Candidates will be forced to reveal donors of money shifted to new campaigns

The state’s campaign finance watchdog on Thursday called for ending the practice of allowing candidates to shift surplus money from prior races into new campaigns without disclosing the source of those dollars.

A unanimous Public Disclosure Commission issued new guidance requiring candidates to identify the donors and treat their contributions as if they are for the candidate’s new campaign, making them subject to disclosure and contribution limits for the race.

Commissioners embraced a request of open government advocates who argued voters cannot learn fully about a candidate’s funding because current rules allow lump-sum transfers of surplus funds, hiding donors and amounts.

“I think there is a general sense that transparency wins” with updated guidance, said commission chair Fred Jarrett, a former state lawmaker.

Thursday’s decision applies to the surplus funds of all candidates. But it could most immediately impact Democratic Attorney General Bob Ferguson who had shifted roughly one-third of a $3.8 million surplus account into his gubernatorial campaign ahead of the commission vote.

“We have been carefully following the PDC’s clear and unequivocal guidance,” Ferguson said in a statement. “We respect the PDC’s decision today to change that guidance, and look forward to following the new rules going forward.”

Commissioner of Public Lands Hilary Franz, a Democrat who formally launched her bid for governor Wednesday, backed greater disclosure. She has just $26,568 in surplus dough.

“I support the commissioners’ ruling to uphold our campaign finance laws and fully apply them to this campaign cycle,” she said in a statement. “I made the choice to not transfer surplus funds until the PDC fixed this discrepancy, and I will follow the new guidance immediately.”

Whether the commission action covers recent transfers by Ferguson – which total roughly $1.2 million – wasn’t immediately clear.

His campaign spokesperson said it doesn’t. A PDC spokesperson said commissioners will decide.

“The application of the Commission’s interpretation to activity that occurred prior to today is ultimately for the Commission to determine based on the facts of the situation,” PDC spokesperson Kim Bradford wrote in an email.

Commissioners are expected to formally approve the new guidance at their next meeting. At that point, they could be asked to apply the rules retroactively.

Of donors and dollars

This issue, first reported in The Seattle Times, stems from a request from Tallman Trask, a Seattle attorney with a history of progressive activism, for clarification on the rules governing surplus accounts.

The way it has long worked is candidates, at the end of a campaign, may shift unspent funds into a surplus account presumably for use in their next political endeavor. PDC rules have permitted candidates to move the money, with donor permission, in a lump sum to a race be it for re-election or for a different office.

Because the practice didn’t require identifying the source of the funds, candidates could solicit the same donors for additional dollars.

Trask, in testimony to the commission Thursday, likened it to a shell game that made it possible for candidates to “sidestep contribution limits.”

He urged commissioners to act because, in the last two weeks, the “landscape around this issue has already changed.” In that period Ferguson made his transfers. And Democratic Sen. Manka Dhingra, transferred $74,000 to her recently announced campaign for attorney general.