PDC clears Dino Rossi of campaign charges

OLYMPIA — The state Public Disclosure Commission (PDC) on Thursday cleared Republican Dino Rossi of allegations he illegally coordinated with a powerful homebuilder group to raise money for his 2008 gubernatorial campaign.

By a 3-1 vote, the commission agreed that the state should pursue no further action against Rossi and the Building Industry Association of Washington (BIAW), a statewide trade group that has bankrolled Republican candidates and conservative causes.

The politically charged investigation involved more than $600,000 in contributions from 11 local builder groups to BIAW political committees in 2007. The money was raised in anticipation of Rossi becoming a candidate, but before he officially declared that October.

Democrats argued Rossi was coordinating with BIAW to raise money in preparation for his campaign. But the PDC found no evidence that Rossi solicited the contributions, which helped financed an independent campaign promoting his candidacy.

Rossi — who is now weighing a challenge to U.S. Democratic Sen. Patty Murray — said the ruling proves the accusations against him were just political smears.

"This is the pattern, the Democrat strategy: Hold people in court, cloud them and make them look like bad people," he said.

Tom McCabe, the BIAW's executive vice president, said he was relieved by the PDC decision and called the more than yearlong probe "a lot of to-do about nothing."

The PDC's decision won't end the political grudge match between Democrats and the BIAW.

Knoll Lowney, the Seattle attorney who filed the PDC complaint, said his two separate lawsuits challenging the BIAW's fundraising activities will continue.

"They (the PDC) may have taken it as far as they felt they could, but they didn't do the right thing here," Lowney said.

It was one of Lowney's lawsuits that created a bizarre political sideshow during the 2008 gubernatorial race, when Rossi was forced to give a highly publicized deposition on his connections to BIAW fundraising a week before Election Day.

The PDC's 181-page investigative report found plenty of evidence that the BIAW had been itching to get Rossi to run for governor again (he'd narrowly lost to Gregoire in 2004) — and that BIAW officials knew they had to be cautious in doing so.

For example, BIAW leaders circulated a "Rossi-lution" to members in March 2007 that talked about drumming up support for a "pro-housing Governor." In a memo, one BIAW official warned that "all official references" should be to "a '08 candidate for governor."

But the PDC found that none of that was illegal.

When Rossi did run, the BIAW became his No. 1 backer, spending about $7 million through political committees to promote him, squaring off against unions and other liberal groups backing Gov. Chris Gregoire. In the end, Rossi lost by 194,614 votes.

One other action against the BIAW is ongoing.

Republican Attorney General Rob McKenna sued a subsidiary of the group in 2008, after the PDC found it had failed to properly disclose its role in political fundraising.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com