New Docs Undermine Walker Statements on Criminal Probe

Despite claims that Wisconsin Governor Scott Walker is not a "target" in the state's criminal campaign finance probe, newly-released documents demonstrate that prosecutors are indeed looking at potentially criminal activity by the first-term governor and 2016 presidential hopeful.

The latest round of documents released in Wisconsin's "John Doe" investigation shine new light on the stalled inquiry into alleged illegal coordination between Walker’s campaign and outside political groups like Wisconsin Club for Growth (WiCFG) during the 2011-2012 recall elections.

The documents show that Walker made personal appeals to out-of-state billionaires and millionaires to raise funds for WiCFG -- which spent $9.1 million on the recalls and acted as a "hub" for funneling millions more to other groups -- and evidence indicates that his campaign also worked with WiCFG on how those funds were spent.

The investigation was halted in May in a questionable decision by federal Judge Rudolph Randa -- a Republican appointee who regularly attends Koch- and Bradley-funded judicial junkets -- on grounds that the omission of terms like "vote for" or "vote against" in WiCFG's ads put them beyond the reach of long-standing Wisconsin law, including laws governing coordination. Prosecutors have appealed Randa's ruling to the Seventh Circuit, and some documents filed under seal with that appellate court were accidentally made public on August 22.

Here are three revelations from those documents that have gotten little attention.

1) Walker Himself Is Implicated in the Investigation

For months, Walker has hid behind a statement from John Doe prosecutor Francis Schmitz that the governor is not a "target" of the investigation.

"The prosecutors' attorney stated that Governor Walker is not a target" of the John Doe, Walker spokesman Alleigh Marre repeated last week rather than responding to questions about the probe.

Yet, as the Wisconsin State Journal has noted, whether Walker is a "target" of the investigation -- meaning that prosecutors have gathered enough evidence to file charges -- is a separate question from whether he is a "subject" under investigation for possible wrongdoing.

The latest documents indicate that prosecutors are indeed looking at potentially illegal conduct from Walker himself.

When the bipartisan judges on the Government Accountability Board unanimously approved the probe in 2013, they passed a resolution stating: "the investigation’s purpose is to learn if there is probable cause to believe that Governor Scott Walker, FOSW . . . Wisconsin Club for Growth . . . and other individuals, organizations, and corporations" violated Wisconsin campaign finance law.

Milwaukee County investigator Robert Stelter concluded in an affidavit mentioned in the document release that Walker sought to “circumvent” state disclosure laws by soliciting donations to WiCFG, which keeps its donors secret. The investigation “is about a candidate and his personal campaign committee failing to disclose the funding of such coordinated advocacy,” Stelter wrote, referring to Walker.

In another document, Stelter specifically identified Walker as part of the alleged criminal conspiracy. "During 2011 and 2012, R.J. Johnson, Governor Scott Walker, Keith Gilkes, and others, conspired to use WiCFG to coordinate political activity in response to recall elections against Wisconsin state senators, as well as Governor Walker."

"Contributions were personally solicited by Governor Scott Walker to WiCFG, a '501(c)(4)' organization in order to circumvent the reporting and contributions provisions" of Wisconsin law, Stelter wrote.

2) Walker Publicly Supported Disclosure, around the Same Time He Secretly Sought to Avoid It

In December 2012, a few months after surviving his recall election, Walker said that campaign finance disclosure was the best way to reduce the influence of money in politics.

“One of the biggest things is transparency,” Walker told the Wisconsin Center for Investigative Journalism. “The more transparency involved, the more people could hold folks accountable, for whether it’s $5 or $500, or whatever the amount may be.”

Yet as Dan Bice of the Milwaukee Journal Sentinel has noted, those comments came not long after Walker raised millions to benefit his reelection efforts with the express purpose of avoiding transparency.

"The Governor is encouraging all to invest in the Wisconsin Club for Growth," Walker fundraiser Kate Doner wrote in an April 2011 email to R.J. Johnson, a top advisor to both the Club and Walker's campaign. "Wisconsin Club for Growth can accept Corporate and Personal donations without limitations and no donors disclosure.”

An email a few months later from Walker campaign aide Kelly Rindfleisch gave the governor a set of talking points for use in meetings with donors.

“Stress that donations to WiCFG are not disclosed and can accept corporate donations without limits,” she wrote. “Let them know that you can accept corporate contributions and it is not reported.”

By coordinating with dark money groups like WiCFG that accept unlimited and secret donations, candidates can circumvent Wisconsin laws that limit the size of campaign contributions and require that those donations be disclosed.

Notably, thanks to a quirk in Wisconsin law, Walker and other candidates facing recall in 2012 were exempt from campaign contribution limits and could accept unlimited donations. Walker's campaign received 24 donations between $100,000 and $510,000 in advance of his June 2012 recall election, for example. But, those donations were still subject to disclosure laws.

