BIAW group, AG agree on fines

Election: Lawsuit from 2008 donation

September 25, 2010 

An arm of the Building Industry Association of Washington agreed Friday to pay $242,000 in fines to settle a lawsuit over its one-year delay in reporting campaign money raised in 2007 to aid Dino Rossi’s most recent run for governor.

The state Attorney General’s Office announced the $584,000 settlement, which included a suspension of $342,000 in fines if BIAW’s Member Services Corporation avoids campaign-finance violations through 2016.

“This judgment is the second-highest that’s been awarded recently in cases involving the Public Disclosure Commission,” PDC spokeswoman Lori Anderson said Friday. The larger case was the $975,000 in sanctions imposed this year on the Washington Education Association over allegations it used nonmembers’ fee payments to promote citizen initiatives in the 2000 election.

The Member Services Corporation had asked local homebuilder groups to set aside a portion of “Retro” industrial insurance rebates to assist BIAW’s political activities in 2008. That money later was used to aid BIAW’s multimillion-dollar effort through the It’s Time for a Change PAC to help Rossi and attack Gov. Chris Gregoire in the campaign.

The settlement ends a nasty fight between BIAW and Republican Attorney General Rob McKenna. McKenna’s staff members had offered a $900,000 settlement in October. BIAW rejected it, calling it a form of extortion and offering to pay $10,000. BIAW staff members at times compared McKenna unfavorably with Gov. Chris Gregoire – one of BIAW’s political enemies.

BIAW attorney Martin Meyer said earlier in the month that the case was going to mediation. The parties finally came together, and the judgment against BIAW’s MSC was signed Friday by Judge Richard D. Hicks of Thurston County Superior Court.

BIAW spokeswoman Erin Shannon said there is no admission of wrongdoing and that builders settled to avoid further litigation and “the burdensome discovery” McKenna sought in the case.

“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 said.

Shannon also said the settlement requires that its Member Services Corporation unit file as a PAC as a one-time event.

The original case against BIAW was spurred by a complaint by two retired former state Supreme Court justices with Democratic ties. They argued through their attorney, Knoll Lowney, that BIAW’s Member Services Corporation should have registered as a political committee.

Aaron Ostrom of the liberal activist group Fuse worked with Lowney and Justices Faith Ireland and Robert Utter in bringing complaints against Rossi and BIAW to light in 2008, including Lowney putting Rossi under oath in a deposition during the campaign.

Ostrom lauded the settlement and the size of the fine.

“I think it sends a pretty clear message that BIAW’s big dance with Dino wasn’t legal,” he said. “I think the size of the fine sends that message. Also, the timing is a little inauspicious for the favored son. (Builders) are his best friend and his worst enemy.”

The Attorney General’s Office said in a news release that besides paying the $242,000 fine, BIAW must pay $50,000 in attorney’s fees to the state.

BIAW has been fighting legal challenges on other fronts. In a separate case, Thurston County Judge Carol Murphy expects to rule next week on civil allegations brought by Lowney against the BIAW and MSC over their handling of “Retro” insurance rebates.

BIAW has contended it is the victim of efforts by its political enemies to silence its right to free speech and advocacy on behalf of conservatives and business interests in Washington.

Brad Shannon: 360-753-1688

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