Whatcom County Republican Party (3): Alleged Violations of RCW 42.17A.235 and .240 for failing to timely and accurately disclose contributions and expenditures (EY21; Sept21)

Case

#99265

Respondent

Whatcom County Republican Party

Complainant

Daniel Raas

Description

A complaint was filed against the Whatcom County Republican Party (WCRP), a bona-fide political party county committee registered and reporting with the PDC, alleging violations of RCW 42.17A.235 and .240 by failing to: (1) timely and accurately disclose contribution and expenditure activities on Monetary Contributions reports (C-3 reports) and Summary Full Campaign Contributions and Expenditures report (C-4 reports) undertaken during calendar year 2020; and (2) timely and accurately disclose contribution and expenditure activities on C-3 and C-4 reports, including the carry forward balance of 2020 surplus funds undertaken during calendar year 2021.  In addition, it was also alleged that the WCRP exceeded the Non-Exempt funds contribution limits for two contributors during CY 2021.

The WCRP is a Bona Fide County Political Party Committee that has been registered and reporting with the PDC dating back to at least the early 1990’s.  On January 9, 2021, the Committee file a Registration as a Bona Fide County Party Committee for its Non-Exempt Account, selecting the Full Reporting Option, and listing John Ramsey as Chairman, Ashley Butenschoen as Vice-Chair, Russell Dzialo as Treasurer, and Heidi Shires as Secretary.

On December 17, 2021, the PDC conducted an Initial Hearing (Case Review Status) and opened a formal investigation against the WCRP. 

RCW 42.17A.235 and .240 require Bona Fide Political Party Committees under the Full Reporting option to timely and accurately file C-3 and C-4 reports disclosing contribution and expenditure activities undertaken during calendar years 2020 and 2021. 

Whatcom County Republican Party: 2020 Committee Activities

The WCRP failed to accurately disclose contribution and expenditure activities for calendar year 2020, which resulted in a $14,381.76 discrepancy, since the WCRP's 2020 ending cash on hand balance was listed as $4,039.10 on the December 2020 C-4 report, but the 2021 beginning balance on January 1, 2021, totaled $18,420.86 as disclosed on the January 2021 C-4 report.

On October 18, 2021, Russell Dzialo, Treasurer for the Whatcom County Republican Party (WCRP) sent an email responding to the allegations listed in the complaint stating that he took “responsibility for the accuracy and any errors that may have occurred” in filing the required C-3 and C-4 reports. He stated he served as a volunteer party committee Treasurer for the WCRP without pay, and that any mistakes or errors for the reports he filed on behalf of the WCRP were “attributed to simply being overly busy and distracted.”  

Mr. Dzialo stated that the WCRP had a technological issue in which they found they could not recover their Online Reporting of Campaign Activity (ORCA) campaign finance software dataset for calendar year 2020.  He stated the WCRP had to manually re-enter the 2020 contribution and expenditure activities for the whole year.

The WCRP engaged the services of Bruce Ayers to review the committee’s books of account, re-enter the contribution and expenditure activities, and reconcile the totals with the committee bank statements.  Mr. Ayers and the WCRP’s reconciliation work, which was confirmed by PDC Staff’s review, indicated that a portion of the $14,381.76 discrepancy in the December 31, 2020, ending committee balance was attributed to two duplicated expenditures that were disclosed on the initial 2020 7-Day Pre-General Election C-4 report.  

The 2020 7-Day Pre-General Election C-4 report was timely filed by the WCRP on October 26, 2020 and disclosed the following duplicated expenditures: (1) A $8,024.80 expenditure made on October 23, 2020, to Lithex NW Printing from Bellingham, WA for “Mailers plus postage”; and (2) A $2,853.38 expenditure made on October 13, 2020, to Lithex NW Printing from Bellingham, WA for “525-yard signs.”

Mr. Ayers and the WCRP’s reconciliation work, and PDC Staff’s review, confirmed that the $14,381.76 discrepancy also included contribution and expenditure activities that were not timely disclosed on either C-3 or C-4 reports during calendar year 2020.  Those contribution and expenditure activities included a $500 expenditure made on October 14, 2020, to The Fourth Corner in Bellingham, WA for “Digital Ad in Fourth Corner Web Site not reported in 2020”, and numerous unreported small contributions and proceeds from low-cost fundraiser sales of merchandise during 2020.  In addition, the WCRP filed numerous initial C-3 and amended C-3 reports as part of calendar year 2020’s reconciliation work disclosing additional contributions that had been received totaling slightly more than $3,000. 

On January 31, 2023, PDC staff received a signed Statement of Understanding (SOU) completed by officers of the WCRP, acknowledging violations of RCW 42.17A.235 and .240 by failing to timely and accurately disclose contribution and expenditure activities undertaken by the Whatcom County Republican Party during calendar year 2020, along with a check for $450 for penalty assessed in the matter.  The signed SOU and $450 penalty payment resolves the allegations concerning the violations for failing to timely and accurately disclose contribution and expenditure activities. 

