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State Attorney General sues anti-union group over RTW efforts

The Stand

OLYMPIA (Oct. 15, 2015) — The Washington State Attorney General’s office sued the anti-union Freedom Foundation on Wednesday for hiding its financial support of several 2014 ballot measures that were intended to impose so-called “right to work” restrictions on public employee unions in various cities across Washington.

freedom-foundation-dark-moneyThe AG’s office filed a lawsuit in Thurston County Superior Court charging the Freedom Foundation with violating state laws by failing to report its independent expenditures in support of ballot measures in Sequim, Chelan and Shelton. The measures, which would have banned union-security clauses in city contracts and opened all bargaining sessions to the public, were rejected in all three cities.

The AG lawsuit alleges that the Freedom Foundation financed the legal campaign to try to force those cities to put the measures on the ballot, but failed to report that advocacy in accordance with the state’s public disclosure laws.

“People have a right to know who is pushing ballot measures in their community and who is paying for it,” said Lynne Dodson, Secretary-Treasurer of the Washington State Labor Council, AFL-CIO and an officer of the Committee for Transparency in Elections (CTE), which filed the initial complaint that led to the AG investigation. “Most groups take pride in openly, transparently advocating for their cause. But in this case, the Freedom Foundation failed to report its expenditures and refuses to disclose its donors. Citizens have no idea who is behind the curtain.”

what-is-the-freedom-foundationWashington has some of the strictest election transparency and disclosure laws in the nation. State laws proscribe substantial fines for violations of RCW 42.17A, including civil penalties of up to $10,000 per violation. However, the CTE’s main goal was to force the Freedom Foundation to disclose all the money raised and spent in support of their initiatives.

“We’re thrilled that the Attorney General has decided to hold the Freedom Foundation accountable for its previously undocumented support for the right-wing ballot initiatives it crafted and pushed in Chelan, Sequim and Shelton,” said Dmitri Iglitzen, an attorney representing the CTE. He added:

While the Freedom Foundation falsely claims to remain uninvolved in electoral politics, the Attorney General’s Office correctly noted that by providing substantial legal services to the individual proponents of these initiatives at no cost, the Freedom Foundation was effectively making an “in-kind donation” in support of those initiatives equal to the value of the salaries and benefits it paid to its lawyers during the time they spent working on these cases.

Moreover, the Freedom Foundation failed completely to file the appropriate disclosure forms with the Washington State Public Disclosure Commission that would have made this information publicly available, as the law requires.   The Committee looks forward to observing the Freedom Foundation comply with these legal requirements retroactively, so that true transparency will be obtained in this situation. And we hope that going forward, the Freedom Foundation will be forced to conduct its activities openly and lawfully, rather than hiding its efforts to impact elections in the shadows of non-disclosure.

Today’s news coverage of the AG’s lawsuit against the Freedom Foundation has pointed out that the case comes in the context of recent similar public disclosure lawsuits against two SEIU local unions, cases that were initiated by Freedom Foundation complaints. The CTE complaint against the Freedom Foundation was filed eight months ago so that timing is coincidental.

mccabe-tomSince taking over as Freedom Foundation CEO in late 2013, Tom McCabe, a former executive for the Building Industry Association of Washington (BIAW), has shifted the organization’s focus from advocating for smaller government to, in his words, “defunding the union political machine.”

The centerpiece of this work in 2014 was the city initiatives. The Freedom Foundation touted them as the work of grassroots activists, but the measures — which were identical in each city — were drafted by the Foundation. When the city councils of each city deemed the measures illegal and voted unanimously to keep them off the ballot, the AG lawsuit alleges that Freedom Foundation staff attorney David Dewhirst pursued lawsuits on behalf of local plaintiffs, free of charge, to try to compel the cities to put the measures on the ballot. Those lawsuits were rejected in each of the jurisdictions.

James Abernathy, general counsel for the Freedom Foundation, told The Seattle Times that the organization didn’t violate the law because it was generally “advocating for the initiative process” and not those specific measures.

The anti-union city initiatives mirror the strategy of the American Legislative Exchange Council (ALEC), a controversial corporate-funded organization that drafts model legislation for conservative lawmakers, to attack unions at the city and local level. It’s an idea also being pushed by national conservative groups like the Heritage Foundation, which released a report urging that localities should “experiment” with local right-to-work ordinances in an attempt to set up legal challenges that could go all the way to the corporate-friendly U.S. Supreme Court.

koch-brothersTom McCabe’s Freedom Foundation refuses to disclose its donors, but Source Watch reports that it has close ties to ALEC and gets its money from national foundations funded by aggressively anti-union Republican billionaires like Richard Scaife, Thomas Roe, and the Walton family. The Center for Media and Democracy also explains how funding for the FF and its fellow members of the State Policy Network is traced back to the billionaire Koch brothers.

McCabe has openly bragged that “litigation is an essential part of our strategy to take on unions and their political allies.” In an Aug. 15 fundraising email to supporters, McCabe admitted that the city-by-city campaign against unions is all about politics, touting his organization’s role in pushing these city propositions and requesting donations for “our effort to defund the union political machine.”

As a tax-exempt 501(c)(3) organization, the Freedom Foundation is prohibited from supporting or opposing political candidates. The group claims it does not do that, but under Internal Revenue Service rules, if the Foundation’s activities “have the effect of favoring a candidate or group of candidates, (it) will constitute prohibited participation or intervention.” The open question is whether its efforts to “defund the union political machine” has the effect of favoring a candidate or group of candidates — specifically, any candidate(s) opposed by unions — and would therefore be a prohibited political activity for a legitimate 501(c)(3) organization.

At his former position at the BIAW, McCabe spent heavily to try to elect Republicans to public office via a scheme that siphoned millions of dollars from the state-run workers’ compensation system. But his tenure there netted few victories and his abrasive rhetoric — BIAW once declared that Gov. Chris Gregoire was a “heartless, power-hungry she-wolf who would eat her own young to get ahead” — alienated elected officials and some of BIAW’s own members.

McCabe’s final straw at BIAW was his decision to spend more than $6 million in 2008, amid a housing crunch that was devastating most home builders, in a failed attempt to get Republican Dino Rossi elected as governor. The internal BIAW acrimony that ensued led to McCabe’s ouster, but not before he negotiated a $1.25 million buyout and a year of health-care coverage as severance.

PREVIOUSLY at The Stand:

Complaint: Right-wing group hid ‘right-to-work’ political activity (Feb. 19, 2015)

Right-wing Freedom Foundation swept, but still suing away (Oct. 17, 2014)

Cities reject extremist group’s push for ‘right-to-work’ (Sept. 9, 2014)

McCabe’s Freedom Foundation plans legal assault on labor (June 9, 2014)

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