Walker’s Laundry Operation: Six Takeaways from The Guardian Story on Walker

by Matthew Rothschild, Executive Director

September 16, 2016

An analysis of The Guardian's September 14 story on Governor Scott Walker and John Doe.

1. There no longer can be any question whatsoever that Scott Walker was intimately coordinating with conservative outside groups during the recalls in Wisconsin at a time when such coordination was illegal.

Here’s how it worked: Gov. Walker flew around the country to meet with multimillionaires and billionaires and steered them to write checks to Wisconsin Club for Growth, which then passed some funds on to groups like the Wisconsin Manufacturers and Commerce, Citizens for a Strong America, and the American Federation for Children. Walker’s campaign strategists, and sometimes Walker himself, went over the advertising these groups would then run with money they received from Wisconsin Club for Growth.

This laundry operation enabled donors to give unlimited amounts of money in secret. As Walker fundraiser Kate Doner wrote in an email on April 28, 2011: Walker “wants all the issue advocacy efforts to run thru one group to ensure correct messaging…The Governor is encouraging all to invest in the Wisconsin Club for Growth, and Wisconsin Club for Growth can accept corporate and personal donations without limitations and no disclosure.”

Conveniently, one person, R.J. Johnson, served both as Walker’s chief strategist and the leader of Wisconsin Club for Growth.

Some wealthy donors, like Donald Trump, made five-figure donations to Wisconsin Club for Growth the same day Walker met with them.

Governor Scott Walker
Governor Scott Walker

One donor, G. Frederick Kasten Jr., made his $10,000 check out to Wisconsin Club for Growth and put in the memo line: “Because Scott Walker asked.”

On August 11, 2011, Walker campaign manager Keith Gilkes wrote to Walker about thank you calls he should make, advising him to tell donors: “Our efforts were run by Wisconsin Club for Growth and operatives R. J. Johnson and Deb Jordahl, who coordinated spending through 12 different groups. Most spending by other groups was directly funded by grants from the Club.”

Walker himself in an e-mail dated August 30, 2011, wrote: “Did I send out thank you notes to all our c4 donors?” The designation “c4” stands for 501(c)(4), the IRS code for issue-advocacy nonprofit groups.

This hustle continued once the state senate recalls were over and Walker’s own recall was in play.

On March 20, 2012, for instance, one of Walker’s fundraisers sent him an email about an upcoming meeting with financier Carl Icahn: “This meeting is for WiCF funds,” the email said, referring to Wisconsin Club for Growth. And Walker was told to ask for $100,000.

As Walker raised money for Wisconsin Club for Growth, that group then lavishly funded the other groups that ran the ads that R.J. Johnson and sometimes Walker himself supervised or signed off on.

The Guardian documents show copies of four cancelled checks from Wisconsin Club for Growth to Wisconsin Manufacturers and Commerce in April and May of 2012 totaling $2.5 million. There were four checks from Wisconsin Club for Growth to Citizens for a Strong America in the first half of 2012 totaling $1,520,000. And there were two checks from Wisconsin Club for Growth to the American Federation for Children in May of 2012 for a total of $550,000. The documents also show the ads they ran.

2. Walker appears to have been fundraising on the public dime.

The governor spent a whole lot of time over an 18-month period as governor raising money to fend off recalls. Some of that time had to be occurring on the public dime. For instance, on Monday, Jan. 30, 2012, Susan Oergel of the Walker campaign sent Walker an email about his “political calendar” for the morning of Tuesday, Jan. 31. Here’s part of it:

8:30-9:00 John Luke, the chairman and CEO of MeadWestvaco Corporation

9:00 Herb Kohler, President, Kohler Co.

9:15 Glenn Werry, President, Star Transport

9:30 Peter Magowan, CEO San Francisco Giants

9:45 Carl Kuehne, Co-CEO American Foods Group.

Was he off the clock for all these calls and the other fundraising he was doing?

3. The involvement of the outside groups in this scheme raises legal questions for them, as well as Walker.

Were the nonprofit groups that were coordinating with Walker and his team stepping beyond their legal boundaries? If it was illegal for Walker to coordinate with them, was it also illegal for them to coordinate with him? Were they violating their tax-exempt status with these actions? According to the documents, the Republican State Leadership Committee, which was also working with the Walker team, swore an oath of non-cooperation with any candidate or candidate’s group. And the American Federation for Children Action Fund, in an Oct. 29, 2012, email to R. J. Johnson and Deb Jordahl, who were coordinating campaign ads for the network of groups, insisted on a disclaimer to their TV ad that said: “Not authorized by any candidate or candidate’s agent or committee.” It said it was “the sole source of this communication” and it “did not act in cooperation or consultation with, and in concert with, or at the request or suggestion of any candidate or any agent or authorized committee of a candidate who is supported or opposed by this communication.”

