Wednesday, July 23, 2014

Grassroots My Ass

Governor Scott Walker’s campaign finance report shows 56,530 itemized individual contributions totaling $7.83 million during the first six months of 2014 – a statistic his campaign claims is indicative of “overwhelming grassroots support for Governor Walker’s campaign to continue moving Wisconsin forward.”

Walker is among dozens of politicians over the years who use the number of campaign contributions to claim they’re really popular with ordinary citizens. But a closer look at the numbers reveals little proof of “overwhelming grassroots support.”

First, the number of itemized contributions came from slightly more than 41,500 donors who represent only seven-tenths of 1 percent of the state’s estimated 5.8 million residents.

Second, most of Walker contributions and donors were from outside Wisconsin. The governor received $4.39 million or 56 percent of his contributions from nearly 22,000 donors outside the state who can’t vote for him, and $3.43 million or 44 percent from slightly more than 19,500 Wisconsin residents – about three-tenths of 1 percent of Wisconsin’s 5.8 million residents. About $9,700 worth of the governor’s itemized contributions listed no state or zip code.

Third, Walker’s campaign statement claims 76 percent of the contributions it received were for $75 or less – another statistic meant to show grassroots support – but that’s not where the governor raised most of his money.

A review of his individual contributions shows he received $4.53 million in contributions of $1,000 or more which represents 57 percent of his total individual contributions for the six-month period.

Walker’s Democratic opponent, Mary Burke, hasn’t made the same claim of grassroots support based on her 2014 fundraising – nor should she. Burke’s campaign report showed she accepted 50,518 itemized contributions totaling $3.29 million from slightly more than 35,500 donors who represent only sixth-tenths of 1 percent of the state’s population.

Burke accepted $1.11 million or 34 percent of her total individual contributions from slightly more than 17,600 out-of-state donors who can’t vote for her, and $2.18 million from slightly more than 17,900 Wisconsin residents – about three-tenths of 1 percent of state residents.

And Burke’s take from contributions of $1,000 or more totals $1.02 million or 31 percent of her individual contributions.

Thursday, July 10, 2014

Big Donor Seeks OK For Golf Course Project In State Park

The company led by a generous contributor to Republican Governor Scott Walker has proposed building a road and maintenance facility in a state park that would serve a new high-end golf course on company-owned land adjacent to the park.

The Kohler Company’s request for a conditional use permit to develop the new course on its land is scheduled for a July 16 hearing before the Town of Wilson Plan Commission.

In addition, the Department of Natural Resources must approve an easement before the golf course maintenance facility and road can be built on state property. The affected acreage includes forest and wetlands in the Kohler-Andrae State Park near Lake Michigan.

The Kohler project comes amid years of criticism the Walker administration has pushed to make the DNR a more business-friendly agency at the expense of safeguarding the environment.

Kohler Company employees contributed $51,304 between 2009 and 2013 to legislative and statewide candidates. Most of the contributions – $44,500 – were made by company president Herb Kohler Jr. Walker received $42,254 followed by GOP Senators Joe Leibham of Sheboygan at $3,950 and Senate Majority Leader Scott Fitzgerald of Juneau at $2,000 from Kohler and his employees.

Kohler developed Whistling Straits golf course which will host the 2015 PGA Championship, one of professional golf’s four major tournaments. The course also hosted the 2004 and 2010 PGA Championships.

Companies Cited In Investigative Report Gave Generously To Governor

Three companies cited in a recent WKOW-TV investigative report that dealt with outsourcing jobs in Wisconsin to foreign countries after they accepted millions of dollars in tax breaks from the state contributed more than $6,500 to state and legislative candidates from 2011 through 2013.

Executives of Eaton Corporation, its subsidiary Cooper Power Systems, and Plexus Corporation made most of their contributions – $5,553 – to Republican Governor Scott Walker during the three-year period. Tax breaks were awarded to Eaton and Plexus beginning in 2011 by the Wisconsin Economic Development Corporation, a state agency created and chaired by the governor to foster business growth and job creation through tax credits, grants and other financial incentives.

