Democrats accuse conservative Whatcom PAC of hiding donors

Posted by Ralph Schwartz on October 18, 2013 

Save Whatcom (Whatcom First?) doesn't name donors on campaign flyer

Tracing the money donated by coal companies to a conservative Whatcom political action committee wasn't as straightforward as it first appeared.

There is not one but rather there are two conservative Whatcom PACs playing a role in this year's local elections -- Save Whatcom (I wrote about their coal-industry donors this morning) and Whatcom First.

Democrats sent a complaint to the state attorney general, asking that the shifting of funds between the two groups be investigated. 

A letter sent by Dem Chair Mike Estes to the AG brings up a lot of technical reporting requirements that Dems say weren't followed. The accompanying press release makes the following claim, which is easier to latch onto:

"Washington state law requires the five largest donors to an advertisement to be printed on a piece of mail or television advertisement. They have set up two committees and transferred money between them, in an attempt to hide donor names from the public. In trying to hide their money, they skirted compliance and reporting requirements."

So what happened? The five largest donors to Save Whatcom, which I listed in my most recent previous post, are not on the group's campaign flyers. Rather, the flyers are distributed by Whatcom First, which received just about all of its money, $154,000 in a lump sum from Save Whatcom.

That way, the groups were able to put on their flyers "sponsored by Save Whatcom" rather than the top five actual donors to the groups (Cloud Peak Energy, a coal-mining outfit; Global Coal Sales; coal stockpiler Corbin Robertson; SSA Marine, which would build a coal terminal at Cherry Point; and local financial planner Richard Donahue).

Does this skirt compliance and reporting requirements, as the Dem's release said? Save Whatcom spokeswoman Kris Halterman said the second PAC, Whatcom First, was created for the express purpose of making sure the group was in compliance with the Public Disclosure Commission. The group worried it would not have its top five donors correct on its printed material, Halterman said. They were working on a tight schedule, she said.

"We didn't know who was donating. We didn't know how much money we were going to get," Halterman said.

"This is a legal way to make sure you stay within the compliance of the PDC. It's nothing new."

Lisa McShane, who sent the Democrats' press release, said indeed what Save Whatcom did was nothing new.

"There's a term for it. It's called 'shadow PAC,' and people do it to hide their donors," McShane said.

Halterman's explanation, McShane said, "makes no sense."

"I'd be really surprised if PDC gave them that advice."

"The only reason to create a second PAC is to hide your top five donors," McShane said.



The Democrats' press release, edited for length:


Big coal violates law to elect Republicans

Whatcom County citizens call on Attorney General and PDC to act immediately


BELLINGHAM – Groups supporting the proposed coal terminal at Cherry Point have set

up political committees to deliberately hide $154,000 from the public and in doing so,

violated state law at least 12 times.

The political committees, which share the same treasurer, Orphalee Smith, CPA, of

Bellingham, are set up in a way to illegally impact local elections in Whatcom County.

With critical races in the balance, community leaders in Whatcom County are calling on

the Washington State Attorney General to step in and make Saving Whatcom PAC and

their big coal donors comply with the laws of Washington.

Washington state law requires the five largest donors to an advertisement to be printed on

a piece of mail or television advertisement. They have set up two committees and

transferred money between them, in an attempt to hide donor names from the public. In

trying to hide their money, they skirted compliant and reporting requirements.

“We always knew the SSA Marine and the big coal companies would do whatever it took

to win this election, but these are flagrant violations of the law,” said Mike Estes, chair of

Whatcom Democrats. “Big coal clearly believes they can buy a local election in

Whatcom County and just deal with the legal details later.”

“I’m not surprised that they’re trying to buy the election,” said Lisa McShane, the cochair

of Whatcom Wins, the coordinated campaign working to elect Democrats to the

county council and defeat the tea party Republican slate. “But the truth is, this is a local

election and we’ve got hundreds of volunteers talking to voters. I think on election day

they’ll see that people are more powerful than coal money.”

The coal companies are supporting the four Republican candidates, Bill Knutzen, Kathy

Kershner, Michele Luke and Ben Elenbaas.

Background on the top 5 donors

SSA Marine - $12,000

SSA Marine is the applicant for North America’s largest coal export terminal. They have

applied for permits to build this north of Bellingham, at Cherry Point. The Whatcom

County Council is a local 7-member body with a yes or no vote on the terminal.

Corby and Barbara Robertson of Quintana Minerals - $32,000

Corby Robertson of Quintana Minerals has significant investment in coal. In 2003 Forbes

wrote that “Robertson sits atop the largest private hoard in the nation – 21-billion tons of

reserves he has quietly amassed over three decades.”


Cloud Peak Energy - $50,000

Cloud Peak is the fourth largest coal producer in the US and donated $50,000 to the

Whatcom County Council focused PAC. That’s a large donation for them. In 2012 Cloud

Peak Energy donated just $32,240 total.

