Washington state

Eyman associates ordered to pay $1M penalty after kickback scheme with anti-tax activist

Initiative activist Tim Eyman appears in Thurston County Superior Court, Friday, Feb. 22, 2019, in Olympia. A Thurston County Superior Court judge on Monday, Sept. 30, 2019, ordered for-profit signature-gathering firm Citizen Solutions and its principal, William Agazarm, to collectively pay more than $1 million for deceiving Washington state residents by funneling their campaign donations to Eyman for Eyman’s personal use.
Initiative activist Tim Eyman appears in Thurston County Superior Court, Friday, Feb. 22, 2019, in Olympia. A Thurston County Superior Court judge on Monday, Sept. 30, 2019, ordered for-profit signature-gathering firm Citizen Solutions and its principal, William Agazarm, to collectively pay more than $1 million for deceiving Washington state residents by funneling their campaign donations to Eyman for Eyman’s personal use. AP

A Thurston County Superior Court judge ordered a signature-gathering firm and its principal to pay $1 million for funneling campaign donations to anti-tax activist Tim Eyman.

The ruling is the latest development in a campaign finance lawsuit Attorney General Bob Ferguson filed two years ago against Eyman, Citizen Solutions LLC and one of its owners, William Agazarm, accusing the firm and Agazarm of unlawfully concealing a $308,185 payment in 2012 to Eyman.

In an order late Monday, Judge James Dixon ruled that Agazarm of Citizen Solutions approved a kickback payment to Eyman, knowing that Eyman “planned to and, in fact, did use the funds for his own personal expenses and to support the signature-gathering effort for a different Eyman-supported initiative, I-517.” The state’s voters in 2013 rejected the initiative, which would have established penalties for retaliating against petition drive efforts for a ballot initiative.

The attorney general’s office said Eyman created “gift schemes” for Citizen Solutions and its owners to “funnel money” to him. Records obtained in Ferguson’s investigation document several $13,000 payments to Eyman and his family members from the owners of Citizen Solutions Inc., a predecessor to the limited liability company. The amount was the maximum “gift” that Eyman’s accountant told him in 2011 that he could receive without it being reported to the Internal Revenue Service, the attorney general’s office said.

Ferguson’s office said Eyman had Citizen Solutions’ owners divide his kickback among his wife, Karen, and their minor children so none of the checks would be more than $13,000. Karen Eyman said in a deposition that she and the children were unaware of the payments even though the checks were made out to them, according to the attorney general’s office.

Dixon’s default judgment orders:

  • Agazarm to pay $150,000 in civil penalties.
  • Citizen Solutions to pay $150,000 in civil penalties.
  • Agazarm and Citizen Solutions jointly to pay $117,500 in unpaid contempt sanctions.
  • Agazarm and Citizen Solutions to pay $622,255 in costs and fees.

Dixon’s order comes nearly a month before the Nov. 5 general election. The statewide ballot includes the Eyman-led Initiative 976, which would cap state and local car tab fees at $30 unless voters approve another amount. It also would reduce or remove the authority of state and local governments to charge several motor vehicle taxes and fees that pay for transportation projects.

Reached for comment, Eyman did not address Dixon’s 25-page order. In an email, Eyman said: “As a political activist, I’m focused on passing our $30 Tabs Initiative, raising funds to get paid back the ($500,000) Karen and I loaned to get it qualified, and asking friends for help with my legal defense fund so we can survive the ($900,000-plus) the AG’s litigation has cost us so far.”

Mark Lamb, a Bothel attorney representing Citizen Solutions and Agazarm, declined comment on Dixon’s order.

Last month, Dixon sanctioned Eyman and ruled that more than $766,000 given to him between February 2012 and July 2018 are contributions in support of ballot initiatives, not “gifts” from supporters as Eyman had claimed.

“The law requires that all contributions be reported to the public at the time they are made,” Ferguson said in a Sept. 13 written statement. “Mr. Eyman has never reported these contributions. He ignored the law, and shielded his contributors from public view. Translation — this means that Tim Eyman concealed more than $766,000 in campaign contributions and the state can and will seek additional penalties for every day he fails to report them.”

The attorney general’s office said the $766,000 was separate from Eyman’s alleged improper personal use of more than $300,000 in contributions made to political committees and concealment of more than $490,000 in contributions that prompted Ferguson to file a lawsuit against Eyman, Citizen Solutions, and Agazarm.

Ferguson filed the lawsuit after the state Public Disclosure Commission in 2015 referred the matter to him for enforcement, with its chair calling the case “one of the most egregious the PDC has seen.”

James Drew covers the state Legislature and state government for McClatchy’s Washington papers: The News Tribune, The Olympian, The Bellingham Herald and The Tri-City Herald.
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