State v. Eyman

Decision Date06 December 2022
Docket Number56653-2-II
PartiesSTATE OF WASHINGTON, Respondent, v. TIM EYMAN, individually, as committee officer for Voters Want More Choices - Save the 2/3s and Protect Your Right to Vote on Initiatives, and as principal of TIM EYMAN WATCHDOG FOR TAXPAYERS, LLC; TIM EYMAN WATCHDOG FOR TAXPAYERS, LLC, a Washington limited liability company, Appellants WILLIAM AGAZARM, individually and as a principal of CITIZEN SOLUTION LLC, a Washington limited liability company; and CITIZEN SOLUTIONS LLC, a Washington limited liability company, Defendants.
CourtWashington Court of Appeals

MAXA P. J.

Tim Eyman and Tim Eyman Watchdog for Taxpayers, LLC (collectively Eyman) appeal the trial court's ruling that Eyman engaged in multiple violations of the Fair Campaign Practices Act (FCPA), the imposition of a monetary penalty of over $2.6 million, and an injunction prohibiting Eyman from engaging in a wide range of activities. The violations arose from four incidents.

First Eyman filed initiative 1185 in 2012 and served as an officer on the campaign committee. The committee hired Citizen Solutions to collect signatures to help I-1185 qualify to be on the ballot, agreeing to pay a fixed price per signature. Eyman agreed with Citizen Solutions to increase the price per signature twice during the campaign. The committee reported all payments to Citizen Solutions to the Public Disclosure Commission (PDC). After the I-1185 campaign ended, Citizen Solutions paid Eyman $308,185.50. Neither the campaign committee nor Eyman reported the payment to the PDC.

Second Eyman filed initiative 517 later in 2012, and served as an officer on the campaign committee. Eyman paid $200,000 to Citizens in Charge, characterizing it as a loan. Citizens in Charge then provided $182,806 of in-kind signature gathering services to the I-517 campaign. Citizens in Charge later paid Eyman $103,000, which was characterized as repayment of the loan. The committee reported Citizens in Charge's in-kind donation to the PDC, but Eyman did not report the loan or the payment he received.

Third in 2017 Eyman's political committee was owed a $23,008 refund from Databar, Inc., a vendor. Instead of the refund being returned to the committee, the refund was transferred to Eyman's personal account. Neither the committee nor Eyman reported this payment.

Fourth, Eyman solicited donations from supporters to pay for his living expenses. The donations were not for any specific initiative campaign, but Eyman communicated that he needed the donations to continue working on ballot initiatives. He received over $800,000 in donations, which he used for personal purposes. Eyman did not register as a political committee or a continuing political committee or report any of these donations to the PDC.

Following a bench trial, the trial court ruled that Eyman violated the FCPA by failing to report to the PDC (1) that certain payments made to Citizen Solutions were to pay Eyman rather than for signature gathering, (2) the loan he made to Citizens in Charge and the payment he received from Citizens in Charge, (3) the Databar refund he received, and (4) the personal contributions he received. The court imposed a civil penalty against Eyman totaling over $2.6 million and awarded over $2.8 million in reasonable attorney fees and costs to the State. The court also issued an injunction, precluding Eyman from engaging in certain activities regarding political committees and from receiving any gifts or donations without establishing a political committee.

We hold that (1) the trial court did not err in ruling that Eyman violated the FCPA by improperly reporting and concealing the $308,185.50 payment from Citizen Solutions, (2) the trial court did not err in ruling that Eyman violated the FCPA by making $200,000 in loans to Citizens in Charge to use to support I-517 and thereby concealing the source of his contributions to I-517, (3) the trial court did not err in ruling that Eyman violated the FCPA by failing to report his receipt of the $23,008 Databar refund, (4) the trial court did not err in concluding that Eyman's receipt of personal contributions to allow him to work on ballot initiatives made him a "political committee" and a "continuing political committee" and therefore that Eyman violated multiple reporting requirements, (5) the FCPA is not unconstitutional as applied to Eyman, (6) the trial court's injunction provisions are not unconstitutional, and (7) the trial court did not err in awarding attorney fees to the State under RCW 42.17A.780.

However, we also hold that (1) the trial court erred in ruling that Eyman violated the FCPA by failing to report the $103,000 payment he received from Citizens in Charge, (2) the FCPA does not authorize the trial court's injunction provisions prohibiting Eyman from misleading potential donors and receiving payments from vendors, and (3) we cannot determine on this record whether the monetary penalty imposed on Eyman violated the excessive fines clauses in the United States and Washington constitutions in the absence of sufficient evidence regarding Eyman's ability to pay the penalty.

