Washington Group Allowed to Use Workers’ Comp Rebates for Politics

The Building Industry Association of Washington can continue to spend money on the governor’s race while a court case against the group moves forward, a judge ruled.

Thurston County Superior Court Judge Christine Pomeroy rejected an effort to freeze the association’s assets while three building companies challenge the right of BIAW to use a percentage of their workers compensation insurance rebates on politics.

The politically active builder’s group is a major supporter of Republican Dino Rossi, who is challenging Democratic Gov. Chris Gregoire. Its political action committees have already spent more than $2 million in the race, mostly on radio and TV ads. The group said any freezing of its spending would be a violation of its First Amendment rights.

“They are trying to silence a political opponent six weeks before an election,” attorney Harry Korrell, representing BIAW, told Pomeroy.

Attorneys for the disgruntled companies — Sources for Sustainable Communities, A-1 Builders and SF McKinnon Co. — countered that it wasn’t BIAW’s money to spend.

“You have no First Amendment right to spend other people’s money,” attorney Andrew Friedman said.

Washington law allows groups of businesses to band together to share the risks of workers compensation insurance, known as “retro” programs. Businesses pay premiums individually to the state Department of Labor and Industries, but share in refunds if the group as a whole tallies less in claims than it pays in premiums.

Of BIAW’s approximately 13,500 members, 6,000 participate in the retro program, spokeswoman Erin Shannon said. The BIAW insurance group takes 20 percent of the refunds those members get, giving half to local affiliates and keeping half for itself for administrative costs or for use in political action.

Korrell noted that joining the retro program, is voluntary, as is joining the BIAW.

“If plaintiffs are unhappy with the structure of the programs … they can simply resign,” he said.

The companies argue that the money belongs in a trust fund and that using any of it for politics is a violation.

“In this case it’s the employers who are entitled to the refunds. The BIAW has no property in those refunds,” Friedman said. “It’s the employers’ money to begin with, they’re the ones contributing to the trust.”

BIAW lawyers also argued that the injunction would have affected the group’s ability to do business.

Pomeroy ruled against granting a temporary injunction that would have frozen BIAW’s ability to use that money while the case is pending. The next hearing in the case is set for Oct. 31.

“Not just political free speech was at stake, but people’s jobs were at stake,” BIAW executive vice president Tom McCabe said after the hearing.

In September, Attorney General Rob McKenna’s office sued BIAW and the Master Builders Association of King and Snohomish Counties after the state Public Disclosure Commission agreed unanimously that the two groups failed to properly report their roles in directing political donations.

McKenna’s office filed the lawsuits in Thurston County Superior Court. Status conferences before the court have been scheduled for Dec. 19.