OLYMPIA, Aug. 24.—A long-simmering charge that former Democratic Congressman Jay Inslee improperly used federal campaign funds in his race for governor has finally exploded in the form of a formal complaint from his opponent, Republican Rob McKenna.
But take note – this isn’t your ordinary nitpicky campaign-violation complaint. Not only is this one a bit bigger, there’s also going to be action before the November election. The complaint has been filed in a way that will force some sort of decision by mid-October, right when the campaign will be at its peak. And it means that McKenna’s own office of attorney general may have to make a pair of ticklish decisions in an official capacity – whether to refer the complaint to the state Public Disclosure Commission for investigation, and perhaps even whether to prosecute.
The McKenna campaign is alleging that Inslee used his congressional re-election campaign account to pay for polling and opposition research for his Washington state gubernatorial campaign. That’s a line that can’t be crossed. Money collected for federal races can’t be used for state campaigns, except under the strictest conditions. The campaign also alleges that Team Inslee broke the rules for at least some of the $626,330 in federal contributions it has formally transferred from the old campaign account to the new one, and it is seeking a full accounting.
The Inslee campaign filed a complaint of its own with the PDC two weeks ago. That one makes a rather smaller charge against the McKenna campaign – that some expenses were reported about a month late, and some staff costs were improperly allocated to McKenna’s attorney general re-election account shortly before he formally launched his campaign for governor. Said McKenna campaign manager Randy Pepple, “I mean, they’re talking about bookkeeping, we’re talking about money-laundering.”
A Year in the Making
The McKenna campaign has been sounding complaints for more than a year now about the way Inslee has been spending his federal campaign money for the state race, but this is the first time that it has reached the level of a formal complaint. The former congressman had some $1.2 million in the bank when he entered the gubernatorial contest on June 28, 2011. The problem was that he couldn’t just move it all over. Different rules apply to contributions to federal races and those on the state level. For one thing, no contribution to a gubernatorial race can be more than $3,600 — $1,800 for the primary and $1,800 for the general election. So when money is transferred, every dollar must be allocated to a contributor, and individual contributors must be contacted and give their permission. Where contributions from political action committees are concerned, there has to be a connection with the state of Washington – at least 10 contributors must reside here. Since last July, the McKenna campaign has been arguing that the opposition needs to provide a full accounting, but the Inslee camp has been reporting transfers as a lump sum.
So why is this hitting now? There’s a little-known passage in state law that allows the public to go in and inspect campaign books during the eight days prior to an election. Just before the primary, the McKenna campaign paid a visit to Team Inslee and asked to see the permission slips. Pepple says the opposition balked. But his team did get a few names for people whose money was transferred. At least eight of them had made their contributions in 2009. Under federal first-in, first-out accounting procedures, their money was considered spent in Inslee’s 2010 campaign. No transfer can be made. Reason enough for a full accounting, Pepple says – and the PDC has the ability to compel the Inslee campaign to produce the full records.
There’s more. In January 2011, six months before Inslee entered the gubernatorial race, the Inslee congressional campaign spent $25,570 for “research consulting” with the Feldman Group, a D.C. polling firm. In March it spent another $12,301. That’s about the cost of a statewide poll, the complaint argues. And it doesn’t make sense that Inslee would be polling in his congressional district, because the boundaries of Inslee’s 1st Congressional District were certain to be changed in redistricting – as they eventually did. The congressional campaign also paid $34,609 to New Partners Consulting in April 2011, an “opposition research” firm that has been peppering the attorney general’s office with public records requests since 2009, some of it apparently financed by the state Democratic party. Because Inslee had no congressional opponent, the complaint says the spending from the congressional account makes no sense, “unless it was in furtherance of a campaign for governor.”
A Tricky Process
What makes this complaint unusual is that it is filed as a “citizen action,” rather than as a routine complaint to the Public Disclosure Commission. Complaints to the PDC sometimes can take more than a year to resolve. But citizen action complaints are different. They are filed with the state attorney general’s office and the local prosecuting attorney, in this case King County, and they set a 45-day deadline for a decision whether to prosecute. A 10-day extension is possible. If the decision is a no-go, the McKenna campaign could file suit on its own and collect legal fees from the state if it wins. Whatever happens, decision-time will fall smack-dab in the middle of the campaign.
The presumption is that one office or the other will refer the matter to the Public Disclosure Commission for investigation and that the inquiry will take place in a timely fashion, said McKenna spokesman Charles McCray. He said the complaint was filed that way to prevent allegedly illegal federal contributions from being used in the campaign. The attorney general’s office says it hasn’t received the letter yet and hasn’t decided how it will be handled.
It raises a tricky question, says PDC spokeswoman Lori Anderson. “I think it is problematic that the person who has filed the citizen action is the recipient of the action, but it is not our problem. It can bring up some appearance questions, but they are not questions that we would have to answer.”
And the Inslee campaign is making hay of that fact. In a statement, Inslee spokeswoman Jaime Smith called the action “baseless” and asserted PDC officials are questioning whether McKenna “might be misusing his office.”