SEATTLE -- When KIRO Team 7 Investigators first started working on this story, we were told, "That's how politics works. It's all legal."

Now our findings have prompted the State Auditor to launch an inquiry into why hundreds of thousands of your transportation tax dollars are being funneled to a charity.

Investigative Reporter Chris Halsne spent weeks unraveling how some major transit agencies might be skirting laws on lobbying and gifting.

The law generally prohibits government entities from collecting taxes from you, then using that money to lobby for ballot measures or tax increase initiatives. We discovered that Sound Transit, King County Metro and some other taxing authorities may have figured out a way around that.

With gas prices skyrocketing, Sound Transit thinks now is the time to float the idea of another $10 billion in new taxes to expand its routes.

Eagerly waiting to help them get that initiative to the ballot is a non-profit charity called the Transportation Choices Coalition. Its official mission: "support of increased public transit funding."

TCC spokesperson Shefali Ranganathan tells Halsne, “We do a lot of education and certainly we do advocacy or lobbying, as you could call it.”

According to TCC’s latest 990 tax form, it spent nearly $70,000 lobbying in 2006, with around $250,000 in lobby expenses since 2003.

This is where the use of your tax dollars becomes a little murky.

The Washington Policy Center says it found out that Sound Transit donated at least $156,000 to Transportation Choices in the past 10 years. That’s something we confirmed through Open Records.

WPC transportation director Mike Ennis says, “Even the most casual taxpayers can see the conflict of interest when you have a public agency giving money to an organization that lobbies on behalf of that organization. That's not what public money is intended for. It doesn't matter how noble the cause is for some of these groups.”

Again, using the Open Records Ace, KIRO Team 7 Investigators discovered Sound Transit is just one of at least 15 government agencies donating your tax money to Transportation Choices via something labeled “membership dues."

Sound Transit recently donated $22,000. King County Metro handed over $30,000. Other transit agencies donating to TCC via membership dues in 2008 include: Community Transit, Pierce Transit, Intercity Transit, Whatcom Transportation Authority, Ben Franklin/Richland Transit, Spokane Transit and Kitsap County Transit.

Other government agencies that contributed your tax dollars to TCC’s charity include the cities of Seattle, Kirkland, Redmond, Sammamish and Edmonds. The Port of Seattle donated as well.

This year, about half of the charities $360,000 budget came from government donations of your tax money.

Ranganathan defends the practice as money well spent.

“They (the government entities) recognized and believe in our mission and they feel it is a worthy contribution in terms of the work we're doing. That being said, I don't think there is a quid pro quo in terms of 'you give us this money and we'll get this done for you.'”

Transportation Choices also tells KIRO Team 7 Investigators it is very careful to not use money donated directly from tax coffers for lobbying. That might be considered illegal. Instead, it's used for "education," which includes some overhead costs, and staff salaries.

We called State Auditor Brian Sonntag and showed him the financial relationships we uncovered. He tells us he will open a formal inquiry.

Sonntag told Halsne during on on-camera interview, “They can't 'give' your tax money away. There has to be a benefit. My first general impression is that there are a lot of questions -- a lot of questions that need to be answered on behalf of citizens and tax payers. This is a lot of money.”

Washington law says that if your tax money is given to charity, there has to be a specific return, something of documented value given back. Lobbying can't legally be that value and, according to Sonntag the label "membership dues" isn't specific enough.

“Membership to what? That would be my first question. I mean, it is a club? An organization? What are your dues paying for? That's a question that citizens have a right to an answer.”

Sound Transit spokesperson Geoff Patrick says its donations to Transportation Choices are not only legal, but a beneficial use of transportation tax money.

“Our attorneys have looked at that and it’s also been a part of our past audits and the answer is: as long as they're doing, spending the money from our membership for public education in line with the kind of messages -- talking to the public about why they should get on buses and trains. It's completely appropriate.”

Patrick says Sound Transit welcomes the scrutiny of a potential state audit on this matter and predicts it financial associations with Transportation Choices will be vindicated.

“As long as they, we have to assume that on any lobbying that they do they keeping it on the straight and narrow as far as the reporting requirements that come into play and I haven't seen any indication they're anything wrong there.”

This year, King County Metro paid more to Transportation Choices than any other government agency.

Just two years ago, Transportation Choices admits it directly lobbied heavily for the Metro Transit Now initiative, a sales tax increase.

It's that kind of financial relationship between government and charity/lobbyist that makes critics (and the state auditor) a little nervous.

KIRO Team 7 Investigators analyzed Sound Transit's expenses from 2001 to present. We found the agency handed about $2 million in tax money to various charitable causes.