Wisconsin Democracy Campaign Files Complaint with IRS Against Wisconsin Club for Growth

Fallout from the Guardian article on Scott Walker's fundraising scheme

September 20, 2016

Club for Growth Wisconsin

Madison, WI—Today, the Wisconsin Democracy Campaign filed a formal complaint with the Internal Revenue Service alleging that Wisconsin Club for Growth violated its tax-exempt status in 2011 and 2012. The complaint alleges that Wisconsin Club for Growth engaged in deceptive and improper fundraising practices and engaged in political campaigns as its primary activity.

Wisconsin Club for Growth is a 501(c)(4) “social welfare” organization. According to an Aug. 9, 2016, notice by the IRS, “The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns  on behalf of or in opposition to any candidate for public office. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity.”

But as last week’s article in the Guardian newspaper, “Because Scott Walker Asked,” indicated, Wisconsin Club for Growth was at the center of an intricate scheme to raise money for Scott Walker and other Republican candidates in Wisconsin, at the behest of Walker’s campaign strategist. This was done to evade the limits on direct contributions to candidates and to afford donors the cover of giving anonymously.

“In essence, Wisconsin Club for Growth was deceptively and improperly acting not just as a fundraising drop box and not just as a ‘pass through’ but as the director of a sophisticated secret ad campaign for Friends of Scott Walker,” the complaint states. “It was raising money not for itself and its own independent efforts, but for a dozen other groups, which were all part of Walker’s coordinated effort.”

The documents linked to the Guardian article reveal a myriad of emails in 2011 and 2012 dealing with this scheme. “Given the number of these emails and the complexity of all this wheeling and dealing and the tiny staff” of the Wisconsin Club for Growth, “it is abundantly clear that the primary activity of Wisconsin Club for Growth during this period was to participate in and intervene in political campaigns,” the complaint states.

“The scheme by Scott Walker and Wisconsin Club for Growth not only made a mockery of campaign finance laws; they also appear to have violated the IRS laws,” says Matt Rothschild, executive director of the Wisconsin Democracy Campaign.

The Wisconsin Democracy Campaign is a nonprofit group based in Madison that strives to clean up politics so that everyone’s voice is heard and everyone’s vote is counted.

Contact: Matt Rothschild (608-255-4260)

Complaint