Heidi Wills Accused of Violating Campaign Finance Laws Again

Wait, these numbers don't quite add up... Lester Black

Heidi Wills, the ex-city council member who's running for an open seat in District 6, lost her council job in 2003 in large part because of campaign finance violations (*cough* Strippergate *cough*). In her attempt to regain a seat on the council this year, Wills has taken pains to assure voters she's learned and grown from her mistakes, and that they won't happen a second time.

But according to a new complaint lodged with the Seattle Ethics and Elections Commission, Wills has violated rules limiting in-kind campaign contributions and she's also concealed the true source of in-kind contributions to her campaign.

The complaint centers around an October 8th fundraiser on a hotel rooftop in Ballard, and it raises questions about who really paid to put the event on and how much that event support really cost. Shortly after the complaint was filed, Wills moved to pay the alleged full cost of the event herself. But, the path to the resolution was sloppy and filled with many unanswered questions. Wills has promised scrupulousness in the wake of Strippergate, but has she really grown from her past transgressions?

How Much Is a Fundraiser at the Hotel Ballard Really Worth?

According to the complaint, which was filed by progressive political activist Robert Cruickshank, the fair market costs for Wills's October 8 fundraiser at the Hotel Ballard should have been more than $5,000.

Instead, Wills initially reported to local election regulators that the event cost only $1,000. Cruickshank's complaint also alleges Wills concealed the true manner of paying the event's costs, which her campaign initially described as two $500 in-kind contributions.

Wills has since amended her disclosure filings and told The Stranger that her initial disclosure errors were due to her campaign trying above all else to meet a filing deadline. The intent, Wills said, was to meet the deadline regardless of the accuracy of her disclosures and then amend the disclosures later.

But the amended disclosures still don't add up.

The Event

To understand why, it helps to begin with the event at the center of this new complaint.

Earlier this month, Wills held a fundraiser on the Olympic Rooftop Pavilion of the Hotel Ballard that was hosted by the hotel's owner, Jim Riggle, who has already maxed out in personal donations to Wills. The space is advertised as having sweeping views of Old Ballard and is often used for weddings. It is also known for hosting this special event.

Around 70 people showed up and Wills raised a total of $11,000. The venue itself and the catering were paid for, Wills says, as in-kind contributions (meaning, essentially, they were gifts to the campaign).

But according to the complaint against Wills and her own financial disclosures, both the venue and the catering by Hotel Ballard's restaurant, Stoneburner, were significantly undervalued.

Initially, Wills had reported the in-kind contributions for the venue and catering as totaling $1,000. (Two in-kind contributions of $500 each.)

However, after the complaint was filed, Wills and her team updated the filings to report the real value—$1,200 for the catering from Stoneburner, Hotel Ballard's restaurant, not $500.

Adding the $1,200 for catering to the $500 for the venue brings the total Wills event costs to $1,700, according to amendments the Wills campaign made on Monday. They are now footing this new, updated bill themselves.

That's a lot less than what the Hotel Ballard appears to have told Cruickshank a similar event would cost.

In his complaint, Cruickshank provided an e-mail correspondence with Stoneburner, the restaurant typically in charge of renting out and catering the Hotel Ballard's rooftop pavilion. He was told Stoneburner charges a $4,000 food and drink minimum plus a $100 set-up and tear down fee for such events. The Hotel Ballard also charges a flat rental fee of $1,000 for the rooftop pavilion.

Therefore, Cruickshank says, Wills should be reporting total costs for the event that are over $5,000.

Wills maintains the event cost only $1,700 because the catering from Stoneburner was only appetizers (cheese and crackers), the event was standing room only, and there was no open bar. Riggle, the owner of the Hotel Ballard, also rents out the rooftop pavilion for $500 on weekdays, Wills said. However, I was unable to independently confirm that claim. When I called Stoneburner, they said the Hotel Ballard was responsible for the event so they couldn't discuss it. When I called the Hotel Ballard, they said to talk to Stoneburner about it.

When I pressed for typical rates for such events, I was told by Stoneburner that it's "food & beverage minimums and rental fees vary for each event depending on the time of year." Similarly, the Hotel Ballard told me "the cost for renting the pavilion varies depending on a multitude of factors, much like the cost of hotel rooms fluctuates throughout the year." The correspondence in the complaint that put the total cost at $5,000 was for an event planned in the same season, on the same day of the week, and with nearly the same amount of people.

When it comes to in-kind contributions or non-monetary contributions, "the law requires that 'fair market value' be reported," Wayne Barnett, Executive Director of the SEEC, said. "Essentially what an item would cost in an arms-length transaction on the open market. So if I contribute a case of champagne for a campaign event, I can’t give you Dom Perignon that’s valued as if I’ve given you Freixenet."

At one point in our discussions about all this, Wills said she had "an invoice [she] could forward" to me. That could definitely have shown what the hotel and restaurant considered to be "fair market value" for the event services.

But five minutes later she called me back. "I'm sorry, I can't track down the invoice," Wills said. There wasn't one, she said, and the amount for the event was stated in an e-mail thread she'd forwarded me involving Riggle and Peter Schrappen, Director of Government Affairs for the Northwest Marine Trade Association.

The E-mail Thread

Is the $1,700 price tag that the Wills team attached to this fundraiser accurate? The email thread between Riggle and Schrappen only makes things more confusing.

