Realtors PAC fails to report $56,650 in contributions to Crawford, Pike and Farr

This Report was pulled from the PDC website on May 21, 2008. It is my understanding that the hearing will be rescheduled later in the summer.

The two in-kind contributions to Crawford and Pike totaled $31,913, and exceeded the maximum contributions allowed by RCW 42.17.105(8) within 21 days of the 2007 general election by $21,913.

Here's where it gets interesting --- On October 16, 2007, the Realtors Quality of Life PAC notified the Crawford campaign that they had made an in-kind contribution totaling $12,875. On or after October 16, 2007, RQL PAC notified the Pike campaign that they had made an in-kind contribution totaling $19,038. Farr reported the in-kind contribution, as required by law, Pike alleges that his campaign contacted the PDC and was told he did not have to report the in-kind contribution ---

PDC Report to Commission with Recommendation to report the following apparent violations of the Realtor's Quality of Life PAC to the Attorney General

STATE OF WASHINGTON

PUBLIC DISCLOSURE COMMISSION
711 Capitol Way Rm. 206, PO Box 40908 • Olympia, Washington 98504-0908 • (360) 753-1111 • FAX (360) 753-1112 Toll Free 1-877-601-2828 • E-mail: pdc@pdc.wa.gov • Website: www.pdc.wa.gov

TO: Members, Public Disclosure Commission

FROM: Philip E. Stutzman, Director of Compliance

DATE: May 15, 2008

SUBJECT: Report to Commission with Recommendation
Complaint filed against Realtors Quality of Life PAC (PDC Case No. 08-103)
Complaint filed against Dan Pike (PDC Case No. 08-102)

On November 16, 2007, Commission staff received a complaint from Todd Donovan alleging that during the week before the 2007 General election, the Realtors Quality of Life PAC (RQL PAC) distributed three direct mail pieces supporting Dan Pike, a candidate for Mayor of Bellingham, and that the expenditures had not been reported by RQL PAC or by Mr. Pike’s campaign. Mr. Donovan alleged that the RQL PAC mailings appeared to have been coordinated with the Pike campaign, and were unreported in-kind contributions. Although not addressed in Mr. Donovan’s complaint, PDC staff also reviewed whether the Realtors Quality of Life PAC properly reported expenditures it made that supported Sam Crawford, an incumbent candidate for Whatcom County Council, and Larry Farr, a candidate for Bellingham City Council.

The investigation showed that the Realtors Quality of Life PAC (a political committee of the Washington Association of Realtors) violated RCW 42.17 on multiple occasions. The investigation also showed that Dan Pike did not violate RCW 42.17 in a manner that would warrant enforcement action. Following is a summary of staff’s investigation and the justification for the staff recommendations.

Background
1. The 2007 General Election was held on November 6, 2007. Within 21 days of a general election, persons (including associations, entities, and political committees) are prohibited from making contributions in the aggregate exceeding $5,000 to any candidate or political committee (RCW 42.17.105[8]). Beginning October 16, 2007, contributions to local office candidates, unless made by a state party committee, were limited to $5,000 in the aggregate.
2. Within 21 days of an election, the sponsor of political advertising who publishes, mails, or otherwise presents to the public political advertising supporting or opposing a candidate or Report to Commission With Recommendation Realtors Quality of Life
ballot proposition that qualifies as an independent expenditure with a fair market value of $1,000 or more is required to file a special report with the Commission (PDC form C-6) within 24 hours of the date the advertising is first published, mailed, or otherwise presented to the public (RCW 42.17.103).
3. The Washington Association of Realtors (Washington Realtors or Realtors) is located in Olympia, Washington and controls the Realtors Quality of Life PAC. Bryan Wahl is Government Affairs Director and Kate Whiting is Political Affairs Director for the Washington Realtors. Together, they managed the campaign expenditure projects sponsored by RQL PAC during the 2007 election. Perry Eskridge is the Government Affairs Director for the local Whatcom County Association of Realtors. He worked with Ms. Whiting to coordinate the production and distribution of the mailers that supported candidates Crawford, Pike and Farr.
4. During the 2007 General Election, the Realtors Quality of Life PAC spent $56,650 supporting candidates Crawford, Pike and Farr. The Realtors and RQL PAC provided support in the form of public endorsements, monetary contributions, and political advertising (mailers and a TV ad).

