by Jerry Cornfield, Washington State Standard
October 9, 2024
Let’s Go Washington was fined $20,000 on Wednesday for failing to report spending by companies hired to gather signatures for its six statewide initiatives and for slow-walking delivery of documents to investigators.
The state Public Disclosure Commission assessed the civil penalty in a written ruling issued one week after a lengthy hearing and nearly 15 months after initiative opponents first filed their complaint against the political committee founded by hedge fund millionaire Brian Heywood. Three of the group’s initiatives will be before voters on the November ballot.
Commissioners concluded the political committee violated state campaign finance laws by not obtaining and disclosing information on payments to sub-vendors used by signature-gathering firms. They also found Let’s Go Washington did not hand over financial records in a timely fashion as it took a July subpoena before it produced 9,000 pages of materials.
The commission imposed a civil penalty of $10,000 for each violation. It suspended half the sum as long as $10,000 is paid in 30 days and Let’s Go Washington “uses due diligence to determine if subvendors were used by its contracted vendors.” The group must inform the Public Disclosure Commission in writing if no sub-vendors were used.
In the Oct. 3 hearing, leaders of Let’s Go Washington said they were unaware of any spending on sub-vendors and thus could not have violated any reporting laws.
Commissioners disagreed, citing emails and testimony from a senior compliance officer with the watchdog agency that at least two of the firms used sub-vendors and suggesting the political committee didn’t push hard enough to get this information.
“Failing to ask or failing to follow up on a contractor’s non-response or refusal to provide the information is insufficient,” commissioners wrote in their ruling. “If this were the standard, any committee could simply ignore the issue and argue it has no knowledge of its contractor’s actions and nothing to report.”
Heywood said Wednesday the committee is “evaluating our options” as the commission ruling plows new regulatory ground based on an “unidentified standard.”
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The precedent it sets is that If the commission “feels” that an organization should have evidence its vendors used sub-vendors, it can fine that organization $10,000, he said.
“Even if the PDC has no evidence, and even if the organization testifies under oath they were not aware of any sub-vendors, that organization is still fined $10,000,” Heywood said. And if the organization can provide evidence that no sub-vendors were employed, it is still fined, he said.
In a win for Let’s Go Washington, commissioners concluded the committee acted in line with disclosure laws when it treated signature-gathering for the slate of measures as a single undertaking and reported what was raised and spent in lump sums.
Subsequently, at the commission staff’s request, the committee filed nearly two dozen amended reports detailing specifics on amounts raised and spent for each individual initiative.
“There is no dispute that we filed all of our disclosures in accordance with the law,” Heywood said.
Lengthy investigation
This dispute is rooted in Let’s Go Washington’s success last year in gathering hundreds of thousands of signatures of registered voters for six initiatives to the Legislature. Lawmakers adopted three – dealing with guidelines for police pursuits, parental rights and taxes.
Voters on Nov. 5 will decide the fate of three others that seek to repeal Washington’s capital gains tax and cap-and-trade system, and make the state’s new long-term care services program voluntary.
A coalition of progressive groups opposed to the ballot measures filed a complaint in July 2023 alleging Let’s Go Washington needed to disclose more details on how much it spent for each of the six initiatives. Its members had been pressing for resolution before the election.
The group, Defend Washington, said in a statement Wednesday the commission action is “an important step” toward holding the initiative proponents accountable.
“It’s now clear that from the outset Let’s Go Washington has been determined to conceal important information from and mislead voters about their dangerous and destructive ballot initiatives and how they were qualified for the ballot,” the statement reads.
Heywood said his group is filing complaints with the Public Disclosure Commission against Defend Washington and five other progressive-leaning political committees, alleging each failed to disclose payments to sub-vendors.
“The same investigative standard should be applied to all organizations,” Heywood said.
‘Especially concerning’
On Sept. 9, Public Disclosure Commission staff filed administrative charges and last week’s hearing delved into the alleged violations.
One allegation accused the committee of not “timely and accurately” reporting spending because initial reports should not have lumped spending together for all of the six initiatives.
Commissioners disagreed.
There was no violation because the committee followed the commission’s rules even if the “plain reading” is later interpreted by staff “as imperfectly reflecting statutory intent,” commissioners ruled. “When asked later to report how the expenditures were distributed between the six ballot propositions, [Let’s Go Washington] eventually did so, even though PDC rules at the time did not require it.”
The violations that spurred the fine center on Let’s Go Washington’s less than robust attempts to get information from two signature-gathering firms Your Choice Petitions and Allstate Petition Management.
Phil Stutzman, veteran compliance officer for the commission, testified last week that Brent Johnson, owner of Your Choice Petitions, acknowledged using sub-venders when the two spoke by phone. And Stutzman said an email from the leader of the other firm implied they did too.
Let’s Go Washington leaders wrote to Roy Ruffino, Allstate Petition Management’s top executive, requesting details on payments to subcontractors. Ruffino replied that what it sought “is proprietary information and is outside the realm of reason to disclose to you.” The committee didn’t pursue it further.
The Public Disclosure Commission said that was wrong.
Let’s Go Washington’s “failure to report is especially concerning here” because the contractor implied they did utilize sub-vendors and the political committee continued to pay the firm and eventually hired Ruffino, commissioners wrote. GET THE MORNING HEADLINES.
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