Walker goes Scott-free as state judges shut down fundraising probe

Michael Isikoff
·Chief Investigative Correspondent

Wisconsin Gov. Scott Walker addresses the Republican National Convention in Tampa, Fla., in 2012. (Photo: J. Scott Applewhite/AP)

The Wisconsin Supreme Court today ordered a special state prosecutor to shut down a controversial investigation into Gov. Scott Walker’s political fundraising and “permanently destroy” all the evidence it has collected, handing Walker a huge political victory just days after he formally announced his run for president.

“To be clear, this conclusion ends the … investigation because the special prosecutor’s legal theory is unsupported in either reason or law,” Justice Michael Gableman wrote in a majority opinion effectively ending the so-called John Doe probe into Walker’s fundraising.

The sweeping nature of the ruling by a sharply divided court — in which four conservative justices sided with Walker and two liberals with the state prosecutor — pulls the plug on a three-year probe that threatened to expose new details about millions of dollars in secret contributions the Wisconsin governor personally solicited from wealthy donors to defend his record during a bitter 2012 recall election.

But the ruling seems unlikely to end the political controversy spurred by the probe, which had become a lightning rod in the broader debate over the role of so-called dark money in American politics. Critics immediately noted that two of the justices on the court who ruled in Walker’s favor had been elected with $10 million in contributions from outside advocacy groups, which don’t disclose their donors and which were the very subjects of the Walker investigation. 

And the prospect that voluminous records, including emails and memos written by Walker and his top campaign aides, will now be destroyed could well become an issue for transparency advocates. 

“Walker should call on the courts to release these records so the public could judge for themselves,” said Brendan Fischer, general counsel of the Center for Media and Democracy, a Madison-based group that has criticized Walker’s fundraising.

But such a call by Walker seems more unlikely than ever. Walker had denounced the investigation into his fundraising as a “political witch-hunt,” and today his campaign claimed vindication. 

“Today’s ruling confirmed no laws were broken, a ruling that was previously stated by both a state and federal judge,” AshLee Strong, a spokeswoman for Walker’s campaign, said in a statement. “It is time to move past this unwarranted investigation that has cost taxpayers hundreds of thousands of dollars.”

“We’re assessing our options,” Francis Schmitz, the special state prosecutor, told Yahoo News when asked whether he and others involved in the investigation would seek to appeal to the Supreme Court. Schmitz called the decision “a loss for all of the citizens of Wisconsin” and added in a statement: “It defies common sense that a Wisconsin resident … who gives $25 to a campaign has his or her name publicly reported under the law, but according to this decision, someone who gives … $100,000 to a group which closely coordinates with the same campaign can remain anonymous.”

The investigation had been launched three years ago by John Chisholm, the Democratic district attorney in Milwaukee County, as an outgrowth of an earlier probe into Walker’s tenure as county executive that had resulted in six criminal convictions of Walker aides on charges involving improper fundraising and conducting political business on government property.

Chisholm’s probe, which was initiated under Wisconsin’s “John Doe” laws that give prosecutors wide berth to investigate public officials, eventually led to the appointment by state judges of a special prosecutor: Schmitz, a hard-charging former Bush Justice Department lawyer and a Republican. In court papers filed after a series of predawn raids on Walker aides and allies, Schmitz alleged that Walker himself was part of a “criminal scheme” to violate Wisconsin campaign finance laws by personally soliciting millions of dollars from outside groups, such as the Wisconsin Club for Growth, that were working closely with his campaign. Schmitz said that violated Wisconsin law requiring full disclosure of campaign contributions.

Those contributions came from some of the Republican Party’s wealthiest donors, including hedge fund billionaire Stephen Cohen, who deposited $1 million into the Wisconsin Club for Growth’s account after one of his deputies met with Walker, and Wall Street billionaire Paul Singer, who wired $250,000 after meeting with Walker in Sea Island, Ga.

But the secret contributions also