Investigation
Realtors Quality of Life PAC fails to itemize in-kind contribution expenditures totaling $46,650, benefitting three candidates, on the Schedule A to the C-4 Report (RCW 42.17.090 and WAC 390-16-037)

5. RQL PAC spent $46,650 on seven direct mail political advertising pieces supporting Crawford, Pike, and Farr. The support was an in-kind contribution to each candidate - $12,874 for Crawford, $19,038 for Pike, and $14,738 for Farr. The mailers were delivered to voters during the week of October 29 to November 2, 2007. Mr. Wahl and Ms. Whiting of the Realtors and the Realtors Quality of Life PAC, and Chad Minnick of Minnick & Minnick Consulting, all agreed that the expenditures were in-kind contributions to the candidates supported.
6. RQL PAC timely filed its 7-day pre-general election C-4 report on October 30, 2007, but did not identify, on the Schedule A to the C-4 report, the candidates supported by the political advertising. In addition, the filing did not provide the required itemization of costs attributable to each mailer as required by RCW 42.17.090 and WAC 390-16-037. RQL PAC amended its C-4 and Schedule A to provide the required itemization of expenditures 156 days late on April 3, 2008, well after the 2007 general election.

Realtors Quality of Life PAC makes contributions in excess of $5,000 to two candidates within 21 Days of 2007 General Election (RCW 42.17.105[8])
7. The last day for making unlimited contributions to local candidates for the 2007 General election was October 15, 2007. Beginning on October 16, monetary and in-kind contributions were limited to $5,000 in the aggregate for each candidate.
Report to Commission With Recommendation Realtors Quality of Life PAC, Case No. 08-103 & Dan Pike, Case No. 08-102
8. On October 15, 2007, the Realtors Quality of Life PAC began the process of notifying candidates Crawford, Pike and Farr of in-kind contributions totaling $46,650. On October 15, 2007, RQL PAC notified the Larry Farr campaign that they had made an in-kind contribution totaling $14,737 to the Farr campaign.
9. On October 16, 2007, the Realtors Quality of Life PAC notified the Crawford campaign that they had made an in-kind contribution totaling $12,875. On or after October 16, 2007, RQL PAC notified the Pike campaign that they had made an in-kind contribution totaling $19,038. Because RQL PAC did not notify candidates Crawford and Pike of the in-kind contributions until after October 15, 2007, the maximum allowable contribution to each candidate was $5,000. The two in-kind contributions to Crawford and Pike totaled $31,913, and exceeded the maximum contributions allowed by RCW 42.17.105(8) within 21 days of the 2007 general election by $21,913.
10. Shortly after October 16, 2007, the Washington Realtors and RQL PAC became aware that they had not timely notified candidates Crawford and Pike. Distribution of the mailers did not start until October 29 and was completed by November 2, 2007. However, the Realtors Quality of Life PAC did not cancel or reduce the size of the mailings to ensure that the value of the in-kind contributions to Crawford and Pike would be limited to $5,000 to each candidate.

