The Koch Connection in the Scott Walker John Doe Documents

By Lisa Graves and Mary Bottari

A cache of documents recently released by The Guardian shed new light on how Governor Scott Walker, his top advisors, and allies evaded the state's campaign finance system in an unprecedented effort to win 15 elections and maintain control of the Wisconsin Senate and Supreme Court as well as the Executive Mansion in the tumultuous recall period of 2011 and 2012.

The Guardian documents also illuminate the activities of Americans for Prosperity (AFP), the shadowy "grassroots" arm of the Koch political machine.

In February 2012, David Koch told the Palm Beach Post "we've spent a lot of money in Wisconsin. We are going to spend a lot more."

In June 2012, Tim Phillips, the national head of AFP, told CNN that the group had pumped some $10 million in Wisconsin, but the independent watchdog group, the Wisconsin Democracy Campaign, could only account for a few million, which AFP spent on "It's Working!" ads developed with the McIver Institute that year.

The newly released documents help to explain the discrepancy. They paint a picture of AFP as a key partner along with the Republican Governors Association in maintaining GOP electoral control of the state in 2011-2012. In doing so, Walker and the groups engaged in unprecedented activities that so stretched the bounds of legality that a bipartisan group of state District Attorney's launched a criminal investigation known as a "John Doe" investigation under Wisconsin law.

Support for Walker's Union-Busting Act 10 Bill

The Center for Media and Democracy (CMD) has taken a closer look at the Koch related emails in the Guardian cache.

Emails in February-March 2011 show that Scott Walker's campaign guru R.J. Johnson and AFP Wisconsin State Director Matt Seaholm coordinated over the message, content, and placement of radio and TV ads after Walker's Act 10 bill, ending the state's 50-year tradition of collective bargaining, was introduced quickly sparking mass protest.

"Do you think this is the right message and delivery? We don't want something to go up that might hurt walker [sic] by missing the mark," Seaholm wrote to Johnson March 7, 2011.

Seaholm was in contact with national Koch operatives Tim Phillips, the head of AFP nationally, and Sean Noble, the head of the shadowy national organization called the Center to Protect Patient Rights, as well as AFP's Lorri Pickens and John Connors, who had intermittently worked for AFP and other right-wing groups in the state.

Emails also show R.J. Johnson, his business associate Deborah Jordahl, Stephan Thomson the executive director of the Republican Party of Wisconsin, and Seaholm, Pickens, and Connors working together to bus people into Madison for the hearing on Walker's collective bargaining bill and for a rally in Madison.

Johnson and Jordahl were unhappy about AFP ads supporting moderate Republican Senator Dale Schultz, who opposed the collective bargaining bill. "WTF?" asked Johnson. Pickens explained the screw-up by saying that AFP's national director, Tim Phillips, "wanted to do ads to help and show AFP presence and apparently talked to someone in Walker's office."

When such groups coordinate over budget ads and a pending vote on the budget bill, they are engaged in "issue advocacy" permissible under the tax code and Wisconsin campaign finance law, but when they run phony issue ads and engage in electioneering in advance of an election, such actions raise reasonable concerns about potentially illegal campaign coordination circumventing state campaign limits and disclosure laws and IRS rules about the appropriate activities of tax-exempt "charitable organizations."

Holding the Supreme Court to Ensure the Success of the Walker Agenda

On March 2, 2011, AFP's Seaholm sent a memo and budget to AFP national leader, Phillips. The highly partisan analysis runs down the races from the upcoming recall elections and state Supreme Court race, to Congressional elections (Paul Ryan, Herb Kohl), to the presidential, and strategizes on how they can all be kept in the Republican column.

"1) Supreme Court - Right now there is 4-3 conservative majority on the Court. Justice David Prosser is up for reelection on April 5th. While he did very well in the primary (55%), there will now be a renewed fight for the spot because unions know that if they take their fight to the current court, they will lose. If they take it to a court with Joanne Kloppenberg, a liberal, on it, they will win. This could stop everything that Walker is trying to accomplish and they know it. Goes without saying, that would be a bad thing," wrote Seaholm.

He listed races he thought AFP could influence. "A typical targeted Assembly seat will have a budget of $100,000-125,000. Again, outside influence can go a very long way. This seat is in the La Crosse media market, which has per point cost of roughly $25-30."

