State sues anti-tax activist, alleges he personally profited from unlawful campaign transactions

by: KIRO 7 News Staff Updated:

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Washington State Attorney General Bob Ferguson filed a $2.1 million lawsuit against anti-tax activist Tim Eyman with allegations that he enriched himself while keeping his contributors and the public in the dark.  

Key developments: 

  • Eyman has sponsored and promoted multiple initiatives in Washington state. 
  • Ferguson said Friday, Eyman illegally and deliberately misused funds that were donated for initiatives that he promoted. 
  • Ferguson's lawsuit focuses largely on alleged violations during the “Save the 2/3 Vote for Tax Increases (Again) Act Initiative 1185.” 
  • A lawyer for Eyman says client "lawfully earned" money for his work.
Authorities reported Eyman used the funds for personal living expenses and in other cases, he spent funds donated for one initiative on a different initiative.
 
Calling Eyman's political actions an "elaborate web of unlawful transactions," Ferguson said the initiative sponsor "demonstrated contempt" for the state's campaign finance laws. 

“Taking kickbacks from contractors, using campaign funds for personal expenses, redirecting donations made for one initiative to a different initiative — it’s hard to imagine what more Mr. Eyman could have done to show his contempt for our campaign finance disclosure laws,” Ferguson said.

The attorney general gave these timelines of Eyman's alleged actions. 

The attorney general alleges Eyman's improper personal use of funds totaled $308,000 in contributions, which were made to political committees.  

>> Related: Disturbing picture in anti-tax email: Did Eyman go too far?

Here are the possible penalties:

  • Eyman and his for-profit company, Tim Eyman Watchdog for Taxpayers, could face $1.8 million in penalties, plus $308,000 in reimbursement.
  • For-profit, signature gathering organization Citizen Solutions and one of its principals, William Agazarm, could face penalties up to $924,555.

>> Related: Anti-tax activist going after state's car tabs

The complaint filed on Friday in Thurston County Superior Court stems from a state Public Disclosure Commission investigation and an investigation by campaign regulation group PDC. 

In response to the lawsuit, a lawyer for Eyman says his client "lawfully earned" money for his work.

Eyman's attorney Mark Lamb released the following statement on Friday afternoon: 

"For all of the heated rhetoric earlier today, this dispute is simple: whether two transactions needed to be included on campaign reports. The Attorney General believes they should, we do not. From the beginning, Mr. Eyman has made clear he did nothing wrong and the money he received was lawfully earned for the services he provided. The Attorney General has filed a suit against my clients today because (with the statute of limitations looming) these claims would have otherwise been time-barred.  Many plaintiffs overreach and file a kitchen sink of claims when they are faced with a statute of limitations deadline," Lamb wrote.

"Just last year the Attorney General attempted several politically motivated campaign finance prosecutions that have been dismissed on summary judgment.  Just this week, the Supreme Court denied the Attorney General’s request for direct review in one of these failed prosecutions.  The more I have examined the State’s claims in this matter the less impressed I am. Mr. Eyman has the same First Amendment rights as the Attorney General himself.  It is chilling that the stated purpose of this action is to permanently bar him from participating in the political process in this State."

"Cases are litigated in court, not press conferences. Indeed, in Washington state the special responsibilities of a prosecutor include the obligation to, 'refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused.' I will leave it to others to decide if this morning’s press conference meets that standard."

Ferguson will also ask the court to bar Eyman from participating in or directing financial transactions for any political committees going forward. 

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