Campaign finance records showed Cooper Power Systems executives contributed $4,305 from 2011 through 2013, including $4,080 to the governor. Plexus Corporation executives contributed $1,395 to state and legislative candidates during the period, including $640 to Walker, and Eaton Corporation executives gave $833 – all to the governor.

Wednesday, June 25, 2014

Sexed-Up Virgins

For the better part of 20 years, we've been told by shadowy interest groups and their spin doctors and hired guns that the campaign ads they run aren't political ads at all. They are merely discussing issues. Never mind that most of the groups never say a word about these issues when they are actually being debated at the Capitol. They only feel the urge to discuss in the weeks before elections. And never mind that the groups that are lobbying at the Capitol choose to discuss entirely different issues when election season rolls around.

Never minding all that, these groups insist that their ads aren't aimed at influencing voters. They insist they have nothing to do with the candidates and are not taking sides in elections. They are just bringing up issues. And because they are just discussing issues, they claim their ads technically have no political purpose. The technicality is the absence of words like "vote for," "vote against," "elect" or "defeat" in their messages (as if saying such words is the only way to make it plain as day in an advertisement what you want the viewer or listener to think and do). Exploiting this technicality, they do not have to obey campaign contribution limits and they do not have to publicly disclose where their money comes from.

This has always been a farce, but it is a farce that has been blessed by a generation of lawmakers, election officials and judges.

This farce has been very, very good to them. It has put them in the captain's seat of the ship of state. But they are not satisfied. Now they want to "discuss issues" in a way that enables them to evade contribution limits and disclosure requirements while also plotting strategy with candidates and coordinating their activities with the candidates' campaigns. The same candidates they've insisted they had nothing to do with for the past 15 or 20 years.

They want it both ways. They want to be legally regarded as virgins while getting laid at the same time.

And they are counting on the current batch of judges to grant their wish.

Friday, June 20, 2014

If We Follow John Doe

John Doe is the name given to unknown or anonymous targets of a criminal investigation or similarly unidentified defendants or plaintiffs in legal proceedings. Wisconsin has come to know John Doe well. A little more than a decade ago, "John Doe" was actually five of the state's most powerful legislators as well as several of their aides. Criminal charges for misconduct in public office were filed against all of them, and ultimately political careers were ended in what has come to be known as Wisconsin's "caucus scandal."

More recently, John Doe turned out to be six close associates of Governor Scott Walker who were convicted of a variety of crimes. What was unearthed during that investigation prompted another, and in this new drama John Doe is Walker himself, along with key political allies of the governor like R.J. Johnson, Deb Jordahl and Eric O'Keefe, and groups like O'Keefe's Wisconsin Club for Growth.

While the fascination with who John Doe is and what he has been up to is entirely understandable, more attention should be paid to where Mr. Doe is trying to lead us.

Previously sealed documents made public this week by court order show that prosecutors accuse Walker of overseeing a "criminal scheme" to illegally coordinate election campaign activities with supposedly independent groups. Longstanding Wisconsin law requires groups wishing to intervene in elections by making "independent disbursements" to swear an oath that they do not "act in cooperation or consultation with any candidate or agent or authorized committee of a candidate...."

It has been settled law in Wisconsin that this prohibition on coordination between candidates and interest groups applies to organizations doing election-related "issue advocacy." Application of the coordination ban to so-called "issue ad" groups was challenged in the late 1990s in the case involving a group that was found to be coordinating with Justice Jon Wilcox’s 1997 campaign for reelection to the state Supreme Court.

State election authorities heavily fined both Wilcox’s campaign as well as political operative Mark Block, who ran the issue ad-sponsoring Wisconsin Coalition for Voter Participation. At the time, the fines were the largest in state history for campaign finance violations. Block also was banned from involvement in Wisconsin elections for three years. The state's enforcement actions were contested in court, and ultimately were upheld in a 1999 ruling.