"Despite all of the attention that is currently on Madison, we have one of the brightest and strongest conservative minds in America in Paul Ryan. A poll just released today shows him with an approval rating at 38 percent in his district. While he is doing the heavy lifting for our cause in Washington, we can't let him slip back home."

"And one more thing ... Wisconsin's 8 electoral votes could actually go for a Republican. While Obama won handily, Gore and Kerry won by roughly 1%. Now you have a Republican Gov, a Republican Senator, Republican Legislature ... this state is at worst, a purple state and at best, slightly red. The Republican candidate for president will have to make inroads in the midwest to win. With all of the focus on Wisconsin, why not put the resources into this state and kill two birds with one stone," Seaholm stated.

On March 14, another email shows Sean Noble, from the Center to Protect Patient Rights in Arizona, prepping a "WI Budget" for AFP's involvement in the state Supreme Court race. The budget would include: polling to test messaging, voter ID by volunteers, and two pieces of mail to "AFP activities/modeled activists." In addition "Non_AFP activities" are listed and budgeted including "Voter ID to 2010 GOTV pool $20,000, Voter ID to remaining AFP modeled activists $50,000, Voter ID to swing universe $22,000, $22,000 Express."

"Total for State Supreme Court plan $350,000" is the bottom line, Noble writes to Phillips, the head of AFP. This email seems to put Noble in the drivers seat when it comes to AFP spending.

Seaholm forwarded this budget to R.J. Johnson saying: "this is what Sean pitched to the powers that be."

The same day Seaholm asked Johnson: "OK does anyone have oppo on kloppenburg?," and R.J. Johnson replied, "Yes. I know what we need to do there. Can we collaborate on message? Really important."

Later emails from March 25 have Johnson urging Seaholm to move on his court radio ad buys, and Seaholm responding "we'll be moving on the buys this morning."

On March 29, Seaholm told Johnson that he ran into problems over the ad buy with legal counsel and an angry Johnson responding "Jesus Matt I never got a call from you or an email." "This is a pretty big development to leave an office line if that is where you called. I left talk open for you with an assurance the job was done."

The Washington Post describes CPPR as part of a "political network spearheaded by conservative billionaires Charles and David Koch." Sean Noble was described by ProPublica as Kochs' "dark money man." In Wisconsin, this money was very dark indeed.

All this activity in a very close Wisconsin Supreme Court race, that was eventually won only after a costly recount, yet the Wisconsin Democracy Campaign, which closely tracks money in politics, does not even have AFP listed as a group spending money in the race.

It is unclear how much AFP spent in the state, they did do mailers like this one attacking Kloppenberg. If $350,000 were spent, that would be a substantial sum given that Prosser himself raised only about $59,000 for that race along with public financing.

Marcus S. Owens, the former director of the IRS Exempt Organizations Division spoke to CMD about the emails: "This is pretty specific information about individuals coordinating a campaign intervention. You would not expect to see a 501(c)(3) charity engaging in this. If it was acting as a 501(c)(4), it goes into the column of inappropriate (c)(4) activity, and if it rises to the primary activity of the organization it jeopardizes that organization's tax exempt status."

Winning the Walker Recall

An early email from Republican Governors Association's Nick Ayers laid out the coordinated strategy for the recall races to Scott Walker in March 25, 2011.

"Spoke to Gillespie this morning. My sense is that everyone's heart (AFP, WIGOP, RSLC, RGA, CFG) is in the right place but no one is clear on the entire battle plan, and that is leaving very vulnerable gaps in both the planning and execution of a winning strategy."

Here Ayers names key groups involved in the campaign coordination prosecutors were investigating; Ed Gillespie from the Republican State Leadership Conference, Americans for Prosperity, the Wisconsin Republican Party, and Club for Growth. The groups would go on to spend some $30 million in the recall races ($20 million funneled through Wisconsin Club for Growth, $10 million via the RGA) an enormous sum in a small state. RGA registered as an "independent expenditure" group (Right Direction Wisconsin) and swore an oath not to coordinate with candidates or their agents.

Multiple emails suggest that RGA, a partisan political organization, and AFP worked closely on recalls. One email from Walker fundraiser Kate Doner in August 2011, puts the AFP spending to that point at $1 million. On September 7, 2011, Doner will list AFP/Koch as a key partner and urge Governor Walker to "lock them down and make them work for you."

