Testimony by Mike McCabe, Executive Director,
Wisconsin Democracy Campaign
Committee on the Judiciary, Consumer Affairs and Campaign Finance Reform,
July 2, 2002
Posted: July 3, 2002
I commend your efforts to shine light on growing political corruption in our state government. I represent the Wisconsin Democracy Campaign. Our work as a political watchdog is simple. I can sum it up in four words: Money talks. We eavesdrop.
The Democracy Campaign manages the state’s only searchable electronic database of campaign contributors. The political money we track talks. It tells a story - a story of corruption and influence peddling. We’ve called attention to literally hundreds of examples of huge campaign donations being made - at critical moments during the legislative process - to elected officials who were in a position to deliver valuable public policy benefits to the donors. Time and again we’ve seen the money flow in and the benefits flow out.
Last year we did a study of the return on investment special interest donors get for their campaign contributions. We evaluated more than four dozen policy proposals that affected special interests. We found that over a dozen special interests with a stake in these items realized an economic benefit that amounted to a 33,000% gain from the campaign contributions they made during the legislative session.
Nowhere is the impact of these "transactions" more noticeable than in the state budget process. The budget quite literally has been put up for sale to the highest bidder, and the auction is costing ordinary taxpayers a bundle. Our research shows lawmakers from both parties who had a hand in crafting the budget offered an array of tax breaks, pork barrel spending and other budget favors worth $819 million - at a cost of $211 for every Wisconsin taxpayer - to special interests who contributed more than $3 million to legislators and $2.8 million to the governor while budget decisions were being made.
This political graft is a major reason why Wisconsin has a billion dollar budget deficit. Not a single one of the special interest items we identified in the original budget has been removed in the budget repair bill and lawmakers even added an extra $49 million in special interest tax breaks. Lawmakers’ inability to say no to their big donors and consider cutting some of the pork they put in the original budget is a major reason why putting the state’s fiscal house back in order has proven so difficult.
Among the many items in the state budget is a special exemption allowing an Arcadia furniture maker to expand its plant on wetlands. Lawmakers overruled the Department of Natural Resources in inserting the exemption for Ashley Furniture into the original budget bill. The exemption was challenged in court and was ruled unconstitutional. Undeterred by the court ruling, legislators put a new version of the wetland exemption in the budget repair bill now being hammered out. Executives of Ashley Furniture gave $68,000 to legislative and gubernatorial campaigns, including $10,000 to Governor Scott McCallum a week after the court ruling. Despite the unseemly appearance, both the donors and the recipients of the campaign contributions insist there is no connection between the donations and the budget item. It’s all a coincidence.
It’s always a coincidence. There’s never a connection.
It was a coincidence when executives of a Fond du Lac construction company, C.D. Smith Construction, gave former Governor Tommy Thompson $37,000 in campaign donations within two weeks of the company getting a no-bid contract to build a $29.5 million prison from the State Building Commission, which Thompson chaired at the time.
Coincidence knows no partisan boundaries. It was a coincidence when gambling interests in New York City gave $5,000 in a single day to a key Senate Democrat who faced a tough re-election battle and Senate Democrats promptly reversed course and supported a change in state law they had previously opposed allowing private companies to buy out the annuities lottery winners receive for a cut of the winnings.
The recipient of the donations, then-Senator Alice Clausing, and individuals connected with the New York-based Peoples Lottery Foundation that benefited from the law change all said there was no connection. It was a coincidence.
It’s always a coincidence. There is never a connection.
More recently, we raised questions about government grants charitable groups received from Attorney General Jim Doyle. There was no request for proposals, so other charitable organizations were not given the opportunity to compete for the grants. The attorney general personally steered grants to particular groups and people connected to those groups made donations as large as $10,000 to his campaign for governor shortly before or just after the grants were announced. At least four of the donors had no previous history of contributions to Doyle or any other state candidate for that matter.
We said there was an appearance that government grants were being traded for campaign donations and called for an investigation. Doyle staffers insisted there is "absolutely no connection" between the grants and the campaign donations. Another coincidence.
It’s always a coincidence. There’s never a connection.
In a few short years, an amazing pattern of coincidences has transformed Wisconsin government. A flood of special interest money has washed away a political culture that made Wisconsin a special place - a state once known for squeaky clean politics.
In just the last year or so, over a half-dozen lobbyists have come to us and described in explicit detail the shakedowns they've experienced at the hands of legislative leaders. Some were threatened with a loss of access if their clients didn’t make the campaign donations leaders sought. Others were told in no uncertain terms that they would not get items they desired in the budget or favorable treatment of bills they support unless they made the campaign contributions leaders demanded. They all were told how much they had to give and to whom the donations should be given. Some call it coincidence - I call it extortion.
There have been rare public glimpses into this extortion. First, a memo from a prominent lobbyist to his clients was made public. In the memo, Quarles & Brady lobbyist Tony Driessen outlined demands he claims the Senate majority leader made in private meetings. Among other things, Driessen informed his clients that the majority leader would "not look favorably upon groups" that did not follow the rules for campaign giving spelled out in the meetings. The memo was dismissed as "Tony Driessen’s view of the world." Aides to the majority leader denied any connection between public policy making and campaign contributions.
We followed up the release of the Driessen memo with research showing donors dramatically changed their giving patterns to meet the demands Driessen said were made by the majority leader. It turns out Tony Driessen’s view of the world was right. The big donors followed orders with amazing precision. The meetings Driessen described coincided with the legislature’s work on the 2001-03 state budget that was loaded with dozens of breaks and benefits for special interests.
Then just last week, the public was given another glimpse into the way business is being conducted in the Capitol. The criminal complaint filed against Senator Brian Burke contains explicit descriptions of meetings in Senator Burke’s Capitol office. Eyewitnesses swear a Dental Association lobbyist meets with the senator to discuss increased funding for rural dental care. She leaves the meeting with a request for a $10,000 campaign donation and a promise of a helpful budget amendment.
Political corruption has been allowed to take root in Wisconsin, and we need to confront that reality head on. Perhaps as you confront this reality you will raise more questions than you answer. But this I know: Corruption is like the pupil of an eye - the more light you shine on it the more it shrinks. So let the light shine.