Court of Appeals revives BIAW case

At issue is if builders group should have registered as PAC



A legal dispute over the Building Industry Association of Washington’s support for Dino Rossi’s gubernatorial campaign in 2008 got new life Monday.

The state Court of Appeals handed down a split decision that orders additional judicial review in a 4-year-old case that alleged improper campaign finance activities by BIAW and its failure to register as a political action committee.

At issue was whether BIAW needed to register as a PAC, due to its use of members’ insurance rebates to support Republican Rossi in the 2008 governor’s race.

In the majority ruling announced Monday, acting chief judge Michael Spearman and Judge Ronald Cox in the Court of Appeals Division I said the evidence submitted in the King County case “created a genuine issue of material fact that the BIAW was a political committee under the expenditure prong” of state campaign finance law.

Rob Maguire, a Seattle attorney who has represented BIAW in the case, said the builders have not decided which course to take. But he thinks the majority opinion raises important questions around the right of speech that the Supreme Court ultimately needs to review. He said the ruling suggests an organization with a political arm or function must register as a PAC.

The original case was brought by Seattle lawyer Knoll Lowney on behalf of two former state Supreme Court justices, Robert Utter and Faith Ireland. Both retired jurists had supported Gov. Chris Gregoire’s re-election in 2008.

Lowney said the ruling shows Attorney General Rob McKenna had not gone far enough in prosecuting BIAW in a separate case filed in Thurston County. In the latter case, the state sued BIAW over its concealment of the funds earmarked for Rossi.

In a settlement worth $584,000, BIAW agreed to pay a $242,000 fine over its failure to report until August 2008 that it had collected more than $580,000 for Rossi in 2007. BIAW also agreed to have its Member Services Corp. register as a PAC for that campaign year.

But McKenna did not try to get the entire BIAW organization registered as a PAC.