Some time in the next few months, the Supreme Court will have a chance to contemplate exactly what it wrought with the now-infamous 2010 Citizens United decision.
The faulty assumptions in that landmark 2010 ruling are on display in a Wisconsin case that state prosecutors asked the high court to review last month – and which provides a sobering look at deregulation in action.
In Citizens United, the court confidently predicted that unlimited “independent” corporate spending wouldn’t “corrupt” politicians because it would be totally independent of candidates. The court upheld and praised existing laws that require the disclosure of campaign spending, assuring us that they would provide citizens with all the information necessary to “see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”
But Wisconsin Gov. Scott Walker has made a mockery of this optimism. In 2012, Walker successfully fought off a recall effort by working hand-in-glove with supposedly “independent” dark money groups, raising millions from billionaires and corporations with the promise that their identities would not be disclosed. Some of those big secret donors later saw their top priorities pushed into law.
Walker got caught, but an investigation into the scheme was shut down by the Wisconsin Supreme Court, which was dominated by justices who benefited from at least $10 million in spending from the same groups that had coordinated with Walker’s campaign.
The Wisconsin court contorted the law to give its supporters and Walker a get-out-of-jail-free card, issuing a decision that shattered central concepts of campaign finance law while creating new ways for unlimited money to secretly buy influence with elected officials.
Breaking new ground, the court declared that secretive coordination schemes like Walker’s are constitutionally protected, as long as the coordinated ads don’t expressly call for the election or defeat of a candidate. At right, you can see an example of a TV commercial that’s not considered a campaign ad under this rationale. The target, Milwaukee Mayor Tom Barrett (D) was Walker’s opponent in the recall race.
Whether the evenly divided US Supreme Court will review the Wisconsin case remains uncertain. But the underlying facts provide critical insight into the inner workings of a dark money campaign – and the layers of corruption arising from a deregulated campaign finance landscape.
The investigation into Walker’s alleged coordination with outside groups was led by both Republican and Democratic prosecutors, with the assistance of the state’s nonpartisan elections board.
Because the probe was conducted under Wisconsin’s “John Doe” investigatory process, most evidence has remained under seal. But what has been made public shows that Walker secretly raised millions for Wisconsin Club for Growth – a dark money group led by his top campaign adviser R.J. Johnson – with the express purpose of bypassing Wisconsin laws requiring disclosure of campaign donations and prohibiting corporations from giving to candidates.
The campaign also worked closely with another dark money group, Wisconsin Manufacturers & Commerce, which received millions in grants from the club.
Walker’s staff advised the governor to tell donors “that you can accept corporate contributions and it is not reported” and to “stress that donations to Wisconsin Club for Growth are not disclosed.” A set of fundraising talking points told Walker to refer to Wisconsin Club for Growth as “your (emphasis added) 501(c)4.”
Remember, US Supreme Court decisions like Citizens United were premised on the supposed “independence” of outside groups like Wisconsin Club for Growth.
So how seriously did candidates and donors take that “independence?” On the memo line of one check to Wisconsin Club for Growth, billionaire commodities king Bruce Kovner noted that his donation’s purpose was for “501(c)4-Walker.”
According to evidence made public in the probe, Walker raised $1 million from hedge-fund manager Steven Cohen and $250,000 from Republican mega-donor Paul Singer, among others. He even raised $15,000 from Donald Trump, later a political rival in his unsuccessful bid to win the Republican presidential nomination.
Walker knew where his financial support was coming from, but — until the now-stymied investigation began — the public did not.
That meant that the press and the public could not connect those secret financial interests with the policies Walker pursued in office.
For example, after Walker won the election, his top legislative priority for the next session was passing a mining bill drafted by an out-of-state mining corporation called Gogebic Taconite.
During the heated debate over the bill – a proposal met with protest from environmental groups, conservationists and Native American tribes – Wisconsinites never knew that the Gogebic Taconite’s CEO had secretly donated $700,000 to Wisconsin Club for Growth.
The secret $700,000 donation was 22 times greater than the roughly $32,000 that the mining company had disclosed in donations to Wisconsin candidates in 2011 and 2012.
Similarly, the public didn’t know that the CEO of Menards Hardware had secretly given $1.5 million to Wisconsin Club for Growth at Walker’s behest. After Walker won the election, Menards was awarded $1.8 million in tax credits from the economic development agency that Walker chaired. Menards also benefited from the Walker administration’s reduction in environmental enforcement. Under previous governors, the company had repeatedly faced million dollar-plus fines for violating state environmental laws.
