The Freedom Foundation filed a lawsuit yesterday against the Washington Public Disclosure Commission (PDC) in Thurston County Superior Court for mishandling a campaign finance complaint against the Service Employees International Union’s Political Education and Action Fund (SEIU PEAF).

In recent years, the Washington State Legislature has given the PDC unprecedented control over the administration and enforcement of Washington’s campaign finance laws. Unfortunately, the lawsuit and underlying complaint suggest the price of the PDC’s consolidation of power may turn out to be less consistency and greater subjectivity in the enforcement of state election rules.

The lawsuit stems from a complaint the Freedom Foundation filed with the PDC in February 2019 documenting how SEIU PEAF — one of the two political committees operated by the national SEIU headquarters in Washington, D.C. — consistently violated the state’s Fair Campaign Practices Act (FCPA) throughout 2018.

Specifically, the complaint documented that:

• SEIU PEAF failed to disclose receiving three contributions in 2018 totaling $2.8 million;
• three of the five forms C5 SEIU PEAF filed with the PDC as an out-of-state political committee in 2018 were submitted late; and,
• each of the forms submitted by SEIU PEAF contained various other discrepancies and inaccuracies.

In its response to the PDC, SEIU PEAF admitted most of the violations but described them as “trivial” and “inadvertent” and urged the PDC “to dismiss the Freedom Foundation’s complaint as not justifying the imposition of any penalty.”

However, as the Freedom Foundation explained to the PDC in a supplemental filing, SEIU PEAF has been involved in litigation with the Freedom Foundation since early 2018 over FCPA violations it committed in 2016-17. As a result of the litigation (which is ongoing), the PDC also previously issued a warning letter to SEIU PEAF regarding the importance of complying with the law.

Despite such warnings, SEIU PEAF continued to violate the FCPA throughout 2018 and made no effort to correct its previous reporting deficiencies until, of course, after the Freedom Foundation filed its complaint. As part of one of the largest labor unions in the nation, SEIU PEAF had ample resources and professional expertise to comply with Washington laws.

Nevertheless, on May 7, the PDC resolved the complaint by simply issuing yet another warning to SEIU PEAF, despite acknowledging it committed “significant” violations of the FCPA.

In a May 15 letter to the PDC, the Freedom Foundation documented the numerous factual and legal flaws in the PDC’s resolution of the complaint. For instance, the PDC under-calculated by nearly half the amount of contributions SEIU PEAF failed to disclose, stating the amount not disclosed was merely $1.5 million instead of $2.8 million.

Most importantly, though, state law does not give the PDC the ability to resolve a complaint involving “significant” violations of this type with merely a warning letter.

RCW 42.17A.755(1) states that, when a complaint is filed, the PDC “must” either: (1) dismiss it or otherwise resolve it as a remedial or technical violation; (2) initiate an investigation, conduct hearings and take enforcement action; or, (3) refer the complaint to the attorney general.

But the PDC took none of these actions.

• The PDC did not “dismiss the complaint” and would have violated its own regulations had it done so. PDC regulations only permit it to dismiss a complaint if it is “unfounded or frivolous.” In this case, SEIU PEAF admitted its violations and the PDC itself described them as “significant.”
• It did not resolve the complaint as pertaining to remedial violations or technical corrections. As the Freedom Foundation explained to the PDC, there is no disputing that SEIU PEAF’s violations in this case simply do not meet the statutory definitions of “remedial violation” or “technical correction.”
• The PDC did not proceed with an investigation, conduct hearings and issue an enforcement order.
• Nor did the PDC refer the complaint to the Attorney General.

When pressed, the PDC cited one of its own regulations, WAC 390-37-060(1)(d), as authority for resolving the complaint with a warning letter (the PDC’s original resolution notice had mistakenly referenced a different regulation). The regulation says the PDC can “resolve any complaint that alleges minor violations of chapter 42.17A by issuing a formal written warning.”

However, the FCPA currently recognizes only three types of violations: (1) actual violations; (2) remediable violations; and, (3) technical corrections. “Remediable violation” and “technical correction” are specifically defined while “actual violation” is defined as any violation that is not remediable or technical.

“Minor violations” are purely a creation of PDC regulations and are defined as a lesser kind of “actual violation.” But these regulations were adopted before the Legislature revised the FCPA to require the PDC to process complaints by taking one of the actions listed in RCW 42.17A.755(1). Accordingly, the regulation is now out of date and superseded by subsequent state law.

And, as the Freedom Foundation explained to the PDC, even if the regulation was still valid, SEIU PEAF’s violations in this case would not qualify as “minor violations.”

The Freedom Foundation’s lawsuit alleges the PDC acted outside its legal authority by resolving the Freedom Foundation’s complaint with merely a written warning to SEIU PEAF instead of taking one of the actions required by the law is the subject of the litigation.

The case is one of the first of its kind since the Legislature overhauled state campaign finance law enforcement in recent years.

Since the overwhelming passage of Initiative 276 in 1972, citizens have had the right to file litigation against those who violate the FCPA if state authorities like the PDC refuse to take enforcement action.

However, after a sharp uptick in campaign finance complaints and litigation, the Legislature passed HB 2938 in 2018 and HB 1195 in 2019. Both bills were officially requested and supported by the PDC. Taken together, the bills significantly diminished the ability of citizens and the attorney general to enforce the FCPA, consolidating that power primarily in the hands of the PDC.

Given the increasingly singular role the PDC plays in interpreting and applying Washington’s campaign finance laws, it is more important than ever — to preserve both the rule of law and the PDC’s standing as an institution — that the PDC’s decision-making be firmly grounded in fact and law.

Hopefully the PDC’s handling of the complaint against SEIU PEAF turns out to be a correctable exception and not the rule going forward.