Freedom Foundation

Freedom Foundation sues PDC, again, for ignoring union violations of campaign finance laws

The Freedom Foundation filed litigation this week against the Washington State Public Disclosure Commission (PDC) in Thurston County Superior Court — its third such lawsuit pending against the state’s campaign finance watchdog over its failure to hold labor unions accountable for breaking state election laws.

The newest action involves the PDC’s unfounded dismissal of the Freedom Foundation’s December 2018 complaint alleging the Amalgamated Transit Union Legislative Council of Washington (ATULC) failed to register with the PDC as a political committee and disclose its political expenditures. The complaint was assigned PDC Case No. 43940.

Under Washington’s Fair Campaign Practices Act (FCPA), any entity that: (1) receives contributions of funds to spend influencing elections; and/or (2) has as one of its primary purposes spending money to influence elections must register with the PDC as a political committee and publicly disclose all the money it receives and spends.

As the Freedom Foundation documented in its 250-page complaint, ATULC is funded by contributions it receives from — and is run by volunteer officers of — the various Amalgamated Transit Union locals in Washington. Other than administrative expenses, ATULC’s only expenditures are for lobbying the state Legislature and making political contributions to candidates and political committees.

ATULC has also described its purpose in explicitly political terms. In a filing with the Internal Revenue Service (IRS) claiming tax status as a “political organization,” ATULC described its purpose, under penalty of perjury, as “promot(ing) legislation and candidates supportive for Amalgamated Transit Union member(s) in the state of Washington.” It also falsely told the IRS it reported its political activity to officials in Washington state which, had it been true, would have freed ATULC from the obligation to report the same information to the IRS.

ATULC’s own website even describes its purposes as engaging in “political activity,” “(promoting) and (supporting) new legislation… by lobbying,” forming “a stronger political bond of cohesion with the Washington State Labor Council” and encouraging ATU members “to be politically alert.”

In its response to the complaint, the ATULC invented a new description of its purpose, cleansed of political references and unsupported by any evidence: “(F)unctioning as a forum for Washington State ATU locals and providing educational training for those locals and their members, as well as to support substantial lobbying efforts at ATULC’s expense.”

While ATULC readily acknowledged lobbying as one of its primary purposes, in some years it spent nearly twice as much on political contributions as it did on lobbying, yet claimed that political activity was not one of its primary purposes. Such spending indicates that electoral political activity is at least one of ATULC’s primary purposes, if not the primary purpose.

ATULC also understated the amount of money it spent on politics. Asked by the PDC how much it spent each year, it initially responded that, “The best accounting of ATULC’s ‘PDC contributions,’ as defined above, will be found in the PDC’s database, as all of those contributions would have been reported by the recipients.” This is precisely the method the Freedom Foundation used to document ATULC’s political expenditures in its original complaint, and subsequent research uncovered even more expenditures.

All told, PDC records indicate ATULC’s political expenditures were at least $24,650 in 2014, $45,550 in 2016, and $32,150 in 2018, accounting for 31, 45 and 31 percent of its total annual expenditures, respectively. Overall, it spent more than $110,000 on Washington elections from 2014 to 2018.

And yet, when pressed by the PDC, ATULC claimed, without any documentation, it only spent $18,745 on politics in 2014, $35,451 in 2016, and $31,367 in 2018, accounting for 23, 35 and 30 percent of its total annual expenditures respectively.

Incomprehensibly, the PDC agreed ATULC did not qualify as a political committee, dismissing the complaint on April 8 (although it did fine ATULC $150 for filing a lobbyist form a year late, a violation not included in the Freedom Foundation’s complaint).

The PDC did not explain:

  • why it ignored the records in its own database showing ATULC spent more on politics than its attorney claimed;
  • how ATULC could spend 45 percent of its total expenditures on politics in 2016, yet not have political activity qualify as one of its primary purposes given that, mathematically, it could only have one purpose greater than politics and, in which case, political activity would still be at least one of its primary purposes;
  • how, under PDC regulations, an out-of-state political committee with limited reporting obligations becomes a political committee with full reporting obligations if more than 20 percent of its expenditures, at any point in a calendar year, are for Washington elections, but ATULC is somehow not a political committee despite admittedly crossing this threshold each election year;
  • how lobbying is always a primary purpose of ATULC but electoral politics never is, even though ATULC spent more on politics than lobbying in some election years; or
  • why it disregarded ATULC’s documented, explicitly political descriptions of its purpose and accepted the unsupported, non-political description invented by the union’s attorney.

The Freedom Foundation explained these issues to the PDC and asked it to take another look at the case, but the agency refused to do so, leaving the Foundation no choice but to take the matter to court.

In similar ongoing lawsuits, the PDC has taken the position that decisions by its staff to dismiss a complaint are final and entirely unreviewable. According to the PDC, not only are such decisions immune from court review, but a complainant cannot even appeal the staff’s decision to the five PDC commissioners appointed by the governor.

This level of discretion on the part of PDC staff, if ultimately upheld by state courts, would effectively give unelected bureaucrats the ability to shield anyone they wish from consequences for violating campaign finance laws.

Unfortunately, evidence continues to mount that PDC staff are willing let unions off the hook for even serious violations.

Historically, the FCPA permitted persons alleging violations of campaign finance rules to file litigation in state courts against the alleged violator if state authorities refused to take action. This “citizen action” process served as an important check on the power of the PDC. Nonetheless, the Legislature effectively did away with the decades-old process in 2018.

Hopefully state courts reject the PDC’s sweeping assertions of discretion and recognize at least some mechanism for judicial review of PDC actions. Regardless, the Legislature should reinstate the citizen action process that, for so long, helped ensure all political players in Washington played by the same rules.