Accordingly, we affirm in part and reverse in part the trial court's final judgment, and remand for the trial court to (1) vacate the conclusion that Eyman violated the FCPA by failing to report the $103,000 payment he received from Citizens in Charge, (2) strike the injunction provisions prohibiting Eyman from misleading potential donors and receiving payments from vendors, and (3) consider Eyman's ability to pay the penalty imposed and to adjust the penalty if necessary to comply with the excessive fines clause.

FACTS
Citizen Solutions Payment to Eyman

In January 2012, Eyman filed with the Secretary of State an initiative to the people that was labeled as I-1185. According to its official ballot title, I-1185 "would restate existing statutory requirements that legislative actions raising taxes must be approved by two-thirds legislative majorities or receive voter approval, and that new or increased fees require majority legislative approval." Clerk's Papers (CP) at 5. Eyman also formed a political committee called "Voters Want More Choices - Save the 2/3rds (Mike Fagan)" (VWMC) to advocate for I-1185. Eyman, Mike Fagan, and Jack Fagan were listed in the PDC filings as officers, and Stan Long was listed as treasurer.

In April 2012, VWMC entered into a contract with Citizen Solutions to obtain up to 300,000 signatures in support of I-1185 at a price of $3.50 per signature. Edward Agazarm, Roy Ruffino, and Edward's son William Agazarm were the principals of Citizen Solutions.

On May 15, William Agazarm emailed Eyman about raising the price from $3.50 to $4.00 for the remaining 200,000 signatures. Eyman agreed to the $0.50 increase for signature collection.

On June 5, Eyman emailed Ruffino and William Agazarm with a copy to Edward Agazarm about joining Citizen Solutions as a partner. Eyman stated that he was working hard to get an extra $270,000 for himself by getting it paid to Citizen Solutions. If they could not agree on a partnership, he proposed that the $270,000 be paid to his company, Tim Eyman, Watchdog for Taxpayers, LLC (Watchdog), as a sales commission.

On June 26, Edward Agazarm emailed Eyman regarding an additional increase in the per signature price. He stated that the "$270,000 outstanding on the signature contract has hampered our efforts and is tying our hands." Ex. 85. On June 27, William Agazarm emailed Eyman and urged him to increase the cost per signature price by $1.50. Eyman agreed. Eyman then sought additional contributions from donors.

Citizen Solutions made the final payment to its signature gathering contractors on July 3. On July 5, VWMC paid Citizen Solutions the final agreed amount remaining of $170,825. Eyman continued to solicit donations. Citizen Solutions received direct payments from the Washington Wine and Beer Wholesalers Association for $27,150 on July 5 and from the Association of Washington Businesses for $45,000 on July 6. The petitions with the required number of signatures were submitted to the Secretary of State on July 7.

On July 9, Eyman sent a letter to Citizen Solutions agreeing to perform consulting work for the next three years in exchange for payment to Watchdog of $300,000. On July 11, Citizen Solutions transferred $308,185.50 into Eyman's account.

VWMC reported to the PDC all payments to Citizen Solutions for signature gathering, and also reported in-kind contributions from various business groups that paid Citizen Solutions directly. Neither VWMC nor Eyman reported to the PDC the $308,185 payment from Citizen Solutions to Eyman.

Eyman Loan to Citizens in Charge

In April 2012, Eyman filed with the Secretary of State an initiative to the people that was labeled as I-517. According to its official ballot title, I-517 "would set penalties for interfering with or retaliating against signature-gatherers and petition-signers; require that all measures receiving sufficient signatures appear on the ballot; and extend time for gathering initiative petition signatures." CP at 5. Eyman also formed a political committee called "Protect Your Right to Vote on Initiatives" (PRVI) to advocate on behalf of I-517. Again, Eyman, Mike Fagan, and Jack Fagan were listed in the PDC filings as officers, and Stan Long was listed as treasurer.

Beginning in July 2012, Watchdog loaned a total of $200,000 in four installments to Paul Jacob at Citizens in Charge to fund the I-517 campaign. The loan was to help get I-517 on the 2013 ballot. Eyman then reached out to potential donors, asking them to make anonymous, tax deductible donations to Citizens in Charge to support I-517.

Citizens in Charge ultimately paid for...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT