Ferguson, Bob: Alleged violations of Chapter 42.17A RCW for invalid use of campaign and surplus funds, accepting unauthorized contributions, and failure to accurately and timely report contributions, expenditures, debts, committee officers, and sponsor ID

Case

#28291

Respondent

Bob Ferguson

Complainant

Glen Morgan

Description

A complaint was filed against the the 2016 Robert Ferguson for Attorney General Campaign, alleging violations that included the following: (1) RCW 42.17A.430 for using surplus funds to make a contribution to the Eastside Democratic Diner Committee, and an expenditure for King County Bar Association membership dues; (2) RCW 42.17A.235 and .240 for failing to timely and accurately file C-3 and C-4 reports disclosing contribution and expenditure information, including debts and obligations; providing a detailed breakdown of sub-vendor and description of expenditures; and failing to maintain campaign records; (3) RCW 42.17A.405 for accepting contributions from corporations not doing business in the state of Washington, and for failing to return contributions within 10 days; (4) RCW 42.17A.205 for failure to accurately and completely report committee officers and other required information on the C-1 report; (5) RCW 42.17A.425 for allowing persons not listed as committee officers to authorize expenditures on behalf of the campaign.

A number of the allegations listed in the complaint were based “on information and belief”, but failed to provide any evidence to support or substantiate those allegations. PDC staff has dismissed those allegations in accordance with RCW 42.17A.755(1).

The Campaign noted they received almost $800,000 in contributions and made more than $500,000 in expenditures, which constituted “significant” contribution and expenditure activities, and added that during the course of the election, the Campaign “demonstrated proactive steps to be as transparent as possible.”

As noted in the attached complaint return letter, a number of the allegations listed in the complaint concerned information disclosed on amended C-3 and C-4 reports filed by the Campaign. Staff’s review of the initial and amended C-3 and C-4 reports filed by the Campaign indicated the Campaign made good faith effort was made to comply with the PDC reporting requirements for the 2016 election, and that dating back to 2009, the Campaign filed 40 amended C-3 reports and 20 amended C-4 reports providing additional and/or updated disclosure information as they became aware of it.

Staff does not believe that “recurring expenditures” such as the expenditures referenced in the letter were reportable as debts or obligations in 2016 unless the scheduled payment due date was not met by the Campaign and the current reporting period has ended.

Staff did note there were expenditures made by the Campaign, either as reimbursements to individuals or volunteers, or payments made to a consultant or vendor for which it appears a more detailed description and possibly a sub-vendor breakdown likely should have been provided. In addition, the Campaign acknowledged failing to timely disclose debts for three expenditures listed in the complaint as noted above for a portion of unpaid legal services; and the two printing orders with Overnight Printing; and to file amended C-4 reports disclosing the required sub-vendor information for expenditures made to Media Mandate. Staff would classify these issues as reporting discrepancies which are minor in nature which do not rise to the level of any enforcement action.

Those issues are mitigated by the facts the Campaign was in frequent contact with PDC staff throughout the 2016 election in order to comply with the reporting requirements, and timely filed the overwhelming majority of the initially filed C-3 and C-4 reports on or before the required due date. In addition, the Campaign disclosed receiving more than $1.395 million in total contributions received and spent more than $1.395 million in expenditures that included $512,630 in expenditures made for the 2016 election and $883,000 in transfers to the surplus funds account.

PDC staff found no evidence of a material violation that would require conducting a more formal investigation into your complaints or pursuing enforcement action in this instance. However, staff has reminded the Campaign to provide a more detailed breakdown for expenditures made to reimburse individuals or payments made to consultants or vendors, including the sub-vendor breakdown, in the future. In addition, the Campaign was made aware of the changes to the disclosure of debt and other reporting requirements as part of the passage EHSB 2938.

Based on this information, PDC staff dismissed the remaining allegations listed in the complaint in accordance with RCW 42.17A.755(1).

Disposition

Case Closed with Reminder

Date Opened

December 11, 2017

Areas of Law

RCW 42.17A.220, RCW 42.17A.405, RCW 42.17A.425, RCW 42.17A.430, RCW 42.17A.445, RCW 42.17A.700, RCW 42.17A.710