Article by Erik Smith. Published on Monday, December 06, 2010 EST.
Judge Decides Case Had No Merit – Now BIAW Will Sue for Legal Fees – and Who Paid Activist Attorney’s Bills, Anyway?
Remember this scene from the 2008 gubernatorial campaign? Days before the election, Republican Dino Rossi was forced to face the TV cameras and defend himself from accusations that he “colluded” with the Building Industry Association of Washington. Rossi and BIAW were exonerated once and for all last week, and no one noticed. (Seattle Post-Intelligencer photo)
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Dec. 6.—One of the most twisted political campaign strategies ever employed in Washington state reached the end of the line last week. A judge finally threw out a lawsuit that aimed to break the state’s politically active homebuilders’ group, and which did major damage to Republican Dino Rossi during his 2008 campaign for governor.
Filed by prominent progressive attorney Knoll Lowney, the suit alleged that Rossi illegally coordinated his fund-raising strategy with the Building Industry Association of Washington, which was running an independent campaign in his favor.
Turns out there was nothing to it. But the lawsuit left plenty of carnage. It dragged Rossi into court days before the 2008 election for oodles of damaging publicity. It hamstrung the political-campaign efforts of the state’s biggest-spending Republican interest group, and it besmirched the reputation of every candidate who took money from BIAW. Now that seems to have been the only point. The ruling by King County Superior Court Judge Mike Heavey appeared to underscore BIAW’s argument that the suit was part of a political vendetta and an abuse of the court system.
At a hearing last Wednesday, Heavey ruled that the suit had no merit. He dismissed it “with prejudice” and allowed BIAW to seek reimbursement of the immense legal bills it has racked up over the years.
Unless Lowney and his clients choose to appeal, the decision disposes of the last of several legal assaults that aimed to squelch BIAW’s hard-hitting political campaign efforts on the right.
And the craziest thing about the case is that to this day no one knows who paid Lowney to do it.
Hoped to Taint BIAW
There was a telling point about last week’s dismissal. Previous court skirmishes had been stage-managed for maximum publicity by the activist group FUSE Washington. Two years ago it even sent out press releases that notified television cameramen where to position themselves for shots of Rossi on his way to face the lawyers. But this time no one bothered to notify the press. And so the final play of the game, which offered about as complete an exoneration as a court can provide, played to an empty courtroom.
It is a complicated tale with a simple explanation. For years BIAW has been one of the most prominent players in state politics, spending millions of dollars on independent campaigns for Republican candidates and right-leaning ballot measures. It fills the same role that other organizations do on the left – like the Washington State Labor Council, the Washington Federation of State Employees, the Washington Education Association, the Service Employees International Union and the state’s regional trial-lawyer associations.
But in the political world few people see things in an even-handed way. BIAW’s big spending and often-blistering attack ads have made it plenty of enemies on the left and in Democratic-party circles. Lowney did not return a phone call for this story, but he explained his goal in an interview with the Seattle Times two years ago. He said he wanted to taint BIAW to the point that candidates “will be returning their money.”
Declared War in 2007
That wasn’t his only target. One reason the attack on BIAW was such a high priority was that it was the single biggest backer of Dino Rossi in his 2004 campaign for governor. Rossi came within a hairsbreadth of beating Democrat Christine Gregoire, just 133 votes, after a bruising recount battle that leaves hard feelings even today. A couple of years ago it seemed an open secret that Rossi would run again – once more with BIAW support, unless Lowney could stop it.
Lowney, who has made a career of political lawsuits for left-wing causes, launched his campaign against BIAW a full year before the election. His initial lawsuit claimed that BIAW had improperly spent members’ money on its political program, and he sought “emergency” relief that would have prevented the association from spending money on politics in 2008.
A Curious Claim
It was a claim that couldn’t pass the straight-face test. Lowney accused BIAW of “skimming” interest from the state worker-compensation refund program that it manages. He filed the suit on behalf of five green-minded contractors who voluntarily joined a Whatcom County affiliate and who must have been absolutely shocked to learn that BIAW’s profits paid for the best publicized independent political program in the state. They objected, of course. The total amount they had at stake in the case was $350. Lowney sought $98 million in damages, enough to put BIAW out of business.
Apparently Lowney didn’t have the goods when he filed the suit. Even after massive discovery demands that forced BIAW and its local affiliates to turn over 70,000 records, and after an accounting effort that Lowney claimed at one point had cost $3 million, he still couldn’t prove his case. A Thurston County judge ruled this year that there had been minor bookkeeping problems, but no wrongdoing was involved. She refused to award damages.
Kernel of Truth
Lowney’s fishing expedition turned up something else, though. When Rossi finally declared he was running in 2008, Lowney had documents that showed the builders had been raising money for a possible independent campaign a year earlier. That’s a violation of campaign-finance rules – fund-raising activity is supposed to be reported quickly and money is supposed to go into clearly-marked accounts.
