The Wisconsin Supreme Court has single-handedly rewritten the state’s limits on money in politics, rendering the state’s disclosure laws and contribution limits meaningless, and opening the door to unlimited funds directly from corporations and foreign firms.
In a 4-2 decision that broke along ideological lines, the Court's conservative majority ended the John Doe probe into whether Governor Scott Walker illegally coordinated with supposedly "independent" dark money groups during the recall elections. The Court declared that any coordination that did occur didn't violate the law, since it only involved so-called "issue ads" that stopped short of expressly saying "vote for" or "vote against" a candidate.
In doing so, the Court's majority overturned years of precedent and practice in Wisconsin, issuing a decision that might be used to strike down campaign finance laws across the country. Previously, a former Wisconsin Supreme Court justice's campaign was fined $60,000 for engaging in the same type of issue ad coordination as Walker.
Justice Shirley Abrahamson, writing in dissent, called the majority's decision "an unprecedented and faulty interpretation of Wisconsin's campaign finance law and of the First Amendment." Justice Patrick Crooks' dissent warned that the majority's decision "will profoundly affect the integrity of our electoral process."
Besides handing Walker a political victory just days after he announced his presidential run, the ruling eviscerates in Wisconsin campaign finance law--and could threaten similar limits around the country. Here are five things to know about the decision.
1) The ruling guts Wisconsin campaign finance law
Thanks to the court’s ruling, candidates from both parties can now work hand-in-glove with “independent” groups that take unlimited, secret donations, as long as they only coordinate over "issue ads." This renders Wisconsin's post-Watergate contribution limits and disclosure requirements that apply to candidates meaningless.
"If campaigns tell potential contributors to divert money to nominally independent groups that have agreed to do the campaigns' bidding, these contribution limits become porous, and the requirement that politicians' campaign committees disclose the donors and amounts become useless," Judge Abrahamson wrote in dissent, quoting federal appellate Judge Frank Easterbrook, a Reagan appointee.
Now, there is nothing stopping a candidate, Democrat or Republican, from forming a nonprofit, having it operate out of their campaign offices, and asking billionaires and corporations from around the company (or overseas) to contribute million-dollar checks, without any public disclosure.
Donors who max out on their contributions directly to campaigns (currently limited to $10,000 per gubernatorial candidate) will have a new conduit for giving money, with the full knowledge of the candidate, but no disclosure to the public. Special interests seeking political favors — but not public scrutiny — can curry favor with candidates without questions from the media.
This is precisely the conduct that Walker engaged in, and that the Court’s majority said was perfectly acceptable.
According to evidence made public in the probe, Walker secretly raised millions for Wisconsin Club for Growth during the recalls with the express purpose of bypassing campaign finance disclosure laws. Walker’s staff advised the governor to "stress that donations to WiCFG are not disclosed," and to tell donors "that you can accept corporate contributions and it is not reported" and to call WiCFG “your 501c4.”
Some secret donors later received special treatment from the Walker administration, such as the mining company CEO that donated $700,000 and saw Walker prioritize a mining bill, and the chain hardware store owner who gave $1.5 million and received $1.8 million in tax credits from Walker’s jobs agency.
2) Corporate money and foreign funds can now flow into Wisconsin politics
For years, Wisconsin has banned corporations from donating to campaigns.
Yet the majority’s opinion just opened a giant loophole. Because the court held that “issue advocacy” is entirely beyond the reach of Wisconsin campaign finance law, foreigners, corporations—and foreign corporations—can now spend on Wisconsin elections, as long as they bankroll groups whose ads stop short of saying “vote for” or “vote against.”
And the public will have no idea this is happening, because their donations won’t be publicly disclosed.
A Swiss company looking to buy Wisconsin farmland can write a $1 million check to a nonprofit “issue ad” group like Wisconsin Club for Growth working directly with a candidate. A candidate can even ask the Swiss company for the contribution to the nonprofit—which the candidate can call “his 501c4,” and promise that there will be “no donor disclosure”—and it will all be perfectly legal, thanks to the Court’s decision.
Koch Industries, one of the largest privately-held companies in the country, could cut a check directly from the corporate treasury at a candidate's request, and the public would have no way of knowing.
"It defies common sense that a Wisconsin resident of average means who gives $25 to a campaign has his or her name publicly reported under the law but, according to this decision, someone who gives, for example, $100,000 to a group which closely coordinates with the same campaign can remain anonymous," said Francis Schmitz, the Special Prosecutor with Repubican credentials who led the investigation (and also voted for Walker). "The United States Supreme Court has fittingly characterized such donations as 'disguised contributions' to the candidate."
3) The ruling applies to the justices themselves
The decision green-lighting issue ad coordination doesn’t only apply to gubernatorial candidates. It applies to the justices themselves.
Wisconsin Supreme Court elections have become increasingly expensive affairs in recent years, with millions spent by outside groups supporting candidates on both sides.
Among the biggest spenders on Wisconsin Supreme Court elections have been Wisconsin Club for Growth and Wisconsin Manufacturers and Commerce, which are the same groups that allegedly coordinated with Walker and brought the challenge to these coordination rules. Together, these two groups spent $10 million on “issue ads” helping elect the court’s four-justice conservative majority.
Now that “issue ad” coordination is permissible, the justices can work directly with the same groups that were parties to this case.
Plus, under Wisconsin rules, justices cannot personally solicit donations to their campaigns. The U.S. Supreme Court recently upheld a challenge to judicial solicitation bans, with Chief Justice John Roberts declaring that "Judges, charged with exercising strict neutrality and independence, cannot supplicate campaign donors without diminishing public confidence in judicial integrity."