The thread forwarded to me by Wills suggests Riggle and Schrappen believed the event had cost $2,500 to put on, not $1,700.

(If you've ever had an event at the Olympic Rooftop Pavilion would you let me know what it cost you?)

The e-mail thread also appears to show Riggle and Schrappen trying, after the event, as well as after Wills's initial disclosure reports were filed, to figure out how to make the in-kind contribution numbers pencil out so that no one would be breaching the $500 individual contribution limit (which covers both cash and in-kind contributions).

That's an eery echo of one aspect of Strippergate, which involved an arrangement to get around individual contribution limits.

"I'm still a little confused about the maximum amount of a contribution," Riggle wrote in the first e-mail, one day before the October 8 event. "The owners of Stoneburner will contribute the food. The bill is $1,200. Can they each do $500 as a couple with their wives and then Stoneburner can do $250? What is the maximum?"

On October 15, the day before the Wills campaign filed disclosures saying the event cost $1,000 and that this cost was paid through two $500 in-kind contributions from unnamed sources, Schrappen wrote to Riggle: "The husband and wives of the Stoneburner ownership group can contribute $500/person, which bumps it up to $2,000 as the 4500 [sic, he says he meant to type $500] limit with those four. Stoneburner as a legal entity can contribute $500 as well so that should cover the costs of the event."

This would suggest they thought the event cost around $2,500. Asked about this, Schrappen could not explain why the Wills campaign came to believe the event cost $1,700. He was told the cost was $1,700 on the day the filing was amended, and the campaign paid the funds itself. Riggle did not respond to a request for comment.

Later in the e-mail chain, Schrappen asked Riggle to provide the names, addresses, and occupations for the people connected to Stoneburner who would be donating the money to cover the event. The Wills campaign says it never received those names, addresses, and occupations.

This is because, according to Wills, Riggle is in Alaska. Fourteen days passed between when Schrappen and Riggle first e-mailed trying to find people to attach these in-kind contributions to and when the campaign paid the bill in full. The Stoneburner donors who were supposedly going to pay for the event never materialized.

Perhaps that is because, as the managing director of Kiterocket, a PR and marketing company, Jamie Campbell, said in an e-mail, "Stoneburner had no involvement in the event you’re reporting on."

This Monday, after the Cruickshank complaint was filed, the campaign withdrew the in-kind contribution from Stoneburner and submitted a $1,200 debt disclosure to cover the costs of the food outlined in the e-mail.

"Subterfuge"

To get an expert view on all this, I called Matt Loschen, a treasurer for legislative races in Washington who is not involved with Seattle campaigns.

"The guy (Riggle) who went and already maxed to Wills can’t give her anything more, period," Loschen told me. "If you’re giving something to a campaign that you normally charge money for, that’s a donation. The subterfuge of saying someone else paid for it when no money changed hand is wrong."

Additionally, to Loschen, it seems like Riggle was massively undervaluing his venue.

"The whole subterfuge of saying these other people really paid for the event is not just inaccurate reporting," Loschen said. "It's reporting that puts one person at an advantage over another. If Wills's opponent were to show up and ask for that event rate he probably wouldn’t get it."

The Washington State Public Disclosure Commission clearly states that for an in-kind contribution such as this one, the contributor must charge the amount he or she "would ordinarily expect to receive if someone were paying him or her to provide the item or service." Not doing so is directly in violation of these laws, Loschen said.

So, were the men who hosted Wills's event trying to find people to contribute money in order to avoid contribution limits?

Schrappen said, "I was waiting for info from Jim on how to attribute the in-kind donations for light snacks, but since we didn’t hear back from him on that e-mail I shared with you, the campaign paid the food bill rather than attribute the appetizers as an in-kind contribution."

Wills also said no.

All she did wrong, she told me, was rush to get her disclosure reports filed.

"The SEEC guidebook says it’s most important to report on time even if you don’t have all the information and fix it later with an amendment," Will said.

It's a tricky issue for the SEEC, according to Wayne Barnett Executive Director of the SEEC, because "we do want them to report timely... that’s the key thing." But, he added, "It’s not an excuse if candidates hadn’t gotten the bill. We do encourage them to report what they know, but at the same time we do require that they do report everything they know accurately at the time."

When Wills realized they didn't have an invoice for the event, she said, they used Riggle's and Schrappen's e-mail thread as a basis for what to pay: $1,200 for the food. So why did they attribute the cost as a $500 in-kind contribution the first place?

Wills stressed that campaigns make amendments to filings all the time and her campaign doing so wasn't wrong. She pointed to Dan Strauss, her opponent, who made updated filings for a fundraising event on the same night as hers that he hadn't reported. Strauss's event was a fundraiser at a shipyard and the final reported expenses were $100 for food from Trader Joe's.

Wills told me that there are a lot of rules involved in disclosing campaign finances. "I think a number of people are trying to figure out the rules and understand and abide by them," Wills said. "There's a lot involved in filing these reports. I recognize this as a candidate."

In the end, just like with Strippergate, Wills paid the bill. However, just like with Strippergate, there was some sloppy bookkeeping involved. The SEEC still has a job to do here.

"We still have to resolve the complaint," Barnett with the SEEC said, "and if it’s dismissed the complainant can appeal. But amending doesn’t necessarily mean we’re done."