4. The direct contributions from corporations raises legal questions.

Some corporations gave directly out of their treasuries to Wisconsin Club for Growth. Larry Nichols, CEO of the Devon Energy company, met with Walker on April 17, 2012, and gave $50,000 to Wisconsin Club for Growth just a few days later. The Guardian document files show that this donation was on a company check.

And one of Harold Simmons’s companies, Contran Corporation, sent two checks to Wisconsin Club for Growth in 2011—one for $500,000 and the other for $100,000.

Other companies that gave money, on company checks, to Wisconsin Club for Growth include:

Schneider in Green Bay, which wrote one check for $40,000 and another for $25,000.

Hunt, which wrote one check for $125,000.

And Pilot Flying, which wrote a check for $10,000.

After Citizens United, corporations have been allowed to give to outside groups but not in coordination with a candidate.

5. Former Justice David Prosser was implicated in his own coordination.

On May 6, 2011, then-Justice Prosser wrote to his Waukesha County campaign coordinator, Paul Behling: “The coordination you provided with friendly organizations outside the Republican Party were absolutely indispensable.” On May 18, 2011, Behling had written an email to someone else in which he said: “I needed to get very creative with diverse state and national organizations to help his campaign.”

6. Pay to play appears to have occurred, with potentially ghoulish consequences.

As the Guardian story noted, Harold Simmons, the billionaire owner of NL Industries, a major producer of lead that was used in paint, donated $750,000 to the Wisconsin Club for Growth. He may have appreciated Walker and the Republican legislature for passing a law, almost as soon as they got into power, which “attempted to grant effective immunity to lead manufacturers from any compensation claims for lead paint poisoning.” As Walker was gearing up to raise money for his recall election, his campaign manager advised him to hit up Simmons. A month later, one of Simmons’s companies, Contran Corporation, sent a check for $100,000 to Wisconsin Club for Growth, and the following month, Simmons himself sent a check for $150,000 to Wisconsin Club for Growth. After these checks arrived, the Guardian reports, “Senate Republicans introduced a bill that would make the effective immunity for former lead paint manufacturers retroactive.” That effort didn’t succeed right away, but an NL Industries lobbyist did manage to sneak four words into a budget amendment that would have accomplished the same thing. That amendment passed, and Walker signed it, but a federal judge threw it out.

What the Guardian article didn’t mention was that the Republican legislature and Walker did pass three other laws, still on the books, that help the lead paint industry:

2013 Act 20 – Exempts lead paint manufacturers from future products liability lawsuits.

2015 Act 55 – Changes the definition of “lead-bearing paint” to allow greater amounts of lead in paint before the paint is legally considered lead paint. This law also forbids the state Department of Health Services from redefining lead paint in the future in order to conform to stricter guidelines issued by the federal Centers for Disease Control and Prevention.

2015 Act 122 – Reduces state lead paint inspection and testing requirements.

The NL Industries example is on a par with two other similar cases that had previously been made public: Walker got the Gogebic Taconite company to give $700,000 to the Wisconsin Club for Growth, and then the company’s lawyers got to rewrite part of the Wisconsin mining bill to their own liking; and Walker got John Menard of the Menards company to give $1,500,000 to Wisconsin Club for Growth, and afterwards, Menards was awarded up to $1.8 million in tax credits from the Wisconsin Economic Development Corp, which Walker was heading at the time, and Menards also benefited from lax enforcement from the Department of Natural Resources, a longtime nemesis.

This “I scratch your back, you scratch mine” approach to lawmaking is what led, in part, to the Caucus Scandal in Wisconsin in 2001, which brought down the legislative leaders of both parties.

The picture that emerges from the Guardian story is sleazier than almost anyone in Wisconsin, even Walker’s harshest critics, ever imagined.

No wonder Walker’s buddies on the Wisconsin Supreme Court never wanted these emails to see the light of day!

 
WDC Executive Director Matthew Rothschild
Matthew Rothschild
WDC Executive Director

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