Because Walker could accept unlimited contributions during the recalls, there was little reason to route money through WiCFG, other than to keep the public in the dark about the governor's true sources of support.

The problem with such secrecy is obvious. It means the public cannot, in Walker's words, "hold folks accountable" when their elected officials later give donors special treatment, since those donors are not publicly known.

This sentiment is supported in the preamble to Wisconsin's campaign finance statutes: "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."

The most obvious example of that "potential corrupting influence" came from a secret $700,000 donation to WiCFG from Gogebic Taconite, an out-of-state corporation that wanted to build a controversial open-pit iron ore mine in an environmentally sensitive region in northern Wisconsin.

After Walker won his 2012 recall election, his top legislative priority for the 2013 legislative session was to pass a mining bill drafted by Gogebic Taconite. During the hotly-contested debate over the proposed rewrite of Wisconsin's environmental laws -- a proposal met with protest from environmental groups, conservationists, and Native American tribes -- the public never knew that the same corporation that stood to profit from the law's passage had secretly funneled $700,000 into WiCFG, a number nearly 22 times the roughly $32,000 that Gogebic Taconite had disclosed in donations to Wisconsin candidates.

3) There Is Evidence of Coordinated Spending, Not Just Coordinated Fundraising

In the wake of the document release, the primary focus has been on the revelation that Walker personally solicited funds for WiCFG from billionaire hedge fund managers, mining corporations, and vulture capitalists with the promise that the donations "are not disclosed." One check to WiCFG, from billionaire commodities king Bruce Kovner, even notes in the memo line that its purpose was for "501c4-Walker." A set of fundraising talking points for Walker referred to WiCFG as "your 501c4."

Oddly, WiCFG director Eric O'Keefe asserted in court filings that "none of WCFG's ... donations related to Walker's campaign efforts."

Walker's allies have claimed that raising funds for an outside group is no big deal, although in April Walker called it "disturbing" when a state senator discussed fundraising for a Super PAC in a secretly-recorded conversation. WiCFG and its high-powered attorneys have drawn comparisons between Walker raising funds for WiCFG and President Obama soliciting funds for the "independent" Priorities USA Super PAC (which, in contrast with WiCFG, must disclose its donors).

"Everything we've done is completely legitimate," Walker said on August 23.

Yet, there is evidence that the Walker campaign not only coordinated fundraising with WiCFG, but also coordinated spending. Coordinated expenditures are counted as donations to the campaign and must comply with disclosure laws and contribution limits.

For purposes of campaign finance law, "coordination" is present if a communication is made at the request or suggestion of a campaign, or when, according to Wisconsin's elections board, "there has been substantial discussion or negotiation" over a communication's contents, timing, audience, or placement.

"Substantial discussion or negotiation is such that the candidate and the spender emerge as partners or joint venturers in the expressive expenditure, but the candidate and spender need not be equal partners," the board has advised.

The new documents indicate that prosecutors have at least a prima facie case that the Walker campaign coordinated with WiCFG and other groups on ad expenditures. The investigation was halted at a preliminary stage, and prosecutors are arguing that the probe should be allowed to carry on so they may continue gathering evidence.

In one email, Walker's fundraiser, Kate Doner, communicated the governor's view that the content of WiCFG's ads would be consistent with his campaign's messaging.

"As the Governor discussed ... he wants all the issue advocacy efforts run thru one group to ensure correct messaging," Doner wrote to Walker/WiCFG advisor RJ Johnson in an April 28, 2011 email.

Other evidence from prosecutors suggests that members of the Walker campaign and WiCFG worked together on approving the content of ads.

In a January 2012 email, media production company Nonbox sent a preliminary ad to Johnson, Deb Jordahl, and Keith Gilkes for review. Johnson worked for both WiCFG and the Walker campaign, but Jordahl worked only for WiCFG, and Gilkes was Walker's campaign manager. It is not clear from the documents whether the ad was to be aired by WiCFG, the Walker campaign, or another group -- but it seems clear that the Walker campaign and WiCFG worked as partners on developing and approving the message.

Prosecutors also uncovered evidence that Johnson approved and signed-off on the content of ads for both the Walker campaign and WiCFG, further indicating overlap between the campaign and WiCFG on ad expenditures.

WiCFG never ran ads explicitly supporting Walker, but it funneled money to groups that did, such as $2.5 million to Wisconsin Manufacturers & Commerce. (The Center for Media and Democracy uncovered this shell game last November). WiCFG's donations coincided with WMC's payments to an ad agency that produced ads supporting Walker and attacking his opponent.

Johnson also appears to have been involved with the expressly pro-Walker ads from WMC.

The firm that created the ads for WMC, the Virginia-based Ten Capitol Inc, paid Johnson $50,000 around the time WMC's ads were run, which prosecutors say was "consistent with a commission for ad placement."