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Dues and Don’ts – WEA Pays $1.7 Million in State’s Biggest Campaign-Violation Case

Final Settlement Ends 14-Year Legal Battle - Reached U.S. Supreme Court

 



 OLYMPIA, May 3.—Fourteen years after it started, the longest-running campaign-finance battle in the history of the state has finally been resolved, and the final tab for the Washington Education Association is a whopping $1.7 million in legal penalties and refunds – the biggest payout ever for a violation of campaign laws.

The case may not have much long-term effect – the Legislature took care of that. But it showed that sometimes a political organization needs to be careful about the rules – people are watching. And it did force the WEA to spend a boatload of money.

It is a rollicking legal saga that landed in the U.S. Supreme Court, forced one attorney general to prosecute one of her staunchest political allies, and gave another his first moment on the national stage. It established a legal precedent that in some cases unions need to ask workers before spending their money on politics. It also showed that a small conservative think-tank, Olympia’s Evergreen Freedom Foundation, could tie an enormous labor union in knots.

Now it is over. A $225,000 settlement in Davenport v. WEA resolves the last remaining lawsuit associated with the case. It is one of a series of settlements that brings the union’s total tab to a little under $1.7 million – not counting legal fees. All that remains is for a judge to approve the settlement, a formality when both sides agree.

It should be noted that the 82,000-member union isn’t admitting guilt. “For us it’s a matter of settling it and moving on with our mission of education,” explained union spokesman Rich Wood.

And when all the money has been spent, all the legal bills paid and all the refunds made, the biggest irony of the case is this. It can’t happen again. While the case was making its way through the legal maze, state officials and sympathetic Democratic lawmakers essentially rewrote the law in the union’s behalf. So today, most of what got WEA in hot water – it’s legal.

A Test Case for “Paycheck Protection”

When the settlement was announced a month ago, during the final week of a busy legislative session, it got no attention whatever. Not a single newspaper story, not a sentence on the TV news. It was a quiet end to what was once the hottest political story in the state. At one point state regulators declared that WEA had committed the biggest and most blatant set of campaign violations ever. The reams of paper consumed by the case would likely tower higher than the Capitol dome itself.

The story really started in 1992, when voters passed Initiative 134. It was a campaign-finance initiative that aimed to break the power of big-spending organizations like WEA. The measure was the brainchild of then-Sen. Linda Smith, Republican of Hazel Dell, and it was clear which side it favored. The measure limited contributions that could go directly to candidates, taking dead aim at what were then called “the big four.” Those were the four big organizations that spent millions of dollars every election cycle, directly and indirectly, and had the ability to cut a fat check that could swing a tight political race. All played on the Democratic side of the aisle – WEA, the state Labor Council, the Washington Federation of State Employees and the then-state Trial Lawyers’ Association.

Republicans had their big spenders as well, and they still do, but most of their money comes from a broader base of small contributors.

When the measure went to the ballot, labor unions had trouble making the argument that they ought to be allowed to make enormous contributions to political races. They threw up their hands. It passed with an overwhelming 73 percent.

But limiting contributions wasn’t all the initiative did. It tightened rules for campaign disclosure, accounting and fund-raising. And it also provided the first major test of a new idea that was the buzz back then in conservative circles – “paycheck protection.” That was the idea that unions should ask first before spending workers’ fees and dues on politics.

WEA had a problem with that.

Getting Around the Law

Federal law lets unionized public employees opt out of political programs, but unions can make it a cumbersome process. Before I-134, only about 20 percent of WEA members bothered. But when the union started asking permission, 80 percent of the teachers said no.

That meant there wouldn’t be much left in the campaign kitty. The union’s voice would be squelched. So WEA reorganized. It folded its old political action committee and started a new one. The new PAC would take the money from the teachers who “opted in.” Meanwhile, every union member would be required to contribute $12 a year to a new “community outreach program,” which would finance the union’s more indirect political efforts. One union official later testified it was “an internal ploy” to get around the new law.

The new arrangement was galling enough to the union’s critics – but when the community outreach program loaned the PAC $162,255 for the 1994 political races, and then forgave the loan – the manipulation seemed transparent. Explained Bob Williams, who would emerge the union’s biggest foe, “They’re laundering money is a polite way to say it.”

Enter EFF

Williams, a former lawmaker and Republican gubernatorial candidate, had founded the Evergreen Freedom Foundation in 1991 as a conservative think-tank promoting free-market issues. Williams helped write the 1992 initiative. When dissident teachers approached him with their complaints, he began poring through WEA’s public records. Williams’ accounting background helped – he quickly found the loan. In April 1996, his foundation filed a complaint with the state Public Disclosure Commission, the agency charged with enforcing campaign laws.

That forced a decision by PDC – if it didn’t take action, Williams’ foundation could sue on its own.

That fall the PDC launched its own investigation, grilled WEA officers, went over the records – and it found apparent violations that ran even deeper. It found the union had been spending dues money to cover PAC expenses. And the general union treasury – not the PAC – had financed campaigns against school-voucher and charter-school ballot measures. None of it had been reported. All told, it found some $574,000 in what it considered dubious, if not unlawful spending.

The WEA denounced Williams as a tool of a right-wing conspiracy, said any problems must have been a simple misunderstanding, and sued the Public Disclosure Commission for harassment. The PDC urged the state attorney general to prosecute.

