WA Federation of State Employees/AFSCME Council 28: Alleged violation of RCW 42.17A.205 by failing to register as a political committee. (Apr '21)

Case

#89278

Respondent

Washington Federation of State Employees/AFSCME Council 28

Complainant

Maxford Nelsen

Description

A complaint was filed against the Washington Federation of State Employees (WFSE), alleging that WFSE violated RCW 42.17A by failing to register and report as a political committee for: (1) Calendar year 2016 based on an Out-of-State Political Committee report (C-5 report) filed by American Federation of State, County and Municipal Employees Special Account (AFSCME) disclosing a $200,000 contribution made on September 9, 2016, to AFSCME Washington Council 28 (WFSE), and listing the purpose as “Grant to an affiliate”; and (2) Calendar year 2018 based on a $15,000 contribution disclosed by the Retired Public Employees Council of Washington PAC as having been received from WFSE in September of 2018.

WFSE is a statewide labor organization that is affiliated with American Federation of State, County, and Municipal Employees (AFSCME). WFSE has a Separate Segregated Fund (SSF) that is registered under Section 527 of the Internal Revenue Code, and reports to the Internal Revenue Service (IRS) under the name WFSE – SSF. WFSE is also a Lobbyist Employer that has been registered and reporting with the Public Disclosure Commission (PDC) since the 1970s.

Mr. Iglitzin and Ms. Franco-Malone stated allegation concerning the $200,000 grant received in 2016 “is identical in many key respects” to the two prior FF complaints filed against WFSE: PDC Case Number 14266, filed on January 17, 2017; and PDC Case No. 62411, filed on January 2, 2020. After reviewing those complaints, PDC staff determined WFSE was not required to register the SSF as a political committee, because “the SSF is an account established, controlled, and funded by WFSE, such that expenditures from the SSF are the equivalent of expenditures from WFSE’s general fund.”

Mr. Iglitzin stated, “there is no dispute that WFSE’s SSF is managed, operated, funded and directed entirely by WFSE itself. WFSE’s Executive Director makes all final approvals of monies provided to and spent from the SSF. He stated stated FF has provided no evidence indicating that the $200,000 in question was deposited into WFSE’s SSF. Mr. Iglitzin confirmed that the $200,000 was deposited into WFSE’s member dues account, the primary account used by WFSE to pay for all its representational and operational expenses.

Mr. Iglitzin and Ms. Franco-Malone stated no evidence was provided of “any connection between the AFSCME money received by WFSE and any political expenditures or contributions subsequently made by WFSE. Thus, the claim that WFSE received this money from AFSCME for electoral political purposes must be rejected as lacking any factual basis.”

Concerning the allegation of the $15,000 WFSE expenditure to Retired Public Employees Council of Washington, Mr. Iglitzin and Ms. Franco-Malone stated it was part of a $15,000 transfer that was received by “WFSE from AFSCME in late August of 2018.” They stated that the $15,000 in funds received by WFSE, were then “transmitted to the Retired Public Employees Council of Washington (RPEC), a Section 501(c)(4) social welfare organization, which was subsequently deposited into the Retired Public Employee Council of Washington PAC, a Section 527 political organization.

Mr. Iglitzin and Ms. Franco-Malone stated that the $15,000 was received and disclosed by RPEC PAC as a contribution from WFSE on a Monetary Contributions Report (C-3 report) as being received on September 4, 2018. They stated that “WFSE never intended the $15,000 that it had received from AFSCME to go into RPEC’s PAC.”

PDC staff requested that WSFE provide a copy of the cancelled check, which Ms. Franco-Malone included as part of her June 18, 2021, email response as an attachment. Staff reviewed the cancelled check which stated WFSE check #102026 was made out to RPEC on August 31, 2018, in the amount of $15,000, and included the address 906 Columbia Street SW, Suite 501, Olympia, WA 98501-1240. Staff’s review confirmed that the check did not include the word “PAC.”

PDC staff’s review of the 2018 LM-2 Report filed by AFSCME and included as part of the supplemental complaint information provided by FF, found that under Section 16 – Political Activities and Lobbying on page 305 of the Report listed a $15,000 expenditure was made on August 27, 2018, to AFSCME WA Council 28 for “State and Local Political Program Support.”

Ms. Franco-Malone stated that WFSE “Council 28 and RPEC are both affiliates of AFSCME” and that current RPEC members are former members of WFSE. She stated that when WFSE members retire from Washington State service, the members have the option of joining RPEC, in which they receive WFSE communications that includes information about legislation that may affect members pensions and healthcare. In addition, she stated “WFSE works with RPEC to coordinate retirement planning workshops for WFSE members. WFSE pays RPEC to present at those workshops.”

PDC staff’s review of the 2016 LM-2 Report filed by AFSCME found that under Section 19 – Union Administration on page 205 of the Report listed a $10,841 expenditure was made on September 21, 2016 to the Retired Public Employees Council of Washington for “Postage.”

Based on the above information, PDC staff found no evidence warranting an investigation into whether WFSE was acting as a political committee, based on either the $200,000 grant received from AFSCME in 2016, or the $15,000 transfer WFSE made to RPEC in 2018.

As noted in the disposition letter for PDC Case Number 62411, there was no evidence found or provided that the $200,000 in AFSCME funds received by WFSE in 2016 was deposited into their SSF, but instead the funds were deposited into WFSE's general treasury. The deposit of the $200,000 grant received from AFSCME and deposited into WFSE's general treasury did not make WFSE or WFSE's general treasury account a political committee as a receiver of contributions. Likewise, there is no basis to conclude that one of WFSE’s primary purposes during the calendar year 2018 was to support or oppose candidates or ballot propositions.

The $15,000 expenditure made from WFSE to RPEC in 2018, was not intended by WFSE to be received and deposited by RPEC into its political committee account. The $15,000 expenditure did not make WFSE a political committee under the expenditures prong of the primary purpose test.

PDC staff dismissed this matter in accordance with RCW 42.17A.755(1).

Disposition

Case Closed with No Evidence of Violations

Date Opened

April 21, 2021

Areas of Law

RCW 42.17A.205