John Doe's aim in this current matter is to unsettle that settled law. Federal judge Rudolph Randa recently obliged, putting the investigation on hold for the time being. Judge Randa threw that settled law out the window. He bought Doe's contention that coordination should be allowed, ruling that the ban on coordination applies only to groups engaged in "express advocacy" — messages that explicitly urge people to vote for or against a candidate — not "issue advocacy" that promotes or opposes candidates without coming right out and saying how people should vote.

Randa does not have the final say on this. But if his ruling stands up on appeal and such coordination becomes legal, we will enter a new world of shadow campaigns where all of the money will be dark money. Candidates will be able to orchestrate campaigns carried out by surrogates who do not have to abide by campaign contribution limits or disclosure requirements. Voters will be kept totally in the dark about who is paying to put candidates in office. Elected officials will be spared the discomfort of journalists and others connecting the dots between who gives them political donations and who benefits from their policy decisions. There will be no more visible conflicts of interest. Public ignorance will be the politicians' bliss.

John Doe does not want a settlement in this case. He wants a test case, one that goes all the way to the Supreme Court. Five of the nine justices have shown ample disrespect for precedents and a willingness to write new law from the bench in other recent campaign finance cases. In Citizens United the court overturned more than a century of settled law to allow unlimited spending on elections by corporations and other interest groups. In McCutcheon the five-member majority invalidated the decades-old federal aggregate limit on campaign contributions to candidates. John Doe is counting on more such judicial activism to sweep away the prohibition on coordination.

If John Doe gets what he wants, the result will be shadow campaigns overseen by candidates but carried out by anonymous proxies. Unlimited donations. No disclosure. An electoral black hole preventing any light from escaping and causing anything remotely resembling democracy to implode.

Tuesday, June 10, 2014

One Way Kochs Are Like Rihanna

Thinly veiled. That's what the billionaire Koch brothers have in common with the pop star Rihanna.

First the Kochs unleashed a $900,000 TV ad blitz to support Governor Scott Walker's policies and boost his reelection fortunes. As we've noted, this advertising campaign is underwritten by Americans for Prosperity Foundation, the Kochs' tax-exempt 501(c)(3) charitable organization that is not supposed to use any resources to participate or intervene in political campaigns.

Now AFPF is stuffing mailboxes across the state with a full-color glossy flyer that likewise sings the praises of Walker's signature legislative accomplishment and plays off his pet slogan "open for business."

Leaving no political button unpushed, the mailer invokes the theme of the iconic 1984 "Morning in America" ad appealing to voters to keep Ronald Reagan in the White House. It proclaims that "Wisconsin is working again" and is "back on the right track." Then the Kochs take credit for it all, boasting that "Wisconsin is enjoying better days and a brighter future" because "we passed the Budget Repair Act" otherwise known as Act 10.

This is electioneering, obvious to everyone but the current crop of judges, lawmakers and election officials who study it and mysteriously conclude this kind of message has no political purpose whatsoever. Because it lacks the requisite political purpose in the eyes of these beholders, billionaires like Charles and David Koch can spend a not-so-small fortune on this "free" speech, propagandize the state's population about the blessings of their agenda, get a tax deduction courtesy of American taxpayers to defray their expenses, all the while avoiding public disclosure of their activities.

Put another way, according to the prevailing law of the land, this flyer is an act of charity. It promotes social welfare. It does not promote Scott Walker's reelection in any way, shape or form. It is not a political ad.

The prevailing law of the land is an absurdity. And it is an obscenity, a thin veil over an ugly truth, namely the purchasing of our government by modern-day robber barons.

Thursday, May 29, 2014

Taxpayers Subsidizing 'Free Speech' For Billionaires

That the billionaire Koch brothers are spending upwards of $1 million to launch an election-year advertising campaign in Wisconsin to sing the praises of Governor Scott Walker's policies comes as no surprise. What might not be readily apparent to casual observers is that taxpayers are subsidizing this electioneering.

