September 28, 2020

PDC levies fine against Joshua Freed for violation of campaign loan rules

The Public Disclosure Commission voted unanimously to fine former Bothell Mayor Joshua Freed $50,000 with half the penalty suspended for campaign violations related to personal loans to his unsuccessful 2020 campaign for governor.

Freed acknowledged in a stipulation negotiated with PDC staff that he exceeded the $6,000 limit on repayment of a personal loan to his campaign. The campaign repaid him at least $450,000 of a $500,000 loan later characterized as a contribution he made at the start of his campaign. He also acknowledged that the campaign filed incorrect reports concerning the contribution and/or loan.

The stipulation cited aggravating factors in the case, noting that the loans and/or contributions made up the majority of Freed's campaign funds and that the public was deprived of significant information for a good portion of the 2020 primary election cycle.

Freed lost in the gubernatorial primary election, but subsequently launched a write-in campaign for the office of lieutenant governor.

The Commission suspended half of the $50,000 fine, provided that the remaining $25,000 is paid within 60 days of its final order being issued, that Freed commits no further violations of campaign law or regulation within four years and that he complies with PDC reporting requirements.

Read more about the case in PDC documents online.


Progress report on digital political ad project

Commission members heard a report from a committee studying the evolving digital advertising industry and how it intersects with Washington law that regulates both political campaigns and commercial advertisers.

The committee, composed of PDC staff members and Commissioners, is studying whether any changes are needed to improve political ad disclosure. Part of their review includes looking at how disclosure requirements operate in the digital world, where ad buyers and publishers may not interact directly and where ad sponsors may not be able to directly track where their ads ultimately land.

One concept the committee is studying: tagging political ads with a unique digital identifier at the point of sale.

This would notify ad sellers that they need to collect all the information required by Washington law. Campaigns could include the digital identifier in their expenditure reports, thus linking campaign reports to the published ads. The system could also create the potential for a future ad archive that could be built by retrieving the digital tags attached to the ads.

PDC staff plans to research the technical feasibility of such a system and reach out to additional stakeholders.

"This is something that would be in the interest of both campaigns and the social media companies," said Commission Vice Chair Fred Jarrett.


Proposed permanent rules

The Commission extended through Feb. 11, 2021 its emergency rules governing foreign involvement in financing campaigns in Washington state.

The Commission will take public comment and hold a public hearing on proposed permanent rules at its meeting on Dec. 3, 2020. The proposed permanent rules will be circulated to stakeholders and published on the PDC website prior to the public hearing.

The rules implement Substitute Senate Bill 6152, which was approved during the 2020 session of the Legislature. You can read more about the law on the PDC website.

The Commission also approved two other sets of proposed permanent rules: one updating the reporting of financial affairs by elected and appointed officials and candidates (WAC 390-24), and the other updating procedures for granting modifications of reporting requirements (WAC 390-28).

These proposed rules grew out of the PDC's upgrade of the financial affairs reporting system and questions raised by filers. They also will be circulated to stakeholders and published on the PDC website prior to a public hearing.


Enforcement stats

PDC staff closed a total of 25 cases between Aug. 18 and Sept. 14, 2020.

Of those, two were complaints against Google, alleging the company violated state campaign finance laws that require commercial advertisers to maintain records known as "books of account" for political advertising.

Both those complaints were referred by the Commission to the Attorney General's Office.

A total of nine cases were closed with a reminder, another five with written warnings. Explanations of those types of case resolutions are available on the PDC website.

As of Sept. 14, there were 53 active cases.

Click on this link for details about enforcement cases.


Coming up

Commission Strategic Planning Meeting: Oct. 15, 2020

Regular Commission Meeting: Oct. 22, 2020