Rarely do members of the public get to see behind the closed doors of political nonprofits, which may receive unlimited amounts of money from mega-donors without disclosing anything about their operations. But a trove of leaked documents from an investigation into Wisconsin Governor Scott Walker's 2012 recall election campaign has offered an unprecedented look at how politicians operate in a post-Citizens United world that features record levels of undisclosed political money.
The documents, leaked to The Guardian newspaper, detail the allegedly illegal coordination between Walker's campaign and an outside group.
Walker, in a scramble to win a bitterly contested election, asked a slew of right-wing billionaires in 2011 and 2012 to pour money into the Wisconsin Club for Growth, a dark money group working closely with a top aide to the governor. After Walker won, a special prosecutor opened an investigation into the campaign's alleged coordination with the group. The leaked documents come from that controversial investigation, which Walker and his allies had dismissed as a partisan witch-hunt.
In 2015, the Wisconsin Supreme Court even shut down the investigation, ruling that the Walker campaign did not violate the law because coordination between candidates and outside groups is only prohibited for so-called express advocacy-direct calls to vote for or against a specific candidate. The Walker campaign only coordinated with Wisconsin Club for Growth on issue advocacy ads, which don't expressly tell voters how to vote, the court ruled, and the activity was therefore legal. The decision infuriated government watchdogs, especially since two conservative justices refused to recuse themselves despite having received outside support from the Wisconsin Club for Growth during their own previous judicial elections.
Not only has the Walker scandal roared back into the spotlight, it may be headed for the Supreme Court. In April, the special prosecutor in the case called on the high court to overturn the state Supreme Court's decision to end the investigation, arguing that coordination on issue advocacy is, in fact, illegal, and that the plaintiffs didn't receive a fair trial because the two justices failed to recuse themselves. The Supreme Court is expected to announce later this month whether it will hear the case.
The documents revealed by The Guardian provide a detailed look at how Walker and his aides used Wisconsin Club for Growth to circumvent traditional campaign contribution limits, and get around a state ban on political donations from corporations.
In one leaked email, Walker casually mentions that he got John Menard, CEO of the home improvement chain Menard's, to contribute $1 million directly from his corporation to the Wisconsin dark money group. A $10,000 check to the group from a wealthy financier had the words "Because Scott Walker asked" written on the memo line.
The Guardian article also details how Walker went around the country to court right-wing mega-donors. Just two months before his recall election, Walker went on a fundraising tour down Fifth Avenue in Manhattan, stopping over the course of a few hours at a hedge fund, a corporate law firm, and Morgan Stanley. He even had a 45-minute meeting with Donald Trump at the real estate mogul's headquarters. Trump later cut a check to the outside group for $15,000.
Casino magnate Sheldon Adelson gave $200,000, and hedge-fund billionaire Paul Singer gave $250,000.
"Stress the donations to WiCFG [Wisconsin Club for Growth] are not disclosed and can accept Corporate donations without limits," stated an emailed list of talking points to Walker from his top fundraiser.
The documents show that special prosecutor Francis Schmitz had found that "a review of email reflects that RJ Johnson … was involved in the media buys on behalf of Wisconsin Club for Growth and [Walker campaign committee] Friends of Scott Walker."
Walker was even briefed about controversies surrounding some of the donors in the event that their names ever became public. One of the controversial donors mentioned Harold Simmons, owner of NL Industries, a company that produced lead paint. Walker was briefed about how Simmons' company had avoided a $52 million lawsuit by the City of Milwaukee seeking damages for children who had suffered from lead poisoning.
In three payments throughout the recall election campaigns, Simmons contributed $750,000 to the group. The public had previously not known about his contributions. This revelation was particularly striking because after the elections, Republicans in the state legislature approved an amendment that gave former lead paint manufacturers retroactive immunity from lawsuits, a measure NL Industries officials had lobbied for aggressively. Watchdogs are now alleging that undisclosed political money allowed a potential pay-to-play scheme to fly under the public radar.
Overall, millions of dollars flooded into the Wisconsin Club for Growth from billionaires and corporations during 2011 and 2012 to support Walker and the six Republican state senators who were also facing recall elections.
The campaign's coordinated effort with the outside group was a success. After Walker won his recall election, he sent an email to an aide asking: "Did I send out thank you notes to all our c(4) donors?"
"The campaign and the outside groups were almost indistinguishable. It appeared to be a coordinated campaign from start to finish," says Brendan Fischer, associate counsel for the Campaign Legal Center and a watchdog who has closely tracked Walker over the years. "This is a snapshot into how dark money actually works. The public had no idea that any of this was going on. This demonstrates that dark money is really only dark for the public. The politicians know where it's coming from."
Now the Supreme Court may be forced to reckon with the outcome of its 2010 Citizens United v. FEC ruling to deregulate independent political spending.
That ruling paved the way for unlimited contributions to outside groups based on the rationale that, as Anthony Kennedy wrote for the majority, unlimited spending would not lead to corruption or the appearance of corruption because the outside spenders were acting independently from candidates.
"I think [the leaks] show that the assumptions inherent in Kennedy's opinion have been undermined by reality," Fischer says.
While tax laws technically require (c)(4) groups like Wisconsin Club for Growth to focus primarily on social-welfare issues, there is minimal oversight by the Internal Revenue Service, which critics say allows political groups to conceal donors' identities and spend millions of dollars on "issue advocacy" ads that are often just thinly veiled political ads.
"They are pretty clearly political entities meant to do things that are not social welfare. Saving Governor Walker's governorship is not a social welfare function," says Robert Maguire, a political nonprofit researcher for the Center for Responsive Politics. "This kind of thing that is happening in a lot of different quarters, but this is just a rare occasion where we get a peak behind the curtain. It's exactly what a lot of us thought was going on."
The Wisconsin Supreme Court ruled that candidates are free to coordinate with these political nonprofits because they are purportedly engaging in issue advocacy. But in a friend-of-the-court brief filed by the Center for Media and Democracy, the Brennan Center, and Common Cause, the government watchdog groups urge the Supreme Court to address this issue, arguing that the Wisconsin Supreme Court ruling is based on a faulty interpretation of legal precedent.
The recent Wisconsin disclosures paint a clear picture of how dark money really operates in modern politics. The question now is whether the Supreme Court will take up the case.
