Scott Walker Says the Dark Money Probe Is 'Over,' but He's Wrong

"This is a case that has been resolved, not one but two judges have said is over," Walker claimed on Fox News the day after the bombshell release of documents alleging that the Wisconsin governor is at the center of a "criminal scheme" to illegally coordinate with dark money nonprofits. "In fact two judges, in both state and federal courts, have ruled that no laws were broken," he asserted the day of the release.

The case is not over, and his claims are not correct.

The federal judge who halted the state investigation, Rudolph Randa, wrote an opinion so detached from First Amendment precedent, Wisconsin law, and the facts of the case that many legal experts believe that it will be reversed by the Seventh Circuit appellate court reviewing it. (Plus, Randa's May 6 ruling was a preliminary ruling, not a final decision.) Other legal experts think Randa should not even be involved in the case, given that he is a regular attendee at "judicial junkets" funded by the Bradley and Koch foundations, which are closely tied to Walker and the group that filed the federal lawsuit, Wisconsin Club for Growth.

And, the state judge who Walker claims has "resolved" the case has done nothing of the sort. In January, the new judge assigned to oversee the John Doe investigation initially sided with the Walker campaign's reading of the law and quashed subpoenas that had been issued -- but he quickly stayed his own order. The judge asked an appellate court to resolve the plausible legal interpretations in this dispute between prosecutors and the Walker campaign over the scope of Wisconsin law.

Years of Wisconsin precedent and elections board advisory opinions have barred coordination between campaigns and independent groups, even if the ads run by the independent group don't explicitly tell viewers how to vote. Yet Walker and Wisconsin Club for Growth apparently ignored this precedent, and the Club filed suit when law enforcement actually tried to enforce the law.

Coordination Opens Door to Corruption and Undermines Limits on Donations

The bipartisan group of prosecutors leading the John Doe allege that the Walker campaign and legislative leaders violated Wisconsin donation limits and disclosure rules by coordinating with purportedly "independent" nonprofit groups. In particular, they allege that Walker worked with Wisconsin Club for Growth, which spent $9.1 million during Wisconsin's recall elections and acted as a hub for funneling millions more to other politically-active groups.

In one email, 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 Wisconsin Club for Growth.

The reason that coordination can be illegal under both Wisconsin and federal law -- and the reason why it is so concerning that the governor may be involved in the alleged coordination activities -- is because it allows politicians to evade laws designed to limit the influence of money in elections, and on the policies written by those elected.

Direct donations to candidates are capped (no more than $10,000 per individual or $43,128 per PAC to a gubernatorial candidate) and must be publicly disclosed. But in the wake of the U.S. Supreme Court's decision in Citizens United, many "independent" groups can accept unlimited donations and have avoided disclosure requirements.

If Walker or another candidate can coordinate with an independent group -- for example, by asking a donor for a secret, million-dollar donation to Wisconsin Club for Growth, then telling the Club how to spend it -- than the candidate contribution and disclosure limits are rendered meaningless. A million-dollar donation to Wisconsin Club for Growth 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.

It does not appear that Walker has denied that he or his campaign coordinated with Wisconsin Club for Growth. Instead, Walker and Wisconsin Club for Growth have argued that the laws against coordination don't apply if they only work together on electoral "issue ads" that stop short of expressly telling viewers how to vote.

These so-called "issue" ads are common in political campaigns; here is one from Wisconsin Club for Growth 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 the Club that year. Few would see these ads as about anything but elections, but according to Walker and Wisconsin Club for Growth, the absence of "express advocacy" in these messages puts them beyond the reach of Wisconsin campaign finance law.

Wisconsin courts and Wisconsin's elections board have long taken a different position, and prosecutors relied on that precedent when they launched their investigation.

Randa's Decision Threatens Clean Elections

In February, Wisconsin Club for Growth filed a federal lawsuit challenging the John Doe, and hit the jackpot when they were assigned Judge Randa, a George H.W. Bush appointee and a member of the Milwaukee Federalist Society's board of advisors. Randa not only claimed that issue ads are not covered by Wisconsin law, but that the coordination of fundraising and spending is actually protected free speech activity. He even said that evidence of coordination gathered by prosecutors must be destroyed.

Incredibly, in his May 6 ruling halting the probe, Randa celebrated the fact that coordination allowed the individuals and groups involved in the alleged "criminal scheme" to find a way around limits on money in politics. Wisconsin Club for Growth "found a way to circumvent campaign finance laws, and that circumvention should not and cannot be condemned or restricted," he wrote. "Instead, it should be recognized as promoting political speech, an activity that is ingrained in our culture." (Randa even went so far as to compare campaign finance limits to the "guillotine and the gulag.")

This position is not supported by U.S. Supreme Court precedent and, if upheld, could destroy those few limits that remain on money in elections.

If Randa’s ruling stands on appeal, "then the rules against coordination between a candidate and outside groups would go out the window in Wisconsin," notes Rick Hasen, professor of law and political science at UC-Irvine School of Law. "That would be license for big donors to give unlimited sums to groups that will do candidates’ bidding."

The Milwaukee Journal Sentinel editorial board, which endorsed Walker for governor in 2010 and again during the 2012 recall elections, similarly recognized the impact that Walker's position and Randa's ruling could have on representative government and the public's right to know.

"The end of a coordination ban would create a 'dark' system of campaign funding," the Journal Sentinel wrote. "Money raised for the campaign could be funneled into tax-exempt 'social welfare' groups that don't have to disclose their donors, meaning voters would have even less of a chance than they do today of weighing potential motivations. How can the public know who a politician is working for if voters can't tell who is paying for an election?"