  Gregoire Played Role

It was a ticklish decision for Christine Gregoire, now governor and then seen as one of the state Democratic party’s rising stars. On the one hand, WEA support would be important if she wanted to move further. On the other, she had a state agency telling her that WEA’s behavior couldn’t be ignored. Gregoire chose to file suit. She told the press the union’s explanations were “disingenuous at best.”

The union finally settled the case, agreeing to pay $430,000 in 1998, the largest campaign-violation settlement up to that time. It sounded big, but about three-quarters of that was a “refund” to teachers – really a temporary dues reduction. And Williams’ foundation was livid when it learned the details. It had been barred from suing because the state had taken action. And the state’s settlement “clarified” a gray area in the law to WEA’s advantage, allowing the union to pump member dues into the political action committee without asking permission, as long as the union contributions were properly reported. The state’s attorneys said it was because that part of the initiative hadn’t specifically mentioned unions.

So one of the principles of I-134 had been erased.

Non-Member Fees Become Issue

The Evergreen Freedom Foundation didn’t give up. The lawsuits and complaints are too many to relate. Occasionally the foundation would score a flesh wound and the union would have to pay a few thousand dollars – mislaid evidence, reporting violations. Sometimes the union fought back with suits and complaints of its own. Those got a headline or two and then disappeared. And then, in 2000, Williams’ group found a charge that drew blood. What about the non-members?

WEA represents about 3,000 teachers who choose not to join the union. Instead of paying dues, they pay an “agency fee” to cover the cost of representation. WEA required them to notify the union if they didn’t want their fees spent on politics. The initiative said it was supposed to be the other way around – the union was supposed to ask.

The same process played out again – Williams’ group filed a complaint, the PDC found a violation, Gregoire sued. This time the union decided to fight, and it convinced the state Court of Appeals the law was unconstitutional. The state Supreme Court agreed. Judges said the law trampled on the union’s free-speech rights, the union’s rights trumped those of the workers, and asking workers was an unreasonable burden.

By this time six years had passed and there was a new attorney general. Gregoire had been elected governor with WEA support. Now the next move was up to Republican Rob McKenna.

He appealed to the U.S. Supreme Court. The high court agreed to hear the case, and McKenna argued it in January 2007.

Five months later the court issued its ruling. It was a slam-dunk. He won the decision 9-0.

 Sets National Precedent

The decision established that public-employee unions cannot compel non-members to pay for political activity. States can make laws telling unions they have to ask.

But that element of I-134 was essentially erased by state officials as well. A funny thing happened after McKenna argued the case and the questioning from the justices showed which way they were leaning. While the country waited for the ruling, the union took the issue to the state Legislature. Both chambers were controlled by Democrats, many of whom WEA had helped elect.

By the time the Supreme Court handed down its decision, lawmakers had passed a bill that “clarified” the union’s accounting practices. The simplest way to explain it is this: If only five percent of the teachers the union represents are non-members, the union would have to spend at least 95 percent of worker fees on political activities before it had to start asking the non-members for permission to do the same.

That won’t happen – the union maintains that about 75 percent of the fees it collects support collective bargaining. So the non-members will never be asked.

Actually, it gets even more confusing. Under federal law, the non-members still get a packet twice a year that explains they can opt out of the political program.

The upshot is even after the Supreme Court ruling, the process really hadn’t changed.

Union Settles Case

What the ruling really did was to establish that the union had to pay for what had happened in the past, and pay big. In December 2008, McKenna’s office announced a settlement with the union. WEA would pay the state $735,000 to cover legal costs. It also would have to refund $240,000 collected from agency-fee payers while the case was under appeal, from 2003 to 2007.

And what of the most recent settlement? That was a separate case, filed on behalf of former schoolteacher Gary Davenport and a group of fellow teachers in 2001, with support from the Evergreen Freedom Foundation and the National Right to Work Legal Defense Foundation. Davenport v. WEA covered the money collected from nonmember teachers between 2000 and 2003. Under the new settlement, they get that money back, too.

Only Took 14 Years

Looking back on the case last week, McKenna said it established an important legal principle. “Non-union teachers won an important victory before the U.S. Supreme Court in 2007, when the court ruled that ‘no means no’ – and teachers who said ‘no’ to joining the union could not be forced to say ‘no’ again to prevent their required non-agency fees from being spent on politics,” he said. “Now this settlement brings closure to a decade-long fight by teachers seeking to protect their rights.”

WEA says it changed nothing. “We don’t and did not spend nonmembers’ fees on election issues,” said spokesman Wood. “The courts have consistently upheld our members’ right to be involved in the public process. You saw it during the legislative session – we’ll speak up on education issues, we’ll support pro-education candidates, and our efforts will continue.”

And from the Evergreen Freedom Foundation? “I think this is a definite victory on the violations that occurred in the ’90s,” said general counsel Mike Reitz. “The union was held accountable and the constitutionality of the law was upheld by the highest court of the land.”

Hard to say what will happen in the next chapter, he said, though future battles will likely pose the question – should the union retain its protected position under state law?

And maybe the case did bring a change. In conservative circles nationwide, there isn’t much talk about paycheck protection anymore. The Washington case proved it’s a tough idea to make stick.