Donors, Ex-Governor Face Nearly $317,000 in Fines

State Elections Board to act tomorrow on WDC complaints alleging illegal campaign contributions

July 29, 2003

Madison - Wealthy donors and a former governor accused of violating state campaign finance laws that limit to $10,000 the total amount of campaign contributions an individual can give in a year or a gubernatorial candidate can accept face fines totaling nearly $317,000 when the state Elections Board meets Wednesday. (Actual fines levied.)

The list of accused violators, many of whom substantially exceeded the $10,000 contribution limit in 2002, is dominated by owners, executives and employees of corporations that are among the state’s most generous special interest campaign contributors including the construction industry, the legal profession and road builders (Table).

The calculation of the fines was based on penalties provided in state campaign finance laws which allow the board to levy civil fines of up to $500 per violation plus triple the amount of the illegal portion of the contribution. The Elections Board also can pursue criminal penalties of up to six months in prison if it determines a violation was intentional.

WDC filed 43 complaints in May after the board refused to take any action against donors publicly identified by the Democracy Campaign who exceeded the $10,000 contribution limit in 2000 and 2001. The number of violations identified by WDC for 2002 represents a six-fold increase over the number in 2000 and double the number in 2001.

The board is comprised of political appointees chosen by the Democratic and Republican leaders in the Legislature, the governor, Supreme Court chief justice and the state Democratic, Republican and Libertarian parties, most of whom benefited from large individual donations made by the accused violators during the election year.

In response to the WDC complaints, many of the accused violators invoked the state’s marital property law and claimed half of their total contributions should be attributed to their spouses since the contributions were made from a joint checking account, even though they were reported as individual donations by the recipients. This claim runs contrary to a state appeals court ruling and the Elections Board’s own policy. The 1999 Wisconsin Court of Appeals decision in Katzman v. State Ethics Board held that campaign contributions made from joint accounts are made by an individual - not a couple - from his or her portion of those shared funds. Elections Board policy states that the way a campaign donation is characterized on the campaign finance report determines how the money is assigned for the purpose of determining whether a violation of the annual contribution limit has occurred, "with no exceptions."

About a quarter of the accused violators admitted to exceeding the contribution limit but asked that the complaint be dismissed because they were not aware of the law. In formal responses filed with the Elections Board, WDC argued that ignorance of the law has never been an acceptable defense for breaking the law.

A handful of the accused violators simply admitted they violated the limit and asked the Elections Board for lenience.

"The violations are clear cut. Some of the donors have fessed up, some are pleading ignorance, and some are blaming their spouses," WDC executive director Mike McCabe said. "To let them off the hook, the Elections Board will have to overlook its own policy, ignore a state appeals court ruling and stretch the definition of 'benefit of the doubt' past the breaking point."

McCabe added: "There are a growing number of illegal campaign contributions in Wisconsin because the Elections Board has failed to enforce the law in the past. The board’s track record of inaction sends a message that you don’t have to obey the law because nothing will happen to you if you don’t."

In addition to the contributors, WDC also filed a complaint against former Republican Governor Scott McCallum whose campaign received $11,000 worth of contributions from Carol Hanson of Delafield. Campaign finance laws prohibit a candidate for statewide office from accepting any more than $10,000 from an individual during a four-year campaign cycle.

Shortly after WDC filed its complaint against McCallum, his campaign admitted the violation and sent back $1,000 to Hanson. But McCabe said the board should fine the campaign even though it returned the money because it did so seven months after the contribution and only after a complaint was filed. Enforcement action also is necessary to send a message to other campaigns and their donors that illegal campaign donations will not be tolerated, he added.

Unlike contributors who violate the law, candidate fines are less costly. Candidates, like McCallum, face only civil fines of up to $500 per violation.

It appears likely that complaints against three of the 42 contributors will be legitimately dismissed. In two cases involving Sheboygan businessman Terry Kohler and former University of Wisconsin regent San Orr contributions returned by a candidate to both Kohler and Orr appear to have reduced the total amount they contributed in 2002 to under $10,000. A third complaint involving Michael A. Pitts of Kenosha may be dismissed after he presented evidence to WDC and the board that the $100 contribution that was believed to put him over the limit was made by his son, Michael J. Pitts.

