BIAW to pay $242,000 fine in campaign finance case

September 24, 2010 

An arm of the Building Industry Association of Washington agreed today to pay $242,000 in immediate penalties to settle a lawsuit over its one-year delay in reporting money raised to aid Dino Rossi's 2008 campaign for governor.

The state Attorney General's Office announced the settlement. The settlement says BIAW's total fine is $584,000 – with $342,000 suspended – if the builders’ Member Services Corporation can avoid campaign-finance problems through 2016.

The MSC had asked local homeowner groups to set aside a portion of “retro” industrial insurance rebates in 2007 to assist BIAW’s political activities such as helping Rossi against Gov. Chris Gregoire the following year. But the money was not reported to the state Public Disclosure Commision for about one year, the PDC said.

The settlement ended a nasty fight between BIAW and AG Rob McKenna in which state lawyers suggested a $900,000 settlement last October and BIAW countered that it was “extortion.” The parties came together through mediation and the judgment against BIAW’s MSC was signed by Thurston County Judge Richard D. Hicks today in Superior Court.

"This judgment is the second highest that's been awarded recently in cases involving the Public Disclosure Commission," PDC spokeswoman Lori Anderson said. The other big-money case was the $975,000 in sanctions imposed on the Washington Education Association earlier this year over its use of non-members' fee payments to promote citizen initiatives in the 2000 election.

BIAW spokeswoman Erin Shannon said there is no admission of wrongdoing and builders settled to avoid further litigation and "the burdensome discovery" the AG requested in the case. Shannon added:

"I would say we agreed to this settlement because fighting government – which has access to unlimited resources in a government town with a government court predisposed to favor government – is a losing battle."

Shannon also said the requirement that its Member Services Corporation unit file as a PAC is a one-time requirement for a relatively small portion of MSC’s financial operation.

The AGO said in its news release:

Under the terms of the settlement filed in Thurston County Superior Court today, the BIAW-MSC was fined $584,000. The settlement requires BIAW-MSC to pay $242,000 in fines and an additional $50,000 in attorney fees within 30 days. As is common in these types of cases, the remaining $342,000 is suspended. BIAW MSC will immediately owe the suspended amount if it is found to have committed any new campaign law violations between now and Dec. 31, 2016.

In a separate case, a Thurston County judge expects to rule next week on civil allegations against the BIAW and MSC over its handling of “Retro” insurance rebates.

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