Hachamovitch, Dean: Alleged Violations of RCW 42.17A.710 for failure to accurately disclose debts on the Annual CY 2021 F-1 report (EY22, Oct22)

Case

#112896

Respondent

Dean Hachamovitch

Complainant

Michele Earl-Hubbard

Description

The Public Disclosure Commission (PDC) has completed its review of the complaint filed on September 27, 2022. The complaint alleged that Dean Hachamovitch may have violated RCW 42.17A.235 and .240 by failing to report contributions and expenditures for his 2021 campaign for Clyde Hill City Council; and RCW 42.17A.710 by failing to list reportable entities on the F-1 Supplement for his Personal Financial Affairs Statement (Form F-1) covering calendar year 2021, and by failing to report debt on the F-1 report.

PDC staff reviewed the allegations listed in the complaint; the applicable statutes, rules, and reporting requirements; the F-1 report filed by Mr. Hachamovitch for the period January 1, 2021 – December 31, 2021; Mr. Hachamovitch’s Candidate Registration filed on September 5, 2021; and responses to the complaint provided by Mr. Hachamovitch on October 17, 2022, and October 24, 2022, to determine whether the record supports a finding of one or more violations.

Based on staff’s review, we found the following: 

• On September 5, 2021, Mr. Hachamovitch, timely filed a Candidate Registration declaring his candidacy for election to the City of Clyde Hill Council, selecting the Mini Reporting option, and listing Ronald Souza as President and Treasurer of his campaign. As a Mini Filer, C-3 and C-4 reports are not required.
• On April 13, 2022, Mr. Hachamovitch timely filed a Personal Financial Affairs Statement for the period January 1, 2021, through December 31, 2021. 
• On October 5, 2022, Mr. Hachamovitch was notified of your complaint and in the week of October 10 – 16, 2022, Mr. Hachamovitch revised his F-1 to accurately disclose reportable ownership and directorship interests in a Limited Liability Company and two tax-advantaged 529 Plans.
• In his response to the complaint about the nondisclosure of these reportable entities, Mr. Hachamovitch explained that he “formed ‘Dean Hachamovitch LLC’ several years ago for potential use in relation to my consulting work, but have never actually used if for anything. As it has been inactive and unused, I simply did not think of reporting it on the F-1.”  “I will be sure to include it in my future F-1 filings.” As well, Mr. Hachamovitch also explained, “I recently contacted my financial advisor to confirm I was not missing anything else. My advisor identified two 529 Plan accounts I created for the benefit of my niece and nephew. I apologize for this omission and have also included these accounts in my amended F-1.”
• In his response to the alleged nondisclosure of debt, Mr. Hachamovitch stated, “In relation to a land use decision, I previously pursued an administrative appeal against the City of Clyde Hill, which concluded in 2021. After the appeal was resolved, the City Attorney at the time sought to charge me attorney fees in addition to the City’s customary fees and costs. I paid to the City all the customary fees and costs I owed for the appeal, but I disagreed that I owed any attorney fees. My attorney sent a letter disputing that portion of the demand as unlawful. Subsequently, both the interim City attorney and new City Attorney agreed, and the new City Attorney rescinded the demand.” 

While staff found Mr. Hachamovitch’s F-1 report included deficiencies, he fully cooperated with PDC staff during its review and took responsibility for the deficiencies by amending the F-1 report to include reportable entities. However, Mr. Hachamovitch did not include the disputed debt on an amended F-1 report.

Based on these findings, staff has determined that in this instance, the failure to include all reportable information on Mr. Hachamovitch’s F-1 Report covering 2021 activity does not amount to a finding of a violation warranting further investigation. When the complaint was received, staff informed you that C-3 and C-4 reports of contributions and expenditures are not required for filers under the Mini Reporting Option. Mr. Hachamovitch was a Mini filer, not required to file C-3 and C-4 reports.

However, pursuant to WAC 390-37-060(1)(d), Mr. Hachamovitch will receive a formal written warning concerning his failure to timely and accurately disclose reportable ownership and directorship interests in a Limited Liability Company and two tax-advantaged 529 Plans and for his failure to disclose disputed debt that had not been formally dismissed, on his Personal Financial Affairs Statement for 2021 activity. The formal written warning will include staff’s expectation that Mr. Hachamovitch include all reportable entities and debt on future F-1 reports. The Commission will consider the formal written warning in deciding on further Commission action if there are future violations of PDC laws or rules.

Based on this information, the PDC finds that no further action is warranted and has dismissed this matter in accordance with RCW 42.17A.755(1).

Disposition

Case Closed with Written Warning

Date Opened

October 05, 2022

Areas of Law

RCW 42.17A.710

Documents

• 112896 Hachamovitch Dean Response.pdf
• 112896 Hachamovitch Dean Complaint.pdf
• 112896 Hachamovitch Dean Complaint Return (combined).pdf
• 112896 Hachamovitch Dean Response #2.pdf