Realtors Quality of Life PAC fails to file a C-6 Report of Independent Expenditures that supported a candidate for Whatcom County Council (RCW 42.17.103)
11. The Realtors Quality of Life PAC spent $10,000 for an independent expenditure television advertisement supporting Sam Crawford. RQL PAC first presented the TV ad to the public on October 31, 2007. RQL PAC timely reported the ad on its 7-day pre-general election C-4 report. However, the Schedule A to the C-4 report did not adequately describe the purpose of the committee’s expenditure. RQL PAC did not file the required special report (PDC form C-6) within 24 hours of presenting the advertising to the public as required by RCW 42.17.103. RQL PAC filed the C-6 report 154 days late on April 3, 2008, well after the 2007 general election.
Alleged failure of Dan Pike to report receipt of in-kind contribution from Realtors Quality of Life PAC (RCW 42.17.080 and .090)
12. Dan Pike did not report receiving an in-kind contribution from the Realtors Quality of Life PAC in the amount of $19,038. The Pike campaign said they believed the mailing to be an independent expenditure made by RQL PAC, and not an in-kind contribution.
13. During the campaign, Mr. Eskridge contacted Mr. Pike’s campaign manager and requested digital images. The campaign manager provided the images, and when additional, high resolution images were requested, the campaign manager delegated the duty to a campaign volunteer who provided the images to Mr. Eskridge. On or shortly after October 16, 2007, at the request of Ms. Whiting, Mr. Eskridge gave the Pike campaign copies of invoices from the consultant used by RQL PAC for the mailers, to enable the Pike campaign to report the cost of the mailings as an in-kind contribution.
14. The Pike campaign was unsure of the purpose of the invoices or how to report the
information, so Mr. Pike’s campaign manager contacted PDC staff. Based on the campaign manager’s description of the campaign’s contact with the Realtors and the consultant, PDC staff told the Pike campaign that the expenditure appeared to be an independent expenditure and might not be reportable by the Pike campaign. Based on this discussion with PDC staff, the Pike campaign did not report the expenditures as an in-kind contribution.
15. Mr. Pike stated that he did not personally provide information or have contact with anyone from the Realtors (at the local or state level) or with either of the vendors regarding the mailings sponsored by RQL PAC in support of his campaign. He stated that his campaign manager informed him that the Realtors had requested photos, as had many of his other supporters. He said that by itself, the Realtors’ request did not give him any information about the Realtors’ plan to support his campaign.
16. Mr. Pike and his campaign manager stated that the Realtor-sponsored mailers had no impact on the campaign’s mail plan. The campaign manager stated that the campaign’s advertising plan was already being executed when they learned that the Realtors were conducting mailings in support of the campaign.

Staff Recommendation
Realtors Quality of Life PAC (PDC Case No. 08-103) - Staff recommends that in accordance with RCW 42.17.360(5) and 42.17.395, the Commission report the following apparent violations of the Realtors Quality of Life PAC to the Attorney General’s Office:
􀂃 RCW 42.17.090 and WAC 390-16-037 – By failing to itemize in-kind contribution
expenditures totaling $46,650, benefitting Sam Crawford, Dan Pike, and Larry Farr, on the Schedule A to the 7-day pre-general election C-4 report.
􀂃 RCW 42.17.105(8) - By making in-kind contributions in excess of $5,000 to Sam
Crawford and Dan Pike within 21 days of the 2007 general election. The in-kind
contributions were $21,913 over the allowable limit.
􀂃 RCW 42.17.103 – By failing to timely file a C-6 report of independent expenditures for $10,000 that supported Sam Crawford, a candidate for Whatcom County Council.
Referral is appropriate because the remedies the Commission could impose statutorily are insufficient given the significance of the apparent violations.
Dan Pike (PDC Case No. 08-102) – Staff recommends that the Commission dismiss the allegations against Dan Pike. Dismissal is appropriate because the Pike campaign attempted to avoid coordinating its activities with the Realtors and RQL PAC and believed the expenditures to be independent expenditures. In addition, the Pike campaign did not report receipt of an in-kind contribution for the mailings based on advice it received from PDC staff.

Report of Investigation: http://www.pdc.wa.gov/archive/commissionmeetings/meetingshearings/pdfs/2008/08102.ROI.pdf
Report to Commission: http://www.pdc.wa.gov/archive/commissionmeetings/meetingshearings/pdfs/2008/08102.ROI.pdf