $1.25 million poured in, and that was just the start.

It paid off. The manual recount put Gregoire ahead for the first time, by 129 votes. She was sworn in as governor a few weeks later, amid protests by Rossi supporters.

In early January 2005, the state Republican Party filed a lawsuit alleging that numerous ballots were mishandled and seeking to have the election overturned.

In June that year, a Chelan County judge rejected the GOP’s claims and upheld Gregoire’s election.

Unlimited sums to parties

The dispute over the 2004 election offered an unusual glimpse at the role special-interest money plays in politics.

Under state campaign-finance laws, interest groups such as labor unions and political-action committees can give unlimited sums to the state parties. It is illegal, however, for such donations to be earmarked for a particular candidate.

But the money that flowed to the parties during the 2004 recount and legal fight was solicited for one purpose — to help Gregoire or Rossi become governor.

On both sides, longtime allies stepped up with big donations during the six-month span from the final recount to the end of the court case.

The GOP got $165,000 from the national Republican Governors Association. Wealthy business leaders kicked in checks ranging from $10,000 to $50,000. (Months after the court battles ended, the BIAW paid $230,000 to help settle the GOP’s legal bills.)

The money poured in at a much faster clip for the Democrats.

The national Democratic Governors Association gave nearly $650,000. The Service Employees International Union (SEIU), the state’s largest union, donated $418,000.

In all, the party raised more than $3.5 million during that period.

“Once the spigot opened, you couldn’t stop it,” Berendt said. “It came so fast, it was hard to handle the accounting.”

Education, other spending

Despite entering the job under a legal cloud, Gregoire got off to a fast start as governor. In her first year, she stuck by a campaign promise to restore funding for two voter-approved initiatives that give teachers annual cost-of-living raises and put money toward reducing class sizes.

She has since approved additional raises for teachers, created a new state Department of Early Learning and increased overall spending on education by more than $3 billion.

Another big donor, the SEIU, had some major setbacks in the Legislature this year, but the union has benefited from the Democrats’ efforts to increase human-services spending.

Gregoire and the Legislature raised reimbursement rates for nursing homes, money that helped SEIU win new contracts with 20 homes and add 2,000 new members. And they passed legislation that enabled the union to organize more than 10,000 child-care providers.

Trial lawyers, who gave $50,000 through a national organization, won big last year when Gregoire signed legislation that allows consumers to collect up to triple damages if a court finds that their insurer acted in bad faith in denying a claim. When the insurance industry waged a nearly $10 million referendum campaign to overturn the law, Gregoire again sided with the lawyers.

The Washington State Labor Council, which also donated $50,000 for the recount, won a major victory when Gregoire helped broker a compromise with business that undid a 2003 unemployment-insurance overhaul that had taken a big bite out of benefits for laid-off construction workers, farm laborers and other seasonal employees.

State workers, tribal pact

In some cases, groups that gave heavily to the Democrats during the election fight wound up at the bargaining table with Gregoire.

The national organization of the Washington Federation of State Employees, which represents more than a third of state government’s 111,000 workers, put up $250,000 for the recount.

Up until a few years ago, state workers had gone many years with meager cost-of-living raises or none at all. In contract talks two years ago, the Gregoire administration agreed to raises for all state workers. Thousands of workers got double-digit pay increases, including some exceeding 25 percent.

Federation President Greg Devereux said Gregoire recognizes that wages for many state workers have fallen far behind the market. Having spent so many years in government herself, Gregoire “really understands what it can do,” Devereux said.

Gregoire also oversaw high-stakes negotiations with leaders of the Washington Indian Gaming Association, which gave $50,000 for the recount.

Last year, Gregoire signed a new tribal-gaming compact that opened the door for one of the largest gambling expansions in state history.

The deal will allow tribal casinos to add more than 8,000 electronic slot machines — a nearly 50 percent increase. The agreement also increased betting limits and allowed tribes to operate their casinos around the clock.

But the most controversial aspect of the agreement was that it did not require the tribes to share slot-machine profits with the state, as happens in other states. Gregoire killed an earlier agreement that included a revenue-sharing provision potentially worth tens of millions a year to the state.

Gregoire, who originally favored revenue sharing, has said she changed her mind because she feared it would create an incentive for the state to expand gambling even further.

Ron Allen, chairman of the Indian gaming group, said he and other tribal leaders “came on really strong” to convince Gregoire that letting tribes keep the money would help them become more self-reliant.

Same players in rematch

Many of the same groups that gave money to the parties in the election fight will surely be big players in this year’s rematch between Gregoire and Rossi.

In the past month, for instance, the Democratic Governors Association, SEIU and the Washington Federation of State Employees have given nearly $1 million to a newly formed political-action committee called Evergreen Progress. So far this year, tribes have given more than $40,000 to Gregoire’s re-election campaign and an additional $250,000 to the state Democratic Party. The teachers union gave $200,000 to the state party late last year.

Leaders of those groups say they have done far better under Gregoire than they would have if Rossi had prevailed in 2004.

Rossi declined to say whether he thinks the governor has been making political payoffs.

“I’ll let the public make that decision,” he said.

But Gregoire’s supporters point out that she has pushed causes that were high priorities for some of Rossi’s biggest allies in business and conservative circles, and has even won praise from some Republican legislators for her willingness to work across the aisle.

She played a pivotal role in creating a constitutionally protected “rainy day” state savings account, and has won praise from conservative groups for her efforts to make state agencies more accountable.

She has opposed efforts by the teachers union to get rid of the controversial Washington Assessment of Student Learning. Her administration is in a fight with the Washington Federation of State Employees over the state’s authority to hand some government services over to private contractors. And she has brokered compromises between perennial foes on such issues as medical malpractice and water rights.

Two years ago, Gregoire appointed wireless entrepreneur John Stanton to serve as co-chair of a regional transportation commission. Stanton, who was one of Rossi’s chief fundraisers in 2004, gave $50,000 to the GOP during the election fight.

“It’s not to me about politics,” Gregoire said. “It’s not about who contributed.”

Ralph Thomas: rthomas@seattletimes.com

Top party donors
Donations to the state Democratic Party between the December 2004 gubernatorial recount and end of the legal challenge in June 2005.
Democratic Governors Association: $645,000
Service Employees International Union: $418,000
Washington Federation of State Employees (AFSCME): $250,000
Sen. John Kerry Campaign for President: $250,000
Moveon.org: $250,000
Drive Political Fund (Teamsters): $150,000
EMILY’s List: $75,000
United Food and Commercial Workers: $62,000
Association of Trial Lawyers of America: $50,000
Washington Indian Gaming Association: $50,000
The Washington State Labor Council/AFL-CIO: $50,000
Washington Education Association: $25,000
Source: state Public Disclosure Commission