Appeals court upholds campaign finance ruling against Tim Eyman

Appeals court upholds campaign finance ruling against Tim Eyman

OLYMPIA — A Washington state appeals court today upheld virtually all of the ruling against initiative promoter Tim Eyman in the campaign finance case brought by Attorney General Bob Ferguson.

In 2021, a Thurston County Superior Court judge ruled that Eyman intentionally committed “numerous and blatant violations” of Washington’s voter-approved campaign finance laws. On multiple occasions, the state caught him illegally and intentionally concealing hundreds of thousands of dollars in campaign contributions that ended up in his personal bank account.

Following a trial, the court ordered Eyman to pay a civil penalty of $2.6 million. In addition, the court ordered Eyman to pay $2.9 million to cover the state’s costs and fees associated with investigating and prosecuting the case. Eyman subsequently appealed, resulting in today’s decision.

“Yet another court determined that Tim Eyman engaged in an intentional conspiracy to conceal political contributions and kickback payments to himself,” Ferguson said. “We appreciate that the Court unanimously upheld the overwhelming majority of the trial court’s ruling, including affirming Eyman’s numerous egregious and intentional violations, and keeping in place key court orders to make it harder for Eyman to engage in future illegal conduct. Importantly, the Court of Appeals ruled that the State is the ‘predominantly prevailing party’ in this appeal. Consequently, the court ordered Eyman to reimburse the costs we incurred responding to his appeal. This is in addition to the $2.9 million in attorneys’ fees he must already pay, which the Court of Appeals upheld.”

Highlights from the court’s detailed ruling:

Affirmed Findings

• Eyman acted in furtherance of a conspiracy to fund a kickback to himself when he and Citizen Solutions purposefully inflated the cost per signature.
• Eyman engaged in a scheme with Citizen Solutions to generate a kickback to himself from $170,000 in political contributions he solicited from contributors.
• Citizen Solutions’ payment of $308,185.50 was a kickback made with the intent to violate the Fair Campaign Practices Act (FCPA) by concealing the purpose of the expenditures and his personal use of those funds.
• Eyman concealed a $200,000 loan to Citizens in Charge for the I-517 campaign.
• Eyman directed a refund totaling $23,008.93 owed to a political committee to his own company.
• Eyman is a continuing political committee and has a statutory obligation to file reports with the Washington State Public Disclosure Commission (PDC).

Affirmed Constitutional Rulings

• It does not violate the First Amendment to require Eyman to disclose his donors.
• The PDC’s reporting requirements are not unconstitutionally oppressive on Eyman.
• The injunction was constitutionally entered.
• The penalties imposed on Eyman addressed his egregious conduct, addressed numerous and particularly egregious violations, and caused substantial harm to the voters’ entitlement to know who is contributing to political committees and paying for political campaigns.

Affirmed Violations

• I-1185 — Eyman violated the FCPA twice by concealing two separate payments to Citizen Solutions, LLC, for the reported purpose of paying for signature gathering but in fact was to compensate Eyman.
• Eyman concealed receiving a payment from Citizen Solutions, LLC totaling $308,185.50 for his personal use.
• I-517 — On four occasions, Eyman concealed contributions to the I-517 campaign by making payments to Citizens in Charge with the intent that they be spent on signature gathering but without revealing the source of the funds.
• I-517 — Eyman concealed $182,806 in contributions expended on the I-517 campaign.
• Eyman failed to register as a continuing political committee.
• Eyman concealed contributions to himself in support of ballot propositions for 58 months.
• Eyman concealed contributions totaling $837,502 to further his work on and in support of ballot initiatives.
• Eyman misappropriated $23,008.93 from his own political committee in the form of a refund to a campaign vendor.
• Eyman failed to file 124 monthly reports with the PDC, as required by law.

Affirmed Penalty Findings

• Finding that “it would be difficult for the [trial] Court to conceive of a case with misconduct that is more egregious or more extensive than the misconduct committed by Defendant Eyman in this matter.”
• Eyman committed “numerous and blatant violations of the FCPA.”
• The penalty of $2,601,502.81 is supported by the evidence.

Affirmed Award of State’s Attorney Fees and Costs

• Award of $2,795,198.58 in attorney fees and $96,486.44 in costs incurred at the trial court.
• Award of attorney fees and costs on appeal to the State.

Affirmed Injunction Requirements

• Eyman shall report in compliance with the FCPA, any gifts, donations, or any other funds Eyman receives directly or indirectly.
• Eyman is enjoined from managing, controlling, negotiating, or directing financial transactions of any kind for any Committee.
• Eyman shall not directly solicit contributions for himself or his family to support his political work without establishing a political committee, which must properly report the contributions to the PDC in compliance with the FCPA. Any contributions must be made directly to the political committee, not directly to Eyman.
• Eyman shall not be named in a statement of organization filed with the PDC as a treasurer or deputy treasurer for any political committee and shall not act in such capacity even if not named.
• Eyman shall not have any authority or responsibility for approving disclosure statements for any political committee.
• Eyman shall not be named in a statement of organization filed with the PDC as a person who may authorize expenditures on behalf of any political committee and shall not act in such capacity even if not named.
• Eyman or any entity he controls shall not be listed as an accountholder on any banking or other account that holds political committee funds; nor shall he or any entity he controls otherwise have access to such accounts, directly or indirectly.
• Eyman or any entity he controls shall not accept or take possession in any manner any contributions of any kind intended to support a political committee (e.g., Eyman cannot personally take possession of a check from a donor to be delivered to a political committee or intended to be an in-kind contribution).
• Eyman shall not have the authority to bind any political committee, as a speaking agent or otherwise, with respect to expenditures to be made by the political committee. Further, he shall not lead any person or entity to believe that he has such authority.
• Except for payments from his personal funds made as in-kind contributions, Eyman shall not have any financial decision making authority for any political committee. He shall not negotiate amounts of any expenditures with outside vendors or others for any political committee.
• Eyman shall not approve or participate in the decision making for the approval of a transfer of funds from one political committee to another or from a political committee to himself or any other person or organization.
• Eyman shall not directly solicit contributions for himself or his family to support his political work without establishing a political committee, which must properly report the contributions to the PDC in compliance with the FCPA. Any contributions must be made directly to the political committee, not directly to Eyman. Any contributions made to the political committee, whether or not intended to compensate Eyman, must be reported to the PDC as a political contribution, and, if disbursed to Eyman, disbursed by the political committee and reported as a political expenditure. The decision to make the expenditure must be made independent of Eyman by the committee and approved by the Committee’s treasurer, who must not be purely ministerial, and who must be someone other than Eyman.
• If Eyman loans money to a political committee, the terms of the loan must be in writing signed by Eyman and an authorized member of the political committee who cannot be Eyman. Said writing must be signed before any funds are transferred. The terms of the loan must be negotiated with the political committee, and Eyman cannot be involved on behalf of the political committee in the approval of the loan, its terms, or its repayment.
• Eyman shall not direct or solicit payments from contributors directly to campaign vendors. Any contributions solicited by Eyman must be made directly to a political committee, and the political committee can then distribute the money to campaign vendors as it chooses.

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