A "Dark Money" Concession from Wisconsin Reporter

Wisconsin law does not mince words when it comes to disclosure of the sources of political spending.

"When the true source of support or extent of support is not fully disclosed, or when a candidate becomes overly dependent upon large private contributors, the democratic process is subjected to a potential corrupting influence," declares the preamble to Wisconsin's campaign finance statutes.

During the 2011 and 2012 recall elections, though, dozens of groups organized as tax-exempt "social welfare" nonprofits made a mockery of the goals of Wisconsin campaign finance law. Because dark money groups like Wisconsin Club for Growth ran TV and radio ads that did not explicitly call for the election or defeat of a candidate, they insisted their ads were about "issues" rather than elections, and therefore claimed they did not have to register as a political committee or report their donors. (See, for example, this one against Sandy Pasch or this one against Fred Clark). Any reasonable viewer understood these ads as an appeal to influence elections -- even without the ad explicitly saying "vote for" or "vote against" -- but were left in the dark about who was really behind the message.

These dark money issues have again taken center stage amidst news reports that a new "John Doe" investigation is underway in Wisconsin, with a special prosecutor reportedly examining possible campaign finance violations by Republican-aligned groups during the recall elections. Republicans and their supporters have swung into action, with the Wall Street Journal's editorial board attacking the probe as a "political speech raid" and sites like the Wisconsin Reporter trying to spin the investigation as "Wisconsin's secret war" and "an abuse of prosecutorial powers." (Wisconsin Reporter is a project of the Franklin Center, which is funded by Donors Trust, "the dark money ATM of the right" and a conduit for a plethora of right-wing funders with names like DeVos, Searle, Bradley, and Koch). This framing has been echoed in state newspapers, with the Milwaukee Journal Sentinel repeating claims that the investigation is about "free speech," when they are really referring to undisclosed six-and seven-figure donations and dark money election ads.

But this effort to "rough up the refs," as the Wisconsin Democracy Campaign's Mike McCabe has put it, has netted an interesting admission.

Trying to Elect a Conservative or Trying to "Educate the Public?"

CMD was recently the target of the Wisconsin Reporter's ire after we uncovered how the state chapter of Club for Growth was at the center of a tangled web of undisclosed dark money in 2011, raking in millions from out-of-state secret donors and shuffling it to other nonprofits that in turn spent millions on the 2011 and 2012 elections (all while telling the IRS that it didn't spend a penny on politics). Most of the nonprofits identified in CMD's report, "WI Club for Growth, Target of Walker Recall Probe, at Center of Dark Money Web," were groups that evaded reporting and disclosure laws because they insisted their multi-million-dollar ad buys during the recalls were about "issues" rather than elections.

Apparently, even Wisconsin Reporter recognizes that these groups were running a scam. Criticizing CMD's reporting, Wisconsin Reporter writes: "Any kind of cooperation among those groups to elect a conservative -- for example, Wisconsin Gov. Scott Walker -- is evidence of wrongdoing, CMD suggests in a rambling post on its website."

If the tax-exempt groups CMD identified in that "rambling post" had indeed owned up and acknowledged they were working "to elect a conservative," things might have been quite different: Wisconsin Club for Growth and groups that it funded would have been required to register as political committees with state election officials and would have been required to disclose donations made to fund those ads.

Such disclosure would have been in keeping with the purposes of Wisconsin's campaign finance system: "[to] make readily available to the voters complete information as to who is supporting or opposing which candidate or cause and to what extent, whether directly or indirectly."

Instead, because Wisconsin Club for Growth claimed that the approximately $9.7 million it spent on the 2011 and 2012 recall elections were about "issues" rather than elections, it did not report a single dollar in spending to the state elections board, nor did it report the sources of its funding.

Earlier this year, another dark money group similarly was exposed for its sham "issue ad" dark money charade. The school privatization group American Federation for Children told Wisconsin's elections board it spent only $345,000 on state legislative races in 2012, claiming that most of its spending was "issue advocacy" rather than "electioneering" and need not be disclosed. But it sang a different tune for funders. In a document titled "2012 Election Impact Report" AFC boasted to its funders that it spent $2.4 million in Wisconsin helping elect nine pro-privatization legislators to office. AFC was also named as having received a subpoena in the John Doe probe, according to the Wall Street Journal editorial board.

It is not known whether the John Doe prosecutors are going after undisclosed spending by dark money groups. By law, a John Doe is a secret inquiry, and little is known about the target of the investigation. But it is telling that even Wisconsin Reporter can see through the sham "issue ad" charade, and implicitly acknowledges that dark money groups like Wisconsin Club for Growth have violated the spirit of Wisconsin's clean election laws.