The ad is sponsored by an arm of the Kochs' operation that is organized as a 501(c)(3) charitable organization, meaning that the donations that went to pay for this advocacy are tax deductible. By blanketing the airwaves across Wisconsin with this pro-Walker message, the Kochs are reducing their tax liability.

IRS rules governing 501(c)(3) tax-exempt status – meant for charitable and educational organizations to promote “social welfare” – prohibit such groups from using any resources to participate or intervene in political campaigns.

On these grounds, the Democracy Campaign filed a complaint with the Internal Revenue Service in 2012 asking the IRS to investigate what appeared to us to be clear violations of the tax-exempt status of Americans for Prosperity Foundation and two other 501(c)(3) "charities." The IRS replied with a letter dated March 22, 2012 saying the agency "has an ongoing examination program to ensure that exempt organizations comply with the applicable provisions of the Internal Revenue Code. The information you submitted will be considered for this program." The letter went on to say "we cannot disclose the status of any investigation." That's the last we heard. Given that AFPF is doing more of the kind of advertising that prompted our 2012 complaint, one has to assume the IRS has blessed this activity. Evidently the IRS does not believe this kind of advertising serves any political purpose. Watch the ad and judge for yourself.

At the invitation of the IRS, we have followed up on our 2012 complaint with a letter calling the agency's attention to the AFPF's latest election-year advertising and requesting enforcement action. We await the taxman's response.

Wednesday, May 21, 2014

Nope, Nothing Political About This Ad

Imagine two kajillionaires, one a pioneer of Internet commerce and the other a spectacularly successful investment fund manager. One lives on the east coast, the other on the west coast. They are known to be partial to liberal causes. They are losing sleep, awakened repeatedly by recurring nightmares. Always the same dream . . . Scott Walker sitting behind the big desk in the Oval Office.

They figure the best way to blow up Walker's road to the White House once and for all is to doom his reelection as Wisconsin's governor. They instruct political operatives they know to set up a tax-exempt social welfare group called "Hacked-Off Badgers." They each funnel several million dollars to the organization.

In the month leading up to the November 2014 election, the group buys weeks worth of advertising time on every television station in Wisconsin. It airs this message, accompanied by ominous music and grainy images of shuttered factories and men in hardhats line up outside the unemployment office:
Scott Walker is a college dropout. And he has been on the dole ever since. Every job he's had has been a government job. That explains why he has no clue how to get Wisconsin's economy moving. Why our state has been dead last in job creation with Scott Walker as governor. Walker's dismal performance doesn't hurt him any. He just keeps feeding from the public trough. But can the rest of us afford to have the worst governor Wisconsin has ever seen? – Authorized and paid for by Hacked-Off Badgers
A pack of federal judges in Chicago just ruled last week that such an ad has no political purpose. Because the message contains no words such as "vote for," "vote against," "elect," "defeat," "support" or "oppose," it is not a political ad. Because Hacked-Off Badgers did not say any of the magic words that ads with a political purpose must contain, the group does not have to disclose how much it paid to launch this attack on Walker, nor does it have to reveal who put up the money.

The political operatives doing the bidding of our two kajillionaires set up Hacked-Off Badgers under a federal law – 26 U.S.C. §501(c)(4) – designed for the creation of groups "not organized for profit but operated exclusively for the promotion of social welfare." The law exempts from taxation the "net earnings of which are devoted exclusively to charitable, educational, or recreational purposes."

In writing regulations to implement the law, the Internal Revenue Service bizarrely took the position that an organization "is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community."

You read right. Exclusively means primarily. So a 501(c)(4) group like Hacked-Off Badgers can spend millions to air their attack on Walker even though the law says 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." Under IRS guidelines, a 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. And for good measure, federal judges have determined that ads like the one sponsored by Hacked-Off Badgers are not political ads at all. Because those magic words are absent, the purpose of the Hacked-Off Badgers' message must be "charitable, educational, or recreational."

Take your pick.