State Attorney General Bob Ferguson’s four-year legal pursuit of initiative promoter Tim Eyman ended Wednesday, Feb. 10, in a resounding win as a Thurston County judge hit the conservative activist with a $2.6 million fine for repeated violations of state law and restrictions on his role in ballot measure campaigns in the future.
Superior Court Judge James Dixon levied the multi-million dollar penalty after finding Eyman illegally moved money between initiative campaigns in 2012, engineered a $308,000 kickback from a signature-gathering firm involved in those initiatives and failed to report hundreds of thousands of dollars in political contributions.
The judge described the violations as “particularly egregious” and “were intentional efforts to conceal, deceive and mislead … and had a significant and material impact” on the public’s ability to know who was financing the initiative campaigns.
It is the largest campaign finance penalty ever levied in Washington against a single individual, according to state attorneys.
Dixon’s order also permanently bans Eyman from directing financial transactions for any political committees and requires him to form a political committee to fund his future activist endeavors — two restrictions sought by Ferguson.
“This is a complete and total victory for the state of Washington,” Ferguson said. “The evidence was overwhelming. It is my hope that today’s decision will focus Mr. Eyman’s mind on following the rules.”
Eyman continued to deny any wrongdoing Wednesday.
“I am absolutely certain that I did not violate any law,” he said. “This decision was not based on the law or the Constitution. This was based on giving the attorney general what he wanted.”
As for the fine, Eyman, who filed for bankruptcy in 2018, said, “Why not make it $80 million? It doesn’t matter. I don’t have it.”
Eyman has already been paying the state $10,000 a month for fines accrued for contempt-of-court violations in the case. That amount will soon rise to $13,000, Ferguson said.
“It is going to take awhile,” he said. “But he’s going to pay it.”
The judge’s decision concludes a nearly nine-year drama that began with a complaint filed in August 2012 with the Public Disclosure Commission by Sherry Bockwinkel of Tacoma. It alleged Eyman failed to report that he was shifting money donated for Initiative 1185, a tax-limiting measure, into the campaign for Initiative 517, which sought to modify the initiative and referendum process.
Under state election law, money can be moved from one political committee to another, but it must be disclosed in reports to the commission. And the sources of the money that is shifted must be revealed, as well.
The Public Disclosure Commission conducted a three-year investigation. It relied on bank records, emails and interviews to diagram how Eyman steered payments through his political committee, Voters Want More Choices, to Citizen Solutions, a signature-gathering firm, allegedly knowing that a portion of the money would be paid back to him for personal use and political activity.
Commissioners found the action so egregious that they delivered it to Ferguson to pursue. He filed his lawsuit March 31, 2017, and it crept along as Eyman continually resisted turning over documents. As of November, Eyman had been fined several hundred thousand dollars for contempt violations.
In the lawsuit, Eyman, of Bellevue, who lived in Mukilteo for many years, was accused of garnering a $308,000 kickback from Citizen Solutions. He loaned two-thirds of the money to a Virginia group, which turned around and contributed it to the I-517 effort.
In the course of a trial that took place over eight days, state attorneys sought to show that Eyman built a lucrative career promoting ballot measures by flouting Washington laws regulating the flow of funds in and out of his initiative campaigns.
In his defense, Eyman acknowledged he had done pretty much everything state attorneys say he did, received every dollar they said he received and spent it the way they said he spent it. But, his attorneys argued, none of those actions broke the law.
Eyman testified that $308,000 was for a consulting agreement to drum up business for Citizen Solutions, the signature-gathering firm. Those funds came out of the company’s profits, he argued.
But Dixon sided with the state’s arguments.
“Mr. Eyman has personally benefited economically from these violations,” Dixon said in an order initially delivered verbally from the bench.
The state’s other major claim — and one bolstered by a prior Dixon ruling — is that money Eyman received from friends and supporters must be treated as contributions in support of his political endeavors and not as gifts for his personal use.
In late 2019, Dixon ruled that $766,447 collected between February 2012 and July 2018 fell under that umbrella and should be disclosed. Dixon concluded Eyman’s actions equated to those of a continuing political action committee and that he must follow state laws governing PACs. As of Wednesday, that figure had reached $837,502.
Eyman insisted that money was from gifts to support him and his family.
At trial, the state sought $2.6 million in penalties and asked Dixon to treble it to $7.8 million, as allowed by law, for punitive damages. Dixon declined to treble the amount.
Under Dixon’s order, Eyman is now permanently barred from “managing, controlling, negotiating, or directing financial transactions of any kind” for any political committee.
At the behest of state attorneys, the order details the banned practices. It says he cannot be a treasurer, deputy treasurer or even listed on a political committee’s statement of organization as one with input on financial transactions.
It states that he “shall not directly solicit contributions for himself or his family to support his political work without establishing a political committee,” nor can he “accept or take possession in any manner any contributions of any kind intended to support a political committee.”
During the trial, Eyman’s attorney, former state Supreme Court justice Richard Sanders, argued such restrictions would violate his client’s First Amendment rights by impeding his ability to participate in politics.
“The injunction entered by the court does not stop Mr. Eyman from doing what Mr. Eyman wants to do,” Dixon said Wednesday. “He just has to comply with (the law). And he hasn’t.”
Eyman on Wednesday insisted he “will comply” with all of the court-imposed restrictions.
“It is going to be interesting,” he said. “I have to be sure not to step on any land mines laid out by the court.”
Andrew Villeneuve, founder and executive director of the Northwest Progressive Institute, a steadfast opponent of Eyman’s ballot measures, applauded the outcome.
“Justice was served today … long, long overdue justice,” he said. “If he is going to do initiatives in the future, somebody is going to have to sign off on his moves. The judge said he needs supervision. That’s an entirely appropriate punishment.
Meanwhile Eyman isn’t slowing down.
He said he’s pushing two anti-tax measures in 2021 and supporters can expect to receive an email Thursday asking them to financially support his legal defense and efforts to launch those measures.
That didn’t surprise Ferguson.
“Any political obituary of Mr. Eyman is premature,” he said. “I fully anticipate he will be very involved in our political process for a long time to come. We will be watching him very, very carefully.”
