Decision Halting Walker Criminal Probe "Completely Unmoored"

A slew of election law experts and Wisconsin's elections board have filed briefs with the Seventh Circuit Court of Appeals sharply critiquing federal Judge Rudolph Randa’s decision halting Wisconsin's criminal campaign finance probe, describing the ruling as “erroneous,” and as “completely unmoored" from U.S. Supreme Court precedent.

On May 6, Judge Randa -- a George Bush appointee who is on the board of advisors to the Milwaukee Federalist Society -- halted the "John Doe" investigation into alleged illegal coordination between Wisconsin Governor Scott Walker’s campaign and outside political groups like Wisconsin Club for Growth (WiCFG) during the 2011-2012 recall elections. WiCFG spent $9.1 million during the recalls on electoral “issue ads” that stopped short of expressly telling viewers how to vote, and funneled millions more to other groups that also ran issue ads.

Judge Randa deemed that the omission of terms like "vote for" or "vote against" in ads from the groups under investigation put them beyond the reach of Wisconsin law. In doing so, Randa ignored years of precedent from both state courts and the state elections board that treated coordinated issue ad expenditures as campaign contributions. And, he distorted U.S. Supreme Court jurisprudence when he declared that “issue ad” coordination amounted to protected First Amendment activity.

Notably, Randa has regularly attended judicial junkets funded by the same interests backing the groups under investigation, such as the Koch and Bradley foundations, and some experts think he should have recused from the case.

Prosecutors have appealed Randa's decision to the Seventh Circuit.

In a friend-of-the-court brief filed with the Seventh Circuit on August 8, Wisconsin's Government Accountability Board (GAB) -- the agency responsible for the administration and enforcement of the state's campaign finance laws -- weighed in on the side of prosecutors, writing that Randa's decision “erroneously construed Wisconsin law and erroneously extended absolute First Amendment protection to coordinated issue advocacy.”

In a separate brief filed the same day, the Brennan Center for Justice at NYU Law School noted that “the reasoning articulated by [Judge Randa] is at odds with nearly forty years of Supreme Court precedent, and, if allowed to stand, would eviscerate state and federal contribution limitations that are an important bulwark against quid pro quo corruption in the electoral process.”

In yet another brief filed August 8, the Campaign Legal Center and Democracy 21 wrote that “it defies common sense and experience to assert that a coordinated advertising campaign that meets a candidate’s every specification and request is not a valuable 'contribution' to his campaign simply because it lacks words of express advocacy.”

"Judge Randa Enables Large-Scale Circumvention" of Campaign Finance Limits

The question in the case and in Judge Randa’s decision has hardly been one of whether coordination occurred. Randa brushed off the question, and the Walker campaign has not denied coordinating with WiCFG; in one email from 2011, Walker even wrote to Karl Rove boasting of the "wildly successful" coordination effort led by his top campaign advisor, R.J. Johnson, who was also in charge of WiCFG.

The issue is whether coordination over issue ads can be counted as contributions to a campaign (and in turn, whether the Walker campaign and outside groups violated the law by knowingly filing false campaign finance reports omitting millions of dollars of contributions).

So-called "issue" ads are common in political campaigns. Here is one from WiCFG during the 2011 senate recall campaigns, and here is one supporting Walker during his 2012 recall election from Wisconsin Manufacturers and Commerce, which received $2.5 million from WiCFG that year.

Few would see these ads as about anything but elections, but according to Judge Randa -- whose ruling tracked arguments from Walker and Wisconsin Club for Growth -- the absence of "express advocacy" in these messages puts them beyond the reach of Wisconsin campaign finance law.

“By adopting an express advocacy standard for coordinated spending, Judge Randa enables large-scale circumvention of the contribution limits, allowing precisely the type of quid pro quo corruption that the limits were designed to prevent," the Campaign Legal Center wrote.

Randa's "novel view of coordination would also undermine disclosure laws that aim to provide transparency in the spending of money for political campaigns," the Brennan Center noted.

If Walker or another candidate can coordinate with an independent group -- for example, by asking a donor for a secret, million-dollar donation to WiCFG, then telling the Club how to spend it -- than the candidate contribution and disclosure limits are rendered meaningless. A million-dollar donation to WiCFG would be effectively the same as a donation to Walker himself, and because the contribution would be secret, the public could never discern whether the donor later receives special treatment or has their policy agenda pushed into law.

GAB Ruling on Coordinated Issue Ads "Had the Force and Effect of Law"

As CMD has reported, since at least 1999, Wisconsin courts have interpreted Wisconsin election laws to count issue ads coordinated with candidates as in-kind campaign contributions. Any coordinated issue ad "contributions" that exceed donation limits and are omitted from campaign filings can be illegal.

Additionally, the GAB -- which under Wisconsin law is tasked with interpreting and applying the state's campaign finance statutes -- has long advised candidates and the public that coordinated issue ads may be construed as a contribution to the campaign, since they are of value to the campaign. (The same is true in federal elections, under federal law.) See this 2002 GAB advisory opinion, reaffirmed in 2008.

