Freedom Foundation

Freedom Foundation files complaint against AFSCME for major violations of Washington campaign finance rules

On July 3, the Freedom Foundation filed a complaint with the Washington Public Disclosure Commission (PDC) alleging one of the political funds operated by the national American Federation of State, County and Municipal Employees (AFSCME) has violated the state Fair Campaign Practices Act (FCPA) over a five-year period by failing to disclose tens of millions of dollars in contributions received and expenditures made to influence Washington elections.

AFSCME is one of the largest government unions in the country. Its national headquarters in Washington, D.C. operates at least two nationally focused political committees. One – Public Employees Organized for Legislative Equality (PEOPLE) – is primarily used to make contributions to candidates for federal office.

In accordance with the Federal Election Campaign Act (FECA), which prohibits unions and corporations from contributing to federal candidates with their own funds, PEOPLE is funded by voluntary contributions from AFSCME members in addition to their regular dues. The existence of PEOPLE is widely acknowledged and AFSCME regularly solicits contributions to PEOPLE from its members. In the 2017-18 election cycle, PEOPLE received $23.3 million in contributions, according to disclosures filed with the Federal Election Commission (FEC).

However, AFSCME also operates a second, far less visible fund, called the “Special Account,” which is funded primarily by AFSCME itself using union dues it collects from members. The money in the Special Account is used to influence state and local offices not subject to the FECA in states permitting the use of union dues for political contributions. Washington is one such state.

The existence of the Special Account is not acknowledged on AFSCME’s website. Because it does not contribute to federal elections, it files no reports with the FEC. Even the annual LM-2 financial report filed by AFSCME with the U.S. Department of Labor does not acknowledge the existence of the Special Account. Despite its relative obscurity, tax records show $41.3 million was poured into the Special Account in the 2017-18 election cycle, nearly double the amount raised by PEOPLE.

Perhaps it was the culture of secrecy surrounding the Special Account that led AFSCME to avoid complying with Washington campaign finance transparency rules.

In reports filed with the PDC since 2014, AFSCME disclosed making $540,000 in expenditures to political committees in Washington state from the Special Account. However, it failed to disclose an additional $250,000 in expenditures it made over the same period.

Further, AFSCME failed to disclose the sources of any of the funds used to influence Washington elections. While most of the funds come from AFSCME itself, a number of outside parties also contribute to the Special Account.

All told, since 2014, AFSCME failed to disclose 401 contributions the Special Account received from eight out-of-state contributors totaling $81.3 million, leaving Washingtonians unable to account for the sources of the $790,000 the Special Account spent to influence Washington elections during that same period.

Lastly, the complaint alleges the Special Account may have further violated the FCPA by failing to disclose hundreds of thousands of dollars in independent expenditures made to influence Washington elections. The Special Account paid two Seattle-based political consulting firms, Cerillion N4 Partners and Hopkins & Sachs, a total of $272,764. If these payments were for political advertisements pertaining to Washington elections, they should have been disclosed to the PDC as independent expenditures.

The Freedom Foundation documented AFSCME’s lack of compliance with the FCPA using more than 500 pages of tax filings submitted to Internal Revenue Service by AFSCME on behalf of the Special Account, which is registered as a “political organization” for tax purposes.

The PDC has designated the complaint as Case No. 54145.

Freedom Foundation’s complaint against AFSCME is the latest in a series of similar, Freedom Foundation-initiated campaign finance lawsuits and investigations involving unions’ political activity in Washington.

Unfortunately, after the state Legislature changed the enforcement process for campaign finance violations in 2018 and 2019, the PDC has not been entirely consistent in its enforcement of the law. Just last month, the Freedom Foundation filed suit against the PDC for failing to take appropriate action against a national SEIU political fund similar to AFSCME’s Special Account, despite all parties admitting significant violations took place.

Hopefully the PDC’s reluctance in that case was merely an aberration. In the case of AFSCME’s Special Account, the violations involve too much money to be easily ignored.