Yet, under the Wisconsin Supreme Court's ruling, justices can now solicit secret donations directly to an issue ad group like Wisconsin Manufacturers and Commerce, and work directly with that group, without violating Wisconsin law. A justice could even ask a party with a case pending before the Court to donate to an affiliated nonprofit group. After all, "issue ads" don't implicate Wisconsin campaign finance law whatsoever, under the Court's decision.
4) Two justices faced serious conflicts-of-interest and didn't recuse
Ultimately, the Court’s decision is not surprising. WiCFG and WMC are among the biggest spenders on Wisconsin Supreme Court elections and spent $10 million to elect the court’s four-justice conservative majority, in most cases outspending the justices themselves.
The two justices who benefited the most from this largesse, Justices Michael Gableman and David Prosser, were the two justices in the case who were specifically asked to recuse. In court filings, Walker’s lawyer also argued against Schmitz’ recusal motion.
According to CMD's analysis, WiCFG, WMC, and their offshoots spent $3,685,000 supporting Justice David Prosser in his 2011 race, five times as much as the Prosser campaign, in an election decided by just 7,000 votes.
WMC spent five-and-a-half times as much supporting Justice Michael Gableman as Gableman's own campaign in 2008, in a race he won by 20,000 votes, and WiCFG also surpassed Gableman's campaign spending.
If it weren't for WMC and WiCFG spending a combined $3.7 million on Prosser's race, and $2.75 million on Gableman's race, the two likely wouldn't be on the bench. Their failure to recuse raises questions of constitutional Due Process under the U.S. Supreme Court’s 2009 decision in Caperton v. Massey, and it could be grounds for an appeal to the U.S. Supreme Court.
“This ruling raises grave concerns about the fairness and impartiality of the court in this case,” said Matt Menendez, counsel at the Brennan Center for Justice. “Based on publicly-available information, it is extraordinary that the Wisconsin Supreme Court refused to explain how several of the justices could, ethically and constitutionally, even rule on this case.”
If the justices had recused, the decision would have been a 2-2 tie. Justice Ann Walsh Bradley was the only justice to recuse, and she did so because her son worked with one of the attorneys involved in the case.
5) Justices jumped right into the right-wing echo chamber
The legal issues before the Court involved the scope of Wisconsin campaign finance law and procedural issues surrounding the John Doe. Although right-wing media outlets have hyperventilated for months about the "paramilitary style raids" allegedly used in the investigation, WiCFG director Eric O'Keefe and others that have filed a barrage of lawsuits against the investigation never challenged the methods used in executing the search warrants.
Former prosecutors and law enforcement professionals have said that the methods used were not abnormal for investigating white-collar crime.
Yet the Wisconsin Supreme Court's right-wing justices couldn't help but repeat inflated claims made by right-wing media outlets. Justice Gableman denounced the "pre-dawn, armed, paramilitary-style raids in which bright floodlights were used to illuminate the targets' homes." Justice Annette Ziegler devoted her entire concurrence to opining about the constitutionality of the alleged tactics used in executing search warrants, even though the Court never conducted any factual findings about the matter and never held oral arguments where the issue might have been addressed.
"I was denied the opportunity to appropriately respond to the campaign of misinformation about how and why the investigation was conducted," Schmitz said in a statement. "All of these search warrants were audio-recorded and it is wrong for the court to accept as true the information alleged by some of the Unnamed Movants and their media outlets."
In the absence of a genuine factual record, Ziegler and Gableman instead relied on highly-conflicted right-wing news outlets for their "facts."
Perhaps the most extraordinary example was the Court's multiple citations to the Franklin Center for Government and Public Integrity’s “Wisconsin Watchdog” website. That outlet has produced 222 stories attacking the John Doe but without routinely disclosing that it was launched and funded by Eric O'Keefe, WiCFG’s director and the chief plaintiff in the lawsuits challenging the probe. Franklin Center's president Jason Stverak used to work for O'Keefe. Its Director of Special Projects, John Connors, is also president of Citizens for a Strong America, another group involved in the investigation and which is funded entirely by WiCFG.
Additionally, Franklin Center/Wisconsin Watchdog's funding has come in large part from the Bradley Foundation, which is led by Walker campaign chair Michael Grebe. The Court also cited a sensational National Review article on the John Doe "raids" by David French, the past president of the Foundation on Individual Rights in Education (FIRE), which received more than $1.3 million from the Bradley Foundation since 1999.
Dawn of a New Era of Secrecy
In the end, the biggest impact of this decision won’t be on Scott Walker. He is not likely to run for office again in Wisconsin. Instead, the decision undermines the state's long traditions of clean, open, and ethical government, and its true impact will be felt by Wisconsin residents whose elected officials will grow increasingly dependent on secret cash.
Justice Gableman ordered the immediate return of all computers and other property gathered by prosecutors, and to permanently destroy all evidence gathered in the probe, an order that can only be stayed if prosecutors appeal to the U.S. Supreme Court. Given ongoing disputes over what really happened in the John Doe, Governor Walker could shine some light on the issue by calling for the release of sealed documents, but has yet to do so.
O'Keefe is planning to launch more attacks on prosecutors. Republicans in the legislature are planning to dismantle the Government Accountability Board, the nonpartisan elections agency regarded nationally as a model for other states, but which had the gall to support the John Doe investigation.