After the April Wisconsin Supreme Court race on May 11, 2011, Seaholm wrote to R.J. Johnson, subject: "Conf Call later this afternoon," asking if Johnson is available to have a call "to see what Sean Noble's guys are thinking?" Johnson replied, "Depending on time, yes."

At the time, Noble's Center to Protect Patient Rights and the related Coalition to Protect Patient Rights were focused on battling President Obama's 2010 health care reform bill funneling money to a host of groups, all pretending to be genuine grassroots voices on the issue.

The email doesn't reveal what "Noble's guys" were thinking but, in the final two weeks of the gubernatorial recall election in June of 2012, a brand new group with the name "Coalition for American Values" suddenly appeared out of nowhere to run $400,080 on a pounding rotation of express advocacy ads (the "vote for" "vote against" kind) appealing to "Wisconsin nice" by saying the recall wasn't "the Wisconsin way."

"I didn't vote for Governor Walker, but I am definitely against this recall…Recall isn't the Wisconsin way… Vote for Scott Walker, June 5."

Years later, sleuthing by CMD through public records revealed that these powerful ads with pretty B-roll of farms and fishermen didn't come from Wisconsin at all, but an out-of-state group tied to two of the most powerful billionaires on the planet, David and Charles Koch.

CMD filed a complaint with the state elections board in 2014, after it discovered that Coalition for American Values was funded entirely by Noble's multi-million dollar CPPR operation, which itself was funded by other Koch-connected entities.

In California during the same time period, CPPR was investigated by the state's Attorney General Kamila Harris for campaign money laundering. In 2013, it and related groups paid stiff fines and were ordered to disgorge $15 million as part of a settlement with the state. Though CPPR was given the largest fine in California electoral history, both Noble and the Kochs denied any wrongdoing for engaging in the complex shell game that prevented voters from knowing who was really behind the big ad buys in that state.

In Wisconsin, CPPR's phony front group (Coalition for American Values) was registered as an independent expenditure committee running express advocacy ads. Even under Wisconsin's 2015 Supreme Court decision shutting down the John Doe, coordination between CPPR and Wisconsin candidates or their agents would be barred.

In addition, Coalition for American Values like Wisconsin Club for Growth told the IRS that it had not engaged in "direct or indirect" political campaign activities--even though both groups appear to have spent almost the entirety of their funds on electioneering in 2012 in violation of IRS policy.

It is notable that the suspect ads were later pulled down leaving blank spaces in CMD's article about the complaint. But one ad survived the purge on the invaluable website Wispolitics and is reproduced here.

CMD noted that the Coalition for American Values Action Fund, registered at the federal level, paid Wisconsin political operative John Connors' firm Campaign Now a total of $44,724 in January, July, and August 2012, according to April/October 2012FEC filings.

Connors' biography includes interning for Scott Walker, working for AFP Wisconsin, and working for the "Franklin Center for Government and Public Integrity"/Wisconsin Watchdog, which appeared to have great inside sources on the John Doe investigation as it relentlessly attacked prosecutors with more than 350 articles.

But most importantly, Wisconsin Club for Growth's R.J. Johnson had used John Connors as the titular head of the shell organizations he set up in the state to engage in electioneering, Citizens for Strong America and United Sportsmen. New documents indicate that Johnson was paying Connors for his services in 2011.

AFP's efforts in Wisconsin were lauded in 2014 by Republican Governors Association Executive Director Phil Cox, in audio obtained by Lauren Windsor of the Undercurrent. Cox told a gathering of right-wing donors that Americans for Prosperity was a "tremendous partner" and "heavily involved" in the recall elections.

Together, two of the key organizations under investigation, Wisconsin Club for Growth and RGA would spend an estimated $30 million in the recall period of 2011-2012.

For almost 40 years, Wisconsin campaign finance statutes read:

"When the true source of support or the 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 legislature therefore finds that the state has a compelling interest in designing a system for fully disclosing contributions and disbursements made on behalf of every candidate for public office and in placing reasonable limitation on such activities. Such a system must 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."

One wonders what the results would have been in Wisconsin had the true sources of the campaign cash been revealed at the bottom of every ad.

See CMD's complaint against the Koch backed Coalition for American Values here. See CMD's analysis of many of the ads run in the recall period. Follow CMD's reporting and analysis of the Guardian documents @PRwatch.org.