Notably, as the GAB describes in its brief, under Wisconsin law, the GAB's advisory opinion on coordinated issue ads "had the force and effect of law.”

Yet, the GAB points out, Judge Randa never noted in his decision that the agency tasked with interpreting and enforcing Wisconsin election law had advised against the precise conduct at issue in the case.

Randa "did not explain the basis for its conclusion that WCFG’s conduct was ‘not subject to the regulations or statutes the [prosecutors] seek to enforce,’" the GAB wrote. "In reaching that conclusion, the District Court did not acknowledge contrary and indistinguishable Wisconsin case law. Nor did it acknowledge the opinions of the GAB and its predecessor the State Election Board ... to the contrary.”

Randa "Repeatedly Rel[ies] on the Wrong Case Law"

Judge Randa not only deemed that Wisconsin statutes do not bar coordination between candidates and issue ad groups, but asserted that even if they did, the state laws would be unconstitutional.

"Only limited intrusions into the First Amendment are permitted to advance the government‘s narrow interest in preventing quid pro quo corruption and then only as it relates to express advocacy speech," not issue advocacy, Randa claimed.

Here, he went further off the rails, experts say, mixing up the long-standing constitutional distinction between contributions and expenditures.

The U.S. Supreme Court has long held that limits on direct contributions to candidates are subject to less scrutiny than regulation of fundraising and spending by independent groups, like PACs, that make expenditures to benefit a candidate.

Part of the theory behind the two-tiered assessment is that independent expenditures pose less risk of corruption than direct contributions. With coordination the expenditure becomes more "valuable" to the candidate, increasing the risk of corruption and becoming the in-kind equivalent of a campaign contribution.

Yet Judge Randa seemed to collapse this distinction, holding that cooperation between campaigns and "independent" groups is protected by the First Amendment, and making the questionable assertion that there is no risk of corruption since the candidate and spender already agree.

This runs afoul of decades of campaign finance jurisprudence, and leads Randa to pursue an incorrect analysis, experts say: he wrongly approaches the case under the strict "expenditure" analysis rather than viewing it with lesser scrutiny as a "contribution" case. And, he applies the "express advocacy" standard -- which the U.S. Supreme Court has only applied to independent expenditures -- to the in-kind contributions associated with coordinated issue ads.

"Judge Randa’s conflation of expenditure limits and contribution limits also causes him to repeatedly rely on the wrong case law, namely, on cases reviewing restrictions on independent spending," the Campaign Legal Center argued.

Additionally, because of the constitutional distinction between expenditures and campaign contributions, the 7th Circuit's recent decision striking down some Wisconsin campaign finance laws in Wisconsin Right to Life v. Barland has no bearing on the Walker-WiCFG case, according to the GAB, the Campaign Legal Center, and the Brennan Center. Each of the groups asserted that the Barland II case dealt entirely with expenditures made independently of a candidate, whereas the Walker-WiCFG case deals entirely with coordinated campaign contributions.

Decision "Simply Cannot Be Squared With the History" of Federal Campaign Finance Law

Randa held that issue ads can be "viewed only one way, and that is as protected First Amendment speech," adding, "Coordination does not add the threat of quid pro quo corruption that accompanies express advocacy speech."

On the contrary, federal interpretations “have swept far more broadly in the regulation of 'coordinated expenditures' than Randa’s opinion would allow, the Campaign Legal Center wrote. "Both the Supreme Court and lower courts have upheld this more expansive federal approach.”

The U.S. Supreme Court has never held that counting electoral issue ads as contributions is unconstitutional. In fact, in the 2003 McConnell decision the court explicitly upheld a provision of the McCain-Feingold Bipartisan Campaign Reform Act that treats issue ads coordinated with a candidate that air near federal elections (called "electioneering communications") as in-kind campaign contributions. In the 2001 Colorado II decision, the Court held that coordinated expenditures have the same “power to corrupt” as direct contributions.

Other federal courts have reached similar conclusions.

The D.C. District Court of Appeals upheld Federal Election Commission rules treating coordinated issue ads run near elections as in-kind contributions -- but rejected as too narrow rules issued in 2003 and 2008 that would have required express advocacy for ads run outside of the election period.

And, the D.C. District Court in 1999 rejected an assertion that coordinated expenditures must include express advocacy to be counted as a contribution. "Were this standard adopted, it would open the door to unrestricted corporate or union underwriting of numerous campaign-related communications that do not expressly advocate a candidate’s election or defeat," the D.C. court wrote. The Tenth Circuit in 1995 came to a similar conclusion.

"The claim that the regulation of coordinated spending can extend no further than “express advocacy” or its functional equivalent simply cannot be squared with the history of federal law or the judicial authority reviewing its evolution," the Campaign Legal Center noted.

Oral argument in the Seventh Circuit appeal is scheduled for September 9.

Read more of CMD's reporting on the John Doe campaign finance investigation here.