Wisconsin Democracy Campaign Files Ethics Complaint Against Rep. Dean Knudson

September 1, 2016

Rep. Dean Knudson
Rep. Dean Knudson

Today, the Wisconsin Democracy Campaign filed a formal ethics complaint with the Wisconsin Ethics Commission against Rep. Dean Knudson (R-Hudson), who set up his own express advocacy PAC while in office.

“This violates the letter of the law, it defies the clear legislative history of the law, and it’s a recipe for further corruption,” said Matt Rothschild, the executive director of the Wisconsin Democracy Campaign.

Knudson’s PAC, the Wisconsin Liberty Fund, was formed on June 3, 2016.

The law doesn’t allow elected officials to have both their own candidate committee and a PAC, but Knudson has both.

On Nov. 6, 2015, on the floor of the State Senate, when the new campaign finance law was being debated, Sen. Majority Leader Scott Fitzgerald acknowledged that this would be illegal. “Currently the bill limits candidates to one candidate committee unless they are running for higher office…. “If you’re a candidate for office in Wisconsin, you cannot set up a separate committee and then say I’m going to raise money into that pot as well because you’re coordinating with yourself. That is prohibited by this bill.”

Allowing Representative Knudson or other elected officials to set up their own PACS would set a terrible precedent, which could make an even bigger mockery of our campaign finance law. For instance, right now, if you’re a State Assembly person like Knudson, the most your richest friend can give your own campaign committee is $1,000. But with this precedent, your rich friend could give your express advocacy PAC, which does the same thing as your committee, $1,000,000 or even $10,000,000.

The ethics complaint by the Wisconsin Democracy Campaign concluded: “The letter of the law and the legislative history of the law are clear. The creation of the Wisconsin Liberty Fund, an express advocacy PAC by a sitting legislator, is patently illegal.”

Complaint to the State of Wisconsin Ethics Commission, Sept. 1, 2016

State Assembly Representative Dean Knudson unlawfully established the Wisconsin Liberty Fund on June 3, 2016, while still being a member of the legislature and while still maintaining his own campaign committee, which remains in operation as of this date, Sept. 1, 2016. Both the letter of the law and the legislative history behind last year’s redrafting of Wisconsin’s campaign finance law make clear that no legislator can establish another committee other than his or her own campaign committee. Allowing a legislator to do this would make a mockery of the state’s ability to set reasonable limits on campaign contributions and would invite corruption.

I. The Letter of the Law

In Chapter 11 (section 11.0202), it states: “ (c) Except as provided in par. (d ), no candidate may establish more than one candidate committee.”

“(d) An individual who holds a state or local elective office may establish a second candidate committee under this subchapter for the purpose of pursuing a different state or local office.”

Representative Knudson has not established this second committee “for the purpose of pursuing a different state or local office,” as he is not running for another office.

II. The Clear Legislative History

During the Senate floor debate on AB 387 on the evening of November 6, 2016, Sen. Jon Erpenbach gave an impassioned speech about the problems that would arise if a candidate or elected official could set up multiple committees.

Sen. Erpenbach “We need to make sure that legislators and candidates can’t create or operate any committee other than their own campaign committee. That means that we cannot start an issue advocacy group and go out and raise money for it and say how the money is going to be spent. That means we can’t start up some sort of SuperPAC and dictate how the money is going to be spent. We have to have this to protect the integrity of the institution.”

He and other Democrats had introduced an amendment (Amendment 4 to AB387) that would have explicitly disallowed the setting up of more than one committee.

Majority Leader Scott Fitzgerald responded that such an amendment was not necessary because setting up two committees was already illegal under this law.

Sen. Fitzgerald: “Currently the bill limits candidates to one candidate committee unless they are running for higher office….You can’t coordinate with yourself. There’s still the bright line. So if you have your campaign committee, which you’re required by law to have if you’re a candidate for office in Wisconsin, you cannot set up a separate committee and then say I’m going to raise money into that pot as well because you’re coordinating with yourself. That is prohibited by this bill.”

Sen. Erpenbach responded to that by saying that some legislators might still set up a second committee, though it would be illegal:

Erpenbach: “Here’s the deal, for the Senator from the 13 th, yeah, we can. If it’s an issue advocacy group and I’m not expressly advocating for or against anything, I don’t have to disclose one word. I don’t have to disclose anything. How do you know? I don’t have to disclose. So here’s the deal: If you don’t have disclosure, anybody in this room can operate an independent expenditure [group], especially and really only if it’s an issue advocacy group because we are not requiring disclosure.

“So, yep, what the Senator from the 13 th said is true, I can’t. But my response is really simple: How the hell are you going to know? You won’t. I don’t have to disclose. That group does not have to disclose anything. So yeah a legislator can do this.  And yes, even though it is illegal, a legislator can coordinate because the legislator won’t have to disclose that he’s in charge of the issue advocacy group Friends for a Sunny Day or I Like Cheese. That’s why disclosure is so important. …Somebody could break the law and no one will ever know. Ever.”

NB: So here you have the head of the State Senate and a Senator from the minority party both agreeing that setting up two committees is illegal under the current law.

III. Why This Sets a Disastrous Precedent

Allowing Representative Knudson to set up his own express advocacy PAC would set a terrible precedent, which could make an even bigger mockery of our campaign finance law. Consider this: An elected official who isn’t retiring, like Rep. Knudson, could set up an issue advocacy group or an express advocacy group. Donors to this official’s second group could then give unlimited amounts of money to it, thus evading the limits in the law.

For instance, right now, if you’re a State Assembly person like Knudson, the most your richest friend can give your own campaign committee is $1,000. But with this precedent, your rich friend could give your express advocacy PAC, which does the same thing as your committee, $1,000,000 or even $10,000,000.

Permitting elected officials to set up their own PACs, whether issue advocacy or express advocacy, is a clear violation of the law. It cripples the state’s ability to set reasonable limits on contributions. And it invites corruption.

As Sen. Erpenbach said on the Senate floor, it would allow, for instance, a representative to accept an unlimited donation from an executive of a corporation who had just testified before that representative’s committee. It would also invite other forms of corruption and would, as Sen. Erpenbach warned, tarnish the integrity of the legislative branch.

The letter of the law and the legislative history of the law are clear. The creation of the Wisconsin Liberty Fund, an express advocacy PAC by a sitting legislator, is patently illegal.

PDF Copy of Complaint