Sunday, March 23, 2008

2nd Dan Pike PDC Investigation (List of Violations as submitted to PDC)

Todd Donovan
Address redacted to protect privacy

November 15, 2007

Philip Stuzman
Director of Compliance
Washington Public Disclosure Commission
711 Capitol Way #206
Olympia, WA 98504-0908

Mr. Stutzman:

I regret that I must register a complaint against the campaign of Daniel V. Pike, candidate for Mayor of Bellingham in 2007. I am aware that an earlier complaint was filed against Mr. Pike with the PDC in October. I have also filed a separate complaint against Mr. Pike in October with the FEC (for his soliciting and accepting foreign contributions). I file the present complaint as a registered voter in Bellingham, and as supporter of Mr. Pike’s opponent. If it is possible, I hope that this can be treated as a complaint filed by an anonymous citizen.

Here I draw attention to additional violations of Washington State campaign finance disclosure rules that occurred after the October complaint against Mr. Pike was filed with the PDC. I have waited until after the election to bring attention to this matter, because Mr. Pike has publicly (via newspaper interviews and radio) criticized myself and others as issuing ‘smear tactics’ when we have attempted to bring attention to his repeated violations of campaign finance rules.

Beginning on approximately October 24, and continuing through November 2nd, the REALTORS Quality of Life PAC of Olympia, WA began sending direct mail supporting Mr. Pike to Bellingham City Voters.

These Realtor ads appear to be well coordinated with the Pike campaign. They use the exact same graphics; use the candidate’s logo identical to that seen in the candidate’s own ads, and use design, layout and themes identical to candidate’s own mailings. The candidate mailings appeared nearly simultaneously with the REALTOR PAC mailings, so it is difficult to imagine that the REALTOR PAC had time to produce copy cat ads independent of the Pike campaign. The REALTOR PAC mailings also used high-resolution versions of images of Pike that were not available on the candidate’s website. Furthermore, the REALTOR PAC ads did not include any disclaimer (as required if these ads were independent expenditures) stating that the ads were constructed independently of the Pike campaign. Given all of this, I must assume that these REALTOR Quality of Life PAC mailings qualify as in-kind contributions to the Pike campaign. Examples of the three different REALTOR mailings, and one of Pike’s own mailings, are enclosed to illustrate these points.

I estimate that 3 separate REALTOR/Pike mailings were sent to the universe of voters in Bellingham – approximately 16,000 households. Households throughout the city reported receiving three separate REALTOR mailings for Pike. Households with multiple voters reported receiving multiple versions of each piece. With postage and production costs, this may equate to about $.50 cents per piece – or, at least $8,000 per mailing.

There was nothing appearing in the REALTOR’s PDC records, nor Mr. Pike’s PDC records, to disclose anything about how much Mr. Pike was benefiting from these advertisements. As of November 6th (the last day of voting), there were no LMCs disclosing any in-kinds from the REALTOR PACs to Mr. Pike, and the REALTOR PACs PDC records showed no evidence of independent expenditures on behalf of Mr. Pike. I should note that PDC records do show timely disclosure of th REALTOR PAC’s in-kinds and independent expenditures to other local candidates across the state, even to another local candidate in Whatcom County. Mr. Pike is perhaps, conveniently, not listed in their PDC reports. The magnitude of this undisclosed spending may be equal to about 50% of what Mr. Pike actually disclosed as expenditures. This is no trivial matter.

As the timeline filed with this complaint demonstrates, Mr. Pike has a recurring pattern of failing to disclose the full extent of the financial support he was receiving from major development interests. In the context of Bellingham politics, this is understandable. Both mayoral candidates were competing to define themselves as the more authentic slow growth candidate. Pike’s success in doing so was probably assisted by his ability to delay and obscure full disclosure of how much his campaign depended on the financial support of realtors and major local developers who are currently seeking to expand the city’s Urban Growth Boundary. For example, he disclosed only a $700 contribution from a REALTOR PAC. The true level of his support from REALTOR PACs - undisclosed – may exceed $20,000. Voters were never able to know this. As a previous PDC complaint against Mr. Pike likely notes, he delayed (until well after voting began) disclosing that a major fundraiser was funded by the developer seeking to expand the city’s UGA.