Whatcom County Republican Party: 2021 Committee Activities

Mr. Dzialo stated that the 2021 complaint allegations (allegation #2 through #5) “were all caused by a bug in the ORCA software that I found when entering the auction reports following our 2021 Lincoln Day Dinner fundraiser. These errors were reported to the PDC and since the duplicate reports did not show up in my ORCA portal the PDC had to delete them for me.”   He stated that the WCRP auction proceeds allegation in the complaint included an ORCA issue in which all the contributors who purchased auction items to the “silent auction had their contributions multiplied by a factor of six.” 

Mr. Dzialo stated that he contacted PDC staff concerning this matter on May 24, 2021, that it was resolved on June 3, 2021 when PDC staff confirmed that the duplicate reports had been deleted, and he “attached copies of the email correspondence with the PDC for the record.”  The email string between Mr. Dzialo and PDC staff was from May 24 through June 3, 2021, concerning numerous WCRP C-3 reports for contributions received on April 10, 2021.  The WCRP filed the C-3 reports on April 13, 2021, as auction receipts that were part of the proceeds from the Lincoln Day WCRP Dinner/fundraiser.  On June 3, 2021, PDC staff emailed Mr. Dzialo concerning the duplicated C-3 reports and stated the following:

“The extra C3 reports with auction reports for the Whatcom County Republican Party have been deleted from the Public Disclosure Commission's database. The contribution total for 2021 and the aggregate contributions for individual donors should now show correctly. Our IT department is now aware of the technical problems that you had submitting a long auction report--thank you for bringing this issue to our attention.”

Once PDC staff deleted the duplicate C-3 reports, the WCRP refiled amended C-3 and C-4 reports disclosing party committee contribution and expenditure activities that were undertaken during calendar year 2021.  No evidence was found that the WCRP failed to timely disclose any contribution and expenditure activities that were undertaken during the calendar year. 

WCRP exceeding Non-Exempt account contribution limits in CY 2021

The complaint included allegations that the WCRP exceeded the Non-Exempt funds contribution limits as of May 7, 2021, for calendar year 2021 concerning contributions received from Pacific Growers, alleged to have totaled $6,990, and Asset Advisors, alleged to have totaled $5,775.  As noted above, the WCRP had some ORCA technological reporting issues in 2021, especially concerning the proceeds received from the Lincoln Day Dinner.

Mr. Dzialo, former Treasurer stated: “These errors were reported to the PDC and since the duplicate reports did not show up in my ORCA portal the PDC had to delete them for me.”  He stated the WCRP auction proceeds from the Lincoln Day Dinner were duplicated as the result of an ORCA technological “issue in which all of the contributors who purchased auction items to the silent auction had their contributions multiplied by a factor of six.” PDC Staff reviewed the C-3 reports that were re-filed by the WCRP after the duplicated  C-3 reports had been deleted.  Staff’s review found the following:  (1) Pacific Growers out of Blaine made a total of 20 contributions totaling $3,570 during calendar year 2021.  The $3,570 in total contributions received from Pacific Growers during calendar year 2021 included 19 contributions of $30 all made on April 10, 2021, and a $3,000 monetary contribution made on March 19, 2021; and (2) Asset Advisors made a total of five monetary contributions totaling $265, which were all made on April 10, 2021, and included two $95 monetary contributions and three $25 monetary contributions. 

Once the initial duplicate C-3 reports filed by the WCRP were deleted and the corrected C-3 reports were re-filed, contributions received by the WCRP Non-Exempt Funds account from Pacific Growers and Asset Advisors did not exceed the $5,500 threshold during calendar year 2021.

 Based on these findings, PDC staff found no evidence of further violations that would require conducting a more formal investigation into the complaint or pursuing any enforcement action in this instance. As noted above, PDC staff received a signed Statement of Understanding (SOU) completed by officers of the Whatcom County Republican Party, acknowledging violations of RCW 42.17A.235 and .240 by failing to timely and accurately disclose contribution and expenditure activities undertaken during calendar year 2020, and paid a $450 civil penalty that was assessed in the matter to resolve this allegation. 

Concerning the remaining allegations, PDC staff: (1) found no evidence that contribution limits were exceeded by the Whatcom County Republican Party Non-Exempt Funds account during calendar year 2021 in violation of RCW 42.17A.405; and (2) found that the duplicate C-3 reports filed in 2021 by the Whatcom County Republican Party Non-Exempt Funds account were due to an ORCA technological issue they experienced, which required C-3 and C-4 reports to be deleted by PDC staff and refiled by the party, and did not rise to the level of a minor violation. 

The PDC has dismissed this matter in accordance with RCW 42.17A.755(1).  

Disposition

Resolved through Statement of Understanding

Date Opened

October 07, 2021

Areas of Law

RCW 42.17A.235, RCW 42.17A.240

Documents

• PDC Case 99265 Initial Hearing Results Respondent Whatcom County Republican Party.pdf
• 99265 Whatcom County Republican Party Complaint.pdf
• SOU - 99265 - Whatcom County Republican Party.pdf
• PDC Case 99265 Whatcom County Republican Party response.pdf
• Whatcom County Republican Party Complaint Return Letter with SOU (PDC Case 99265).pdf

Penalties