Just last week Cloud Peak stepped up their activity in getting permits for GPT, according

to the Sheridan Press. This was at a Sheridan County Chamber of Commerce meeting

where they also discussed their relationship with the Alliance for Northwest Jobs.

Global Coal Sales - $50,000

Global Coal Sales of Columbus appears to be a small company that markets coal for

larger partners. According to corporate information available online, their annual

revenues are around $500,000. Donating 1/10 of their revenue to elect Republicans in a

Whatcom County Council race seems like an unusual allocation of funds.



Democrats' letter to the AG:


Mike Estes

210 Texas St

Bellingham, WA 98225


Honorable Bob Ferguson

Attorney General of Washington

1125 Washington Street SE

PO Box 40100

Olympia, WA 98501


RE: 45-day Citizen Action Letter, pursuant to RCW 42.17A.765(A)

Saving Whatcom Co dba Save Whatcom & Whatcom First


Dear Attorney General Ferguson:

This letter concerns two recently created Political Action Committees, Saving Whatcom Co and Whatcom First.

I am writing this letter pursuant to the citizen action provisions detailed in RCW.17A.765(A) to inform you that I have reason to believe that both of these organizations have willfully and purposefully with malice hid contributions and expenditures from the public, totaling more than $154,000.

By analyzing the Public Disclosure reports, I have reason to believe that these two political action committees have violated at least 12 instances of RCW 42.17A and WAC 390. Both committees share the same treasurer and on the C1PC form of Whatcom First, filed on 10/17/2013, it delineates that these two committees are affiliated.

I believe these violations are intended to illegally skirt compliant and reporting requirements and illegally impact elections up here in Whatcom County.

1 Violation of RCW 42.17a.240 - Missing or Unreported Money – to the tune of at least $154,000

 On 10/14/2013, Whatcom First reported receiving a contribution from Saving Whatcom Co in the amount of $154,000. However, no C4 report was ever filed (due on 10/15/2013) showing this as an expenditure on the C4 report of Saving Whatcom. In fact, no expenditure reports appear to exist at all for this organization that show raising funds in excess of $162,055.45 (as of 10/18 via Search Database)

9 Violations of RCW 42.17a.235 – Missing or Consistently Late Reports

Starting June 1, 2013, C3s are due every Monday (except on bank holidays) for the previous seven days of deposits. Nearly every single C3 for Saving Whatcom Co is egregiously late, depriving the public of timely and accurate information as it relates to elections. Nearly every C3 for Whatcom First is also late.

 8/23 Saving Whatcom Deposit for $5000 from Richard Donahue. C3 was due on Monday, August 26th. The non-electronically filed C3 was originally filed with the PDC on 9/23, 29 days late.

 9/12 Saving Whatcom Deposit for $300 (originally filed PDC as non-electronically filed C3) was received on 9/23 and was due on 9/16, 7 days late.  9/9 Saving Whatcom deposit for $100 – was originally on a C3 with a deposit date of 9/12, then was re-filed electronically with a deposit date of 9/9 but was received by the PDC on 10/17. Depending on which deposit date you believe, this report is either 7 days late or is 31 days late.

 9/12 Saving Whatcom deposit for $775 – was originally filed non-electronically with a deposit date of 9/10 but then was re-filed electronically with a deposit date of 9/12. The original report was received on 9/23 and the electronically filed report was filed on 10/17, so depending on which deposit date you believe, the report is either 4 or 6 days late.

 9/16 Saving Whatcom deposit of $200 was filed electronically on 10/16, but was due to the PDC on 9/23 or 23 days late.

 10/9 Saving Whatcom deposit of $12,000 from SSA Marine was due on 10/15 but was filed on 10/17, two days late.

 10/10 Saving Whatcom deposit of $100,000 from Cloud Peak and Global Coal Sales was due on 10/15 but was filed on 10/17, two days late.

 10/11 Saving Whatcom deposit for $33,150 was due on 10/15 but was filed on 10/17, two days late.

 9/17 Whatcom First deposit for $190 was due on 9/23 but wasn’t received by the PDC until 9/30, seven days late.

2 Violations of RCW 42.17a.240 and 17a.235(7) – Certifying Misleading Information

On two occasions Saving Whatcom certified reports that they knew were misleading, a violation of RCW 42.17a.240 in each instance. Original non-electronic reports that were filed by the committee had different deposit dates or deposit totals on both 9/10 (or 9/12) deposit of $775 (electronic confirmation #100548884) and the 9/12 (or 9/9) C3 deposit of $300 (or $400).

There appear to be other violations such as the 10/7 Saving Whatcom deposit of $525 which was never filed electronically or the nearly month lag time between filing the non-electronic reports (which again were filed very late in the first place) and the electronic reports – nearly an additional month later.

With such a large sum of money involved and critical races hanging in the balance in Whatcom County, I respectfully ask that the Attorney General give this citizen action letter its highest priority. These PACs need to stop their illegal behavior and cease activity until they comply with the law.


Mike Estes


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