I request that the PDC investigate this matter, and to evaluate this matter, and the previous complaint, in the context of the timeline enclosed. I ask that Mr. Pike and/or the REALTORS be required to provide full disclosure of their expenditures, and that Mr. Pike’s campaign and/or the REALTORS be held accountable (with appropriate penalties) for denying the public full access to campaign finance information.

Please contact me if additional discussion is required. Again, if it is possible, I request that this be treated as an anonymous complaint given what happened to the last person to file a PDC complaint against the Pike campaign.

Todd Donovan
E-mail redacted

Partial Timeline:

September 18th. Bellwether/Harborside Bistro Fundraiser.

“Raised about $5K,” Pike in Cascadia Weekly (CW). Pike discloses the dontations in a timely manner, but lists no in-kind nor expenditure for the costs of the event, nor does he list anyone loaning the money for the event, nor donating for the event. The Bellwether’s regular policy is to pre-pay for events.

October 2nd or 3rd: When asked how he could afford a kickoff party at Bellwether, Pike says, “they donated it.”

October 3rd. Second Bellwether Fundraiser:

Pike reports donations in timely manner, but lists no in-kind donation nor expenditures for costs of the event, nor any loans or in-kinds to pay for the event. Bellwether policy is to pre-pay for events.

October 7th: Bellingham Herald (BH) Sunday front page story featuring candidates’ top contributions. Regarding Pike, they report:

“Campaign Contributions: $40,030 as of October 4. electronic filings with the state Public Disclosure Commission.
Top 5 Contributors: American Federal of State, County and Municipal Employees Local No. 114; Edith Pike; Laura Boynton, his wife; Washington Association of Realtors; Jerry Thon, President of Astoria Holdings.”

Had the fundraising events been reported as in kind contributions at the time donations from the events were reported, this published list of top contributors might have included a prominent local developer, (Mishiakov) and Fahri Ugurlu, rather than Jerry Thon and Laura Boynton.

October 15th. PDC reports due for period September 1 through October 9.

Pike files reports to PDC that list no disclosure about expenditures or in-kind donations to cover the costs of either event.

Pike files C4 that lists a total of just $1,147 in in-kind donations from September 1, to October 9th.

October 17th. County Auditor sends ballots to voters

October 18th. Voting begins.

October 19th. Britt complaint is filed with PDC re: Pike’s lack of disclosure.

October 20th. In response to complaint:

Pike states in Bellingham Herald “we haven’t received the bill for it yet” for the September event. Implies event was to be paid for by his campaign after previously stating it was donated. Nothing reported about who paid for the event.

October 24th. Auditor reports that a total of 8,540 ballots have been received.

This is approximately 15% of the ballots that will be voted. 3,823 ballots were received that day (most voted before that day)

October 24th, When asked about two fundraisers in Cascadia Weekly:

Pike states: “One was an in-kind contribution: one wasn’t.” He states his campaign funded the September 18th event, but we didn’t get a bill on that until October 2nd. We checked with the PDC in response to the complaint because my understanding was that we would file upon getting the bill: (Different date of bill reported here than in Bellingham Herald on October 20th

Also states, “ the second event was held in Oct. and I believe that was an in-kind. That was held Oct. 3 at the Bellwether and it was hosted by Steven Brinn and Ted Mishchaikov.” (Prominent local developers).

This is the first public disclosure of who funded the events.

October 26th. In response to complaint, Pike discloses a $2,006 expenditure to PDC.

Listed as expenditure to Harborside Bistro (part of Bellwether owned by Fahri Ugurlu), to cover September 18th event.

I assume that the Harborside Bistro, as a private business, has a right to change their policy and allow Mr. Pike to delay paying for the event. The effect of this allowed Pike to raise $5000 without having to cover the costs of the fundraising event. It also allowed him to spend $2,000 that otherwise would have had to have been used after September 18th if he paid for the event.

