In this Jan. 21, 2016, photo, Tim Eyman speaks with reporters after hearing that a judge struck down his latest tax-limiting measure in Olympia. (Elaine Thompson/The Associated Press)

In this Jan. 21, 2016, photo, Tim Eyman speaks with reporters after hearing that a judge struck down his latest tax-limiting measure in Olympia. (Elaine Thompson/The Associated Press)

Attorney general: Tim Eyman misused initiative donations

By Martha Bellisle

The Associated Press

SEATTLE — State Attorney General Bob Ferguson has filed a $2.1 million lawsuit against anti-tax initiative promoter Tim Eyman and his organizations over their campaign finance practices.

Eyman illegally and deliberately misused funds that were donated for initiatives that he promoted, Ferguson said during a news conference Friday.

In some cases, Eyman used the funds for personal living expenses, and in other cases, he spent funds donated for one initiative on a different initiative, Ferguson said.

Eyman’s political activities amounted to an “elaborate web of unlawful transactions,” Ferguson said, adding that Eyman “demonstrated contempt for our campaign finance laws.”

“He duped his own contributors,” the attorney general said.

The lawsuit was filed in Thurston County Superior Court. It also seeks an injunction to prohibit Eyman, a ubiquitous presence in state politics who has proposed numerous tax-limiting initiatives over the years, from participating in future campaigns.

“He has demonstrated a singular inability to lawfully handle campaign expenses,” Ferguson said.

Eyman’s lawyer, Mark Lamb, said Eyman has done nothing wrong and said the money he received “was lawfully earned for the services he provided.”

“For all of the heated rhetoric earlier today, this dispute is simple: whether two transactions needed to be included on campaign reports,” Lamb said in an email. “The Attorney General believes they should, we do not.”

Eyman and his for-profit company, Watchdog for Taxpayers, could face $1.8 million in penalties plus $308,000 in reimbursement, Ferguson said.

The lawsuit also accuses for-profit signature-gathering company Citizen Solutions of participating in a scheme to conceal money the company funneled to Eyman.

Citizen Solutions and one of its principals could face penalties of about $950,000, Ferguson said.

The attorney general’s action followed an investigation by the Public Disclosure Commission that was launched after receiving a complaint in 2012.

“This was one of the more egregious matters that we’ve seen,” commission chairwoman Anne Levinson said.

“This was intentional. It was a pattern and it was done in a way that did a disservice to the public.

“It did not go unnoticed by the commission that his initiatives were to protect the public he was harming,” she said.

The commission referred the case to the attorney general’s office in 2015, and the office issued civil orders to Eyman, his company, his two political committees and Citizen Solutions seeking financial and tax records.

When Eyman and the companies didn’t fully comply with the orders, the state sought subpoenas, and in June 2016, a judge ordered Eyman to comply.

One of Eyman’s committees, “Voters Want More Choice — Save the 2/3’s,” was created to support Initiative 1185, which sought to require a two-thirds majority for legislative actions that raise taxes. The group paid Citizen Solutions to gather signatures for the measure.

After the signatures were delivered, Eyman’s company sought and received $308,185 from the group. The payment was not reported to the disclosure commission and constitutes concealment. Eyman used the funds for his own living expenses, the lawsuit said.

Officials say Eyman also misused funds raised for Initiative 517, which would have set penalties for interfering with signature gatherers or signers.

Eyman and the companies named in the lawsuit have 20 days to respond to the complaint.

Elaine Thompson/The Associated Press                                Tim Eyman speaks with reporters after hearing that a judge struck down his latest tax-limiting measure in Olympia on Jan. 21, 2016.

Elaine Thompson/The Associated Press Tim Eyman speaks with reporters after hearing that a judge struck down his latest tax-limiting measure in Olympia on Jan. 21, 2016.

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