BIAW accused of pooling $3.5 million in illegal secret fund to defeat Gregoire

OLYMPIA — A group led by two former state Supreme Court justices is accusing the Building Industry Association of Washington (BIAW) of amassing $3.5 million in an illegal secret fund for its campaign to defeat Democratic Gov. Christine Gregoire.

In a letter today to Attorney General Rob McKenna and three county prosecutors, the group said it would sue if the government attorneys do not take action against the BIAW and two local builders associations.

Lawyers for the group, which includes former state Supreme Court Justices Faith Ireland and Robert Utter, say internal BIAW documents prove the builders have been secretly soliciting money for the campaign fund. But they say the builders associations have failed to properly register as "political committees" or report where the money is coming from.

"We now have the goods on the builders, and it's time these kinds of illegal tactics be stopped," said Mike Withey, a Seattle attorney.

Withey is handling the case along with Knoll Lowney, another Seattle attorney whose firm often represents liberal causes.

The Olympia-based BIAW has spent millions of dollars during the past decade on conservative issues and candidates. The group is widely despised by labor unions, environmentalists and Democrats.

As it did in 2004, the BIAW is airing television and radio ads attacking Gregoire's record. The group this week posted a new video on its Web site, Changeourgov.com, claiming Gregoire supports imposing a state income tax — an assertion Gregoire vehemently denies.

The BIAW also has spent heavily to elect conservative judges to the state Supreme Court.

Tom McCabe, the BIAW's executive vice president, said he wasn't worried about Friday's lawsuit threat.

"It's just one more attack ... to try to shut us up," McCabe said.

In 2005, labor lobbyists tried unsuccessfully to get the Democrat-controlled Legislature to cut off one of the BIAW's main sources of political funds — money it makes running a workers-compensation safety program for thousands of homebuilders statewide.

In 1997, the Washington State Labor Council filed a complaint accusing the builders group of illegally using money from the workplace safety program for political purposes. After a months-long investigation, the state Public Disclosure Commission (PDC) determined the BIAW's political spending was legal.

But Lowney said the new case raised Friday is different. It accuses the BIAW and the Master Builders Associations of King and Snohomish counties of improperly using not just their members' money, but also of illegally soliciting campaign cash from outside groups and individuals.

The internal documents cited in the complaint were gathered through discovery in another lawsuit Lowney's firm is pressing against the BIAW on behalf of several of the association's members.

Most campaign finance complaints are filed directly with the PDC. But state law also allows citizens to pursue complaints through the courts, as long as they first give the attorney general and appropriate prosecuting attorneys a chance to act on the allegations.

McKenna and the local prosecutors have 55 days to decide whether to take up the case against the BIAW.

Janelle Guthrie, spokeswoman for McKenna, said the attorney general had not yet seen the letter from Withey and Lowney.

"However, upon receiving a letter such as this, it is standard practice for us to send it to the Public Disclosure Commission for preliminary investigation prior to making a decision to take action," Guthrie said.

Ralph Thomas: rthomas@seattletimes.com