Those donations didn’t become public until two years later, and were only revealed at all because of the John Doe investigation.
Campaign finance law has long rested on a distinction between donations to candidates, which are subject to contribution and disclosure limits, and donations to “independent” groups which, after Citizens United and subsequent cases, can raise and spend unlimited amounts, often in secret.
The Wisconsin Supreme Court’s decision crushed that longstanding distinction. It declared that the Walker campaign’s coordination scheme was “constitutionally protected” – as long as the ads placed by the outside groups stop short of expressly saying “vote for” or “vote against” a candidate. But, as the ad above illustrates, such so-called “issue ads” are obviously campaign ads.
In doing so, the court overturned years of precedent. In 1999, for example, then-Wisconsin Supreme Court justice Jon Wilcox’s campaign was fined $60,000 for engaging in the same type of activity as Walker’s campaign.
If you think it is a problem for someone to secretly give millions of dollars directly to a candidate, then you should be troubled by this Wisconsin Supreme Court decision because that’s what it effectively allows. Now there is nothing stopping a Wisconsin candidate from asking billionaires and corporations to contribute million-dollar checks to a shadow political committee, without any public disclosure, and then telling the group how to spend the money. The donation to the shadow committee would be as valuable as a donation to the candidate herself, with the same risk of influence and corruption.
Even more troubling is the fact that some Wisconsin Supreme Court justices were faced with such clear conflicts of interest that they should not have heard the case at all.
The two groups that allegedly coordinated with Walker, Wisconsin Club for Growth and Wisconsin Manufacturers & Commerce, also spent $10 million helping elect the court’s four conservative justices, in most cases outspending the justices themselves. The four justices, in turn, became the majority in the 4-2 decision that shut down the John Doe investigation into these groups’ potential coordination with Walker. In short, the justices disregarded clear conflicts of interest to render a decision in favor of their biggest campaign supporters. Those conflicts were particularly pronounced for Justices David Prosser and Michael Gableman.
In 2011, Wisconsin Club for Growth, Wisconsin Manufacturers & Commerce and their offshoots spent nearly $3.7 million supporting Justice David Prosser. That was five times as much as the Prosser campaign spent itself, in an election that was decided by a mere 7,000 votes.
Three years before, Wisconsin Manufacturers & Commerce’s spending in support of Justice Michael Gableman had come in at five-and-a-half times what Gableman’s own campaign disbursed. Wisconsin Club for Growth’s spending that year also surpassed the Gableman campaign’s. Together, the outside groups spent $2.75 million in a contest that Gableman won by 20,000 votes.
Given the closeness of these contests, it’s arguable that Prosser and Gableman owe their seats to the millions in spending from Wisconsin Club for Growth and Wisconsin Manufacturers & Commerce.
So can those justices be impartial in a case that directly involves those same groups? The special prosecutor defending the investigation of the relationship between the two big-spending outside groups and Walker didn’t think so, and asked Prosser and Gableman to recuse themselves from the case. Both refused to do so. Their failure to step aside undermines the public’s trust in the judiciary. It also appears to conflict with a 2009 US Supreme Court decision in Caperton v. Massey, which involved a blatant effort to buy off the West Virginia judiciary by a mining company.
In that case, the Supreme Court’s majority declared that when a donor “had a significant and disproportionate influence on the outcome” of a judge’s election, and when an election was decided by a small number of votes, among other factors, the risk of “actual bias is sufficiently substantial that it ‘must be forbidden if the guarantee of due process is to be adequately implemented.’”
Moreover, there was a compelling argument for recusal in the Wisconsin case that was not at issue in Caperton. The Wisconsin justices rewrote the rules to greenlight campaign coordination – not only for gubernatorial candidates like Walker, but also for their own campaigns. As a result, the justices can now coordinate with the same “dark money” groups that were parties to the case.
In the absence of a ninth justice, following the death of Antonin Scalia and Republican senators’ refusal to grant hearings for a nominee to replace him, the evenly divided U.S. Supreme Court has been steering clear of cases likely to produce a 4-4 deadlock. So whether the justices will take up this politically charged case remains to be seen.
For now, the Wisconsin example provides a sobering look at a deregulated campaign finance landscape: where voters are left in the dark, secret donors get special treatment and politicians and donors can flout the law and buy the judges they need to get away with it.