Eyman bankruptcy filing stalls state campaign-finance suit
MUKILTEO — This could have been a revealing month in the state’s legal pursuit of anti-tax crusader Tim Eyman — had he not filed for bankruptcy.
The Mukilteo resident filed for Chapter 11 bankruptcy Nov. 28 to protect personal assets as he defends himself against allegations of violating state campaign finance laws. He denies wrongdoing.
The move stopped state attorneys in their tracks in the high-profile case. Under federal law, a bankruptcy filing triggers an automatic stay of civil proceedings against a debtor.
They had to cancel a deposition with Eyman. And they canceled depositions of brothers Mike and Jack Fagan, Eyman’s longtime political partners, which had been slated for Dec. 6 in Spokane, according to public records obtained by The Daily Herald. Developers Kemper Freeman and Clyde Holland and investor Ken Fisher — three of the largest donors to Eyman-led initiatives — also had been lined up for depositions in December, records show.
On Jan. 4, the state will try to get the case back on track when it asks U.S. Bankruptcy Court Judge Marc L. Barreca in Seattle to let it continue the civil lawsuit, filed in March 2017 by Attorney General Bob Ferguson.
The suit accuses Eyman of secretly moving money between two initiative campaigns in 2012 and receiving $308,000 in kickbacks from a signature-gathering firm. It seeks $1.8 million in penalties plus reimbursement of the funds Eyman received from the vendor.
In a legal filing, state attorneys contend a provision in federal law allows civil actions such as theirs to proceed when the intent is to enforce laws rather than collect unpaid debts.
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