"The entire election campaign could be conducted in secret," it noted.

The New York Times editorial board took a similar view.

"If the rules against coordination are lifted, wealthy donors will achieve their dream of donating unlimited millions directly to candidates."

There have been no criminal charges filed yet in the probe, but this may be due to the fact that those under investigation launched a legal and PR counter-attack as soon as subpoenas were issued in late October of 2013. Many of the groups leading this campaign have been funded by the Milwaukee-based Bradley Foundation, which is led by Walker's campaign chair, Michael Grebe.

Randa Has a Reputation

Hasen says "there's a good chance" the Seventh Circuit will overturn Randa's decision. The three judges on the Seventh Circuit panel reviewing Randa's May 6 ruling -- Frank Easterbrook, Diane Wood, and William Bauer -- have already halted Randa's extraordinary edict that the John Doe investigators destroy all evidence gathered in the probe.

Randa appears to have developed a reputation in the Seventh Circuit.

In 2007, the same panel reviewing Randa's John Doe ruling quickly reversed Randa's decision in another politically-charged Wisconsin case. That case involved the conviction of state purchasing supervisor Georgia Thompson, who then-U.S. Attorney Steven Biskupic, a Republican, wrongly accused of steering state travel contracts towards a firm linked to Wisconsin Governor Jim Doyle, a Democrat. Appellate Judge Diane Wood called the evidence that Randa relied on to convict Thompson "beyond thin."

Biskupic is now Walker's attorney, and his wife is Randa's legal assistant.

That wasn't the last time that the Seventh Circuit chided Randa.

In 2010, a Seventh Circuit panel that included Judge Wood reversed Randa's sentencing of a man of Mexican descent who had been accused of dealing drugs. During the sentencing hearing, Judge Randa went on a long and unrelated tirade about how "the southwest is being overwhelmed," lashed out at illegal immigration -- referring to "you people" or "those people" -- and according to the Seventh Circuit, "linked the drug trade to Mexico, then to Colombia and Venezuela, and then to Iranian terrorists through the person of Venezuelan President Hugo Chavez.” He rejected the accused's claim that he was a good family man, saying "even Adolf Hitler was admired by his family. Adolf Hitler loved his dog. Yet he killed six million jews."

Despite What Walker Says, Investigation Grounded in Wisconsin Law

Walker's other claims about the John Doe also don't hold water.

"This is nothing more than a partisan investigation with no basis in state law," Scott Walker tweeted after the document release.

Hardly.

The investigation has been led by both Republicans and Democrats, and it is grounded in years of Wisconsin Court of Appeals precedent and Wisconsin elections board advisory opinions. That precedent established that candidates cannot coordinate with "independent" groups, even if those groups stop short of telling viewers how to vote.

Five District Attorneys, both Republican and Democrat, agreed to lead the investigation in their counties, finding sufficient evidence of coordination, and finding that such coordination was prohibited by Wisconsin law. Wisconsin's bipartisan Government Accountability Board unanimously approved the investigation. Special Prosecutor Francis Schmitz -- who voted for Scott Walker in 2012, was on George W. Bush's shortlist for U.S. attorney, and served 29 years in the U.S. Army – has led the overall John Doe investigation into the Walker campaign and other groups.

There is a reason that this long list of Republican and Democratic law enforcement officials believed that Wisconsin law had been broken. Since at least 1999 Wisconsin election laws have been interpreted as barring the coordination Walker's campaign is accused of, even over electoral "issue ads."

In Coalition for Voter Participation v. Elections Board, the Wisconsin Court of Appeals expressly held that Wisconsin law can count issue ad "expenditures that are 'coordinated' with, or made 'in cooperation with or with the consent of a candidate'... as campaign contributions."

The appellate court rejected claims that Wisconsin law only covers communications that expressly advocate for the election or defeat of a candidate.

"If the mailing and the message were done in consultation with or coordinated with [a] campaign, the [content of the message] is immaterial," the state appellate court found.

The state elections board, 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 under Wisconsin law. See for example, this 2002 advisory opinion that was reaffirmed in 2008, just a few years before Walker and WCFG began coordinating around issue ads:

"[S]peech which does not expressly advocate the election or defeat of a clearly identified candidate may, nevertheless, be subject to campaign finance regulation," the elections board wrote.

Describing state and federal campaign finance precedent, the elections board (now the Government Accountability Board, or "GAB") wrote that courts will "merge express advocacy with issue advocacy if 'coordination' between the spender and the campaign is sufficient that the potential for a quid pro quo is immediate and apparent and, therefore, that the expenditure ought to be treated as a contribution."

It is difficult to believe that Walker, his campaign, and the groups they coordinated with (like Wisconsin Club for Growth) didn't know about the Coalition for Voter Participation precedent.

And, it is difficult to believe that Walker and his lawyers had not seen the GAB's advisory opinion on coordination, which was posted on its website.

If Walker was unsure about his responsibilities under the law -- despite this publicly-available information -- his campaign could have requested an advisory opinion from the GAB. His campaign apparently asked the GAB for an opinion in February on whether campaign funds could be used for his legal defense.

Yet instead, Walker, Wisconsin Club for Growth, (and perhaps even Karl Rove) apparently went ahead and coordinated, and then claimed that the state's enforcement of these well-defined rules amounted to a violation of their free speech rights.

Still, Walker insists to Fox News, "there is nothing wrong with what we did."

See more of the Center for Media and Democracy's reporting on the John Doe campaign finance probe here.