Democrats seek state probe of Rossi finances

OLYMPIA, Wash. – Washington state Democrats on Monday accused the Republicans' 2004 candidate for governor, Dino Rossi, of using his nonprofit Forward Washington Foundation to finance an ongoing campaign and to pay himself a $75,000 annual salary.

The state Public Disclosure Commission will review the 64-page complaint to see if there were any violations of campaign disclosure laws.

Rossi called it a trumped-up charge that amounts to harassment by Gov. Chris Gregoire and her backers.

Democrats said Rossi is using a foundation to skirt stringent disclosure requirements as he continues a "perpetual" campaign for governor. Rossi heatedly replied that he's not a declared candidate for anything and that the Democrats falsely allege that he's raising and spending money for a 2008 rematch with Gregoire.

In the 2004 election, Gregoire defeated Rossi by 133 votes out of 2.8 million ballots cast, after three vote tallies and a court challenge.

The Democrats said Rossi is a declared candidate for 2008, based on a PDC filing he made in late 2004, and remains so today. That means Rossi should be fully disclosing all of his political contributions and expenses, they said.

Instead he has "deliberately evaded statutory contribution limits and disclosure requirements by funneling financial support to his gubernatorial campaign through a nonprofit entity, the Forward Washington Foundation," the complaint said.

"Although it purports to be a nonpartisan ‘think tank,' Forward Washington is nothing more than Mr. Rossi's unofficial campaign committee," the party told the disclosure agency.

Rossi said he was advised by the PDC in late 2004 that creating an '08 committee was the only way he could continue to collect and spend contributions related to the '04 election. The sole reason was to defray the costs of the court challenge and it was never a declaration of his candidacy for 2008, he said.

"Their whole argument is based on how somehow I am a declared candidate. Well, I'm not," he said. "This is more harassment than anything else."

Rossi collected and spent $326,000 through the 2008 committee, to cover expenses associated with the 2004 campaign, but hasn't spent or received anything since from that source. The Democrats said the committee "morphed" into Forward Washington, his nonprofit, and that he's getting paid $75,000 a year and the executive director $50,000.

The party released the nonprofit's IRS filings, including the foundation's estimate that it would raise $200,000 last year and $375,000 this year and again next year. Donors to the fund are not listed.

"Dino Rossi is paying himself — with cash from special interests he refuses to disclose — to run a sham, tax-free organization to campaign for governor," Democratic state chairman Dwight Pelz said in a statement released with the PDC complaint.

"By using his phony nonprofit to circumvent Washington state's campaign finance laws, Dino Rossi has eliminated all transparency and accountability as he continues his perpetual campaign for governor."

The complaint asks the commission to require reporting of contributions and expenses from the foundation and the return of contributions over the usual campaign limits. Democrats ask that Rossi be barred from using the foundation to "evade legal contribution limits and disclosure requirements," and that penalties be imposed.

Rossi, reached by car phone as he traveled to Yakima for an "Idea Bank" forum sponsored by the foundation, dismissed the accusations as unfounded and outrageous.

"The thing is, I'm a private citizen and I'm not a declared candidate for any race," he said. "Gregoire is clearly scared about something."

He confirmed the salary figure, but questioned how the Democrats dug out his IRS file. Democrats' spokesman Kelly Steele said Democrats simply asked the IRS for the foundation's filing as a nonprofit.

Rossi accused Gregoire of being behind the complaint.

Gregoire's spokesman, Lars Erickson, and the state party said it was strictly the party's work. "There has been no coordination with the party" by the governor, Erickson said.

Vicki Rippie, PDC executive director, said the watchdog agency will "review the complaint and try to determine if the assertions, if true, would constitute violations."

Asked if Rossi is officially, even if only technically, a candidate for governor in 2008, she said, "He has filed a registration form that leads us to believe he is a candidate in '08. He filed reports for a year and a half and now it shows a zero balance."

Rippie said a similar nonprofit group run by Republican gubernatorial candidate Dale Foreman in 1996 was not found to violate disclosure laws.

True campaign activity must be fully disclosed and limits adhered to, but state law still must be interpreted to allow private citizens to run legitimate nonprofit groups, she said.

"We will be examining where those two things intersect," Rippie said in an interview.