Lowney found two former Supreme Court justices to act as clients – Faith Ireland and Bob Utter, both of whom were Gregoire contributors. And he filed a complaint against BIAW with the state’s campaign-watchdog agency, the Public Disclosure Commission. That complaint led to a lawsuit from the attorney general’s office. It was settled two months ago when BIAW agreed to pay $242,000. BIAW officials say Lowney was throwing charges against the wall to see if something would stick. This one did.
Rossi Does the ‘Perp Walk’
The thing is, Lowney didn’t stop there. Again with Ireland and Utter as clients, he filed a lawsuit against BIAW in 2008 alleging that it had mapped out campaign strategy with Rossi. That was the case Heavey dismissed Wednesday.
If the charge had been true, BIAW would have been blocked from running an independent campaign. It would have been limited to spending $2,400 rather than the $7 million it dumped into its 2008 effort. Financial penalties would have been enormous. Just as important, it would have blackened Rossi as a scoundrel.
As it turned out, Lowney couldn’t prove his charge, but he probably succeeded on the other point. All he had were documents indicating that Rossi had spoken with builders’ groups in 2007, right about the time they were raising money. Rossi said he was just encouraging the builders to fight for Republicans and not make nice with the governor — a plausible story — and there was nothing to prove him wrong.
But the charge produced a media frenzy. In the month before the 2008 election, dozens of newspaper articles and TV stories reported that Rossi had been “linked” to illegal campaign activity. Rossi was forced to defend himself at news conferences. Lowney petitioned the court for an “emergency” deposition in the days prior to the election, and Rossi ran a gauntlet of reporters on the way inside.
The transcript shows that Lowney didn’t have much to ask. He wanted to know what Rossi had told the builders, and whether Rossi thought campaign rules were important. But the damage was done. It’s hard to know how many votes the spectacle cost Rossi – 2008 wasn’t a good year for Republicans. But he lost with 47 percent of the vote.
‘A Sleazy Game’
Lowney never bothered filing an emergency motion back in 2008 – which made it rather clear that embarrassment for Rossi and BIAW was the point. Yet if everything had gone according to plan, Lowney might have hauled Rossi into court again before this year’s election, just as Rossi was mounting a third statewide campaign against Democrat Patty Murray for U.S. Senate. Lowney seemed to rediscover the case last August, suddenly issuing subpoenas to Rossi for musty campaign documents from 2004 and 2008. The new round never had a chance to play out, because Heavey postponed hearings until after the election.
In the meantime, all the charges raised by the suit had been independently investigated by the Public Disclosure Commission and dismissed. No evidence, it decided. Rossi told the Olympian, “It’s a sleazy game they play.”
In dismissing the suit last week, Heavey ruled there was “no genuine issue of material fact in dispute.”
Someone’s Gonna Pay
Some political observers think there is a parallel between the BIAW saga and another big-ticket political fund-raising prosecution in this state – a case of tit for tat. The Washington Education Association was hauled into court 14 years ago by the Evergreen Freedom Foundation, on charges regarding with the way it spent members’ dues on politics. It wasn’t until this year that the final lawsuit was settled. But there was a big difference. That case reached the U.S. Supreme Court, where WEA lost, and ultimately the union paid out a record $1.7 million in settlements. So there was a little more to that one. And no candidates were pilloried in the process.
Heavey’s ruling ends three years of harassment that aimed mainly to tie BIAW down and shut it up, said Tom McCabe, the association’s executive vice president. That’s presuming Lowney doesn’t appeal or file another lawsuit.
“Given Lowney’s bizarre penchant for claiming victory when his lawsuits against BIAW are rejected, I can’t wait to read his spin of this bruising and incontrovertible defeat,” he said.
And you can bet BIAW is going to be going after attorney fees, he said. The association isn’t saying how much it spent just yet – its attorneys are preparing the motion. But it was definitely big.
Because Lowney technically was representing Ireland and Utter, they’re the ones on the hook, not him.
McCabe said, “It is a shame and an outrage that the courts can be exploited for what are clearly political purposes, forcing victims like BIAW to spend an inordinate amount of time, energy and resources defending themselves against meritless accusations because we had the nerve to participate in the political process.”
Who Paid Lowney?
There’s one last question about the affair. If you read the full three years’ worth of newspaper clippings about the case in one sitting, you’ll see there’s a question no reporter thought to ask at the time, or at least thought was worth mentioning in a story. Who was paying Lowney’s legal bills? Were his clients paying? Did he take it on himself?
Or did the money come from a competing political organization that stood to gain if BIAW fell?
The closest Lowney came to addressing the question was a heated exchange during the Rossi deposition, in which he denied that he was being paid by the Gregoire campaign, and threatened to sue anyone who said so.
Because Lowney didn’t call back, Washington State Wire didn’t get a chance to ask.
Said BIAW spokeswoman Erin Shannon, “Maybe he didn’t call you back because he couldn’t find a way to declare victory.”
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