The shift from having the event a donation to an expenditure prevented the owner of the business from being listed as one of Pike’s top donors in the October 7th Bellingham Herald front page story. After finally receiving the $2006 payment from Pike for the event, Fahri Ugurlu quickly contributed $2000 to Pike (see October 30th below). This disclosed October 30th, nearly 6 weeks after the September 18th event hosted at Mr. Ugurlu’s establishment. Functionally, is this equal to a $2000 loan being made to Mr. Pike in mid-September, and then being forgiven in late October?

October 26th: In response to complaint, Pike discloses $3200 of in-kind donations to PDC.

Donations are listed as being for “food and beverages at fundraiser” held on October 3rd. The cost of this part of the event is divided across eight individual donors.

The effect of this violation allowed Pike – for ten days when votes were being cast – to avoid disclosing that he received an additional $3200 from an event hosted by major land developers. Thousands of votes were cast during this period.

As of November 4th, there is still no reported expenditure or donation to cover the cost of the venue. Moreover, the list of eight individuals paying separate shares for the October 3rd event is inconsistent with Pike’s earlier statement reported in the Cascadia Weekly that the event was hosted by well known local developers Steve Brinn and Ted Mischiakov.

October 26th: In response to complaint, Pike amends C4 filed on October 15th.
Now reports $4347 in-kind received from September 1 to October 9, including in-kind from well known developer.

October 29th: Pike files another amended version of C4 that was due October 15. Same totals as listed on October 26th.

October 24th through October 29th (approximately) First and second of city wide mailings by Realtors PAC on behalf of Pike. Ads use exact graphics, use candidate’s logo identical to that seen in candidate’s own ads, use design and layout identical to candidate’s own mailings. Use high resolution version of image of Pike and a child identical to low-res version of the image on candidate’s own website. No disclaimer (as required if an IE) that the ads were constructed independently of the Pike campaign. Appear to be additional unreported in-kinds which may be valued at $8000 each, ($16,000 total). No LMC disclosing any in-kinds from the Realtor PAC appear in Pike’s PDC records. Realtor PAC expenditure filings with PDC as of November 4th list no expenditure, no IE, and no in-kind identifying the Pike campaign.

October 30th. PDC reports are due.

C3 lists $2000 contribution from Fahri Ugurlu, owner of Harborside Bistro. This is the same person who was recipient of $2006 dollar expenditure on October 26th that covered the cost of the September 18th event.

Schedule B lists outstanding debt to Barron Communications of $8500 for TV ads.

November 1st. Auditor reports 18,737 ballots returned – approximately 34% of ballots that will be voted.

November 1st. Pike discusses e-mail sent by PDC with Bellingham Herald. Bellingham Herald reports in Headline, “Pike Cleared by PDC of Complaint.”

November 1st. Call to PDC spokesperson Lori Anderson and Randy Unruh. Anderson and Unruh say complaint was not dismissed.

November 2nd. Third City wide mailing by Realtor’s Pac for Pike. Ad uses exact same graphics, design and layout as candidate’s own mailings. Uses high resolution version of image identical to low resolution image on candidate’s website. No disclaimer stating it was constructed independently of the Pike campaign. Appears to be an unreported in-kind which may be valued at $8000. No LMC disclosing a last minute in-kind from Realtor PAC. Realtor PAC expenditure filings as of November 4th list no expenditure, no IE, and no in-kind identifying the Pike campaign.

November 2nd. County Auditor reports 20,881 ballots returned as of 9:05 am, approximately 38% of ballots that will be voted.

November 6th. Last day of voting – 100% of ballots voted.

No disclosure of Realtor Quality of Life PAC expenditures on behalf of Pike. No LMC , nothing in the PAC’s C-6s, no in-kinds reported by Pike campaign.

As all votes were cast, Pike reported total contributions of $46,700 and lists total expenditures of $43,950.

The unreported expenditure/in-kind via the Realtors totaled an estimated $24,000. Thus, spending equivalent to 54% of the total expenditures reported by Pike (and on behalf of Pike went unreported.

Note: I had to transcribe this document - as I could not upload it from the PDC site). Any typo errors are mine, not the author's).

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