POTENTIAL FINES FACED BY INDIVIDUALS ACCUSED OF VIOLATING
THE ANNUAL $10,000 CONTRIBUTION LIMIT IN 2002

NAME LOCATION EMPLOYER TOTAL 2002
CONTRIBUTIONS(1)
TOTAL FINE(2)
Daniel McKeithan Jr. Milwaukee Tamarack Petroleum $25,600.00 $47,300
Harvey Hammond Jr. Mequon HNTB Corp. $18,500.00 $26,000
James Connelly Milwaukee Foley & Lardner $17,500.00 $23,000
Bryce Styza Chenequa Harmony Homes $17,350.00 $22,550
Jere Fabick Oconomowoc Fabco Equipment $17,345.69 $22,537
Paul Gehl Hilbert Lunda Construction $17,050.00 $21,650
Thomas Radtke Winneconne Radtke Contractors $15,000.00 $15,500
Richard Blomquist Milwaukee Blomquist Benefits Consulting $14,900.00 $15,200
Carlene Ziegler Mequon Artisan Partners Limited $14,000.00 $12,500
D Edward Bolton Milwaukee Bolton Corp. $13,100.00 $9,800
Grant Nelson Prescott Retired $12,500.00 $8,000
William Kennedy Janesville Rock Road Companies $12,245.69 $7,237
Donald Layden Jr. Milwaukee NuEdge Systems $12,100.00 $6,800
Keith Mardak Milwaukee Hal Leonard Publishing Corp. $12,000.00 $6,500
Herbert Kohler Jr. Kohler Kohler Co. $12,000.00 $6,500
Michael White River Hills Rite Hite Corp. $11,750.00 $5,750
Jack Waterman Wisconsin Dells Great Wolf Lodge $11,650.00 $5,450
Diane Hendricks Janesville ABC Supply Co. $11,500.00 $5,000
Karl Rajani Greendale Genesis Health Care USA $11,050.00 $3,650
James Coburn Whitewater Coburn Co. $11,000.00 $3,500
Carol Hanson(3) Delafield Homemaker $11,000.00 $7,000
Mary Kelly Madison Homemaker $11,000.00 $3,500
George Prescott West Bend Prescott’s Supermarkets Inc. $10,950.00 $3,350
Robert Starshak Fox Point Advanced Health Care $10,900.00 $3,200
James F. Miller Appleton Retired $10,500.00 $2,000
Alexander Alcocer Lake Geneva Mann Brothers Construction $10,500.00 $2,000
Daniel Bader Milwaukee Helen Bader Foundation $10,500.00 $2,000
Yogi Bhardwaj Wadsworth, IL National Petroleum Inc. $10,500.00 $2,000
John Brogan Green Bay Wisconsin Converting Co. $10,500.00 $2,000
John MacDonough Chenequa Retired $10,500.00 $2,000
Ralph C. Stayer Fond du Lac Johnsonville Sausage $10,500.00 $2,000
Joseph Madrigrano Jr. Kenosha CJW Distributors/Madrigrano, Zievers et al $10,450.00 $1,850
John Bergstrom Neenah Bergstrom Automotive $10,382.19 $1,647
Lucille Rosenberg Milwaukee Sinai Samaritan Medical Center $10,350.00 $1,550
Randall Knox Jefferson WD Hoard & Sons $10,300.00 $1,400
Ronald Fedler Dodgeville Gold Leaf Development $10,250.00 $1,250
Vishal Lal Greenfield Advanced Pain Management Group $10,250.00 $1,250
Mary Waterman Wisconsin Dells Great Wolf Lodge $10,200.00 $1,100
Susan Mitchell Whitefish Bay American Education Reform Council $10,100.00 $800
TOTAL CONTRIBUTOR FINES $ 316,321
 
NAME LOCATION EMPLOYER TOTAL 2002
CONTRIBUTIONS(1)
TOTAL FINE(2)
Scott McCallum Madison Candidate for Governor (4)  $500

 

TOTAL CONTRIBUTOR AND CANDIDATE FINES $ 316,821

(1) Some totals may be higher than the amounts cited in WDC’s original complaints because some individuals admitted making a greater number of contributions in 2002 than those uncovered by WDC.

 (2) Totals represent allowable fines under Chapter 11.60(1) and 11.60(3), which call for civil fines of up to $500 per violation of Chapter 11 and triple the portion of the contribution that was illegally contributed.

 (3) Contributor accused of two Chapter 11 violations with civil fines of $500 each and triple the portion of the contribution that was illegally contributed.

 (4) McCallum’s potential fine results from $11,000 worth of contributions he accepted in 2002 from contributor Carol Hanson, and failing to return the excess $1,000 until late May, 2003 after WDC filed a complaint against him.