The Public Disclosure Commission’s July 27, 2023, regular meeting included an update on lobbying disclosure rulemaking, an announcement of upcoming engagement sessions with the regulated community and others, and decisions on several enforcement matters.
Perhaps the most anticipated of those rulings was regarding allegations that Spokane City Council member Zack Zappone failed to timely and accurately disclose contributions transferred from his 2020 campaign for the state Legislature to his 2021 campaign for Spokane City Council.
The Commission dismissed the case with a written order.
The Commission previously heard testimony on the case at its June 22 regular meeting in Spokane, but delayed a decision until the July meeting.
Under RCW 42.17A.490, a candidate who solicits contributions for a state, local, or judicial office may not use any unspent contributions to seek a different office without first obtaining written approval from the persons or entities who contributed the money.
PDC staff previously advised candidates to seek permission and then report the funds as a lump-sum transfer, which is consistent with how transfers to a subsequent campaign for the same office are treated under a different section of law, RCW 42.17A.430. When questions about that informal guidance recently were raised, the staff took the issue to the Commission for a decision.
On May 25, the Commission issued formal guidance regarding candidates’ use of unspent contributions received for a previous campaign for a different office.
The formal guidance states that candidates should seek permission from individual donors to transfer their donations to the new campaign, then report those contributors as donors to the new campaign. This would mean that a donor who contributed the full legal amount to the candidate’s first campaign, and whose money was transferred to the new campaign, could not legally donate again to the new campaign.
The guidance was issued after the transfers in the Zappone case took place. PDC staff asked the Commission to decide whether a violation had occurred.
In dismissing the matter against Zappone, the Commission cited that Zappone was following existing PDC guidance in 2021 and could not have foreseen the change in guidance in 2023. It also highlighted that the election in question is over, all funds have been spent and “the application of Interpretation 23-01 to completed prior year elections in this case is unwarranted.”
PDC plans engagement sessions
The Public Disclosure Commission is continuing its commitment to increase outreach to members of the public by scheduling meetings geared toward input and collaboration.
The first of these meetings is expected to run for two hours in late August. Possible topics could include discussions on the state law requiring certification that campaign contributions were not financed or influenced by foreign nationals and the requirement for contributors to list their employer after donating $250 or more to a campaign.
Commission Chair Nancy Isserlis plans to moderate the sessions. Anyone interested in participating or with suggested topics for discussion should email email@example.com.
After a successful meeting on the road in Spokane in June, the Commission also plans to schedule additional meetings outside Olympia in the coming months.
Agenda approved for upcoming rulemaking
PDC General Counsel Sean Flynn presented the agency’s Rules Development Agenda for the second half of 2023, which the Commission approved. The agenda is published in the state register and is available to the public.
The agenda includes four upcoming projects PDC staff plan to work on through the end of 2023. First, staff will work to update rules for lobbying reporting, including inflationary adjustments and implementation of recent legislation on grassroots lobbying. The PDC initiated the rulemaking process on this in May and plans to hold a public hearing on the updates this fall, with a goal of commission adoption by the 2024 legislative session.
Second, staff plans to work on implementation of legislation regarding the use of synthetic media, commonly known as “deepfakes.” A new state law creates a private cause of action against sponsors of electioneering communication using synthetic media without a disclaimer, and asks the PDC to adopt rules. The law would be enforced through court cases, rather than through the PDC’s normal enforcement procedures.
Third, staff plan to update rules to reflect legislation exempting Address Confidentiality Program participants from disclosing their primary residence on their Personal Financial Affairs Statement (F-1).
Lastly, staff plan to work to update PDC Interpretation 07-04 regarding online campaign activities and digital advertising. Staff hope to analyze use of social media, influencers, websites and other communication in relation to disclosure requirements and regulation of campaign expenditures.
Commission issues fines for repeat violations
The Commission imposed fines in four enforcement cases whose respondents were charged with repeat violations of campaign finance requirements.
Danny Walling, a former commissioner for Clark County Fire Protection District 10, was fined $10,000 with half suspended for failing to file his personal financial affairs statement, or F-1, for calendar year 2022 -- his seventh violation.
Walling, a fire commissioner since 2005, previously failed to file his 2019, 2020, and 2021 F-1s. He has an unpaid balance of $14,300 for past violations, some of which has been sent to collections.
Walling did not attend Thursday’s hearing.
Charla Neuman, a City of Sumner city council member, was fined $3,000, with $1,000 suspended if her penalties are paid and missing reports submitted within 30 days for her third violation.
Neuman was found in violation for failing to file her F-1 for calendar year 2022. She had previously been fined by the PDC for not filing her 2019, 2020 and 2021 F-1 statements. Past penalties in those cases total $2,250. Neuman attended Thursday’s meeting by telephone.
Dave Collins, a member of the Toutle Lake School Board, was fined $2,000 with $1,000 suspended if he pays outstanding fines and submits missing reports in 30 days, for a second violation of failing to file his F-1 for calendar year 2022.
He was previously found to be in violation for failing to file his F-1 for 2021 and fined $250. Collins told PDC staff he refused to fill out government forms. He attended Thursday’s meeting by telephone.
Pamela Martin, a Water and Sewer Commissioner for the Coal Creek Utility District, was fined $3,000 with $1,500 suspended if all outstanding fines are paid and reports submitted in 30 days. The PDC Commission found she filed to file her F-1 for 2022.
Martin has two prior violations for failing to file her F-1 in 2020 and 2021. Martin paid a $250 fine from the 2020 violation, but has not paid a $1,000 fine for the 2021 violation. She has also not filed the outstanding reports. Martin did not attend Thursday’s hearing.
PDC compliance staff had 59 complaint-based cases under review or formal investigation as of July 19.
Between May 16 and July 19, 75 cases were resolved. Of those, 66 were candidates and were part of group enforcement, a process initiated by PDC staff in which groups of people who failed to file the same report are handled together.
Of those 66 cases, 23 were closed administratively, 24 were closed with a statement of understanding, 18 violations were found in brief enforcement hearings and one violation was found in a full hearing.
Of the remaining nine closed cases, one was dismissed with no violation, one resulted in a reminder, five received formal warnings, one agreed to admit a violation and pay a small penalty, and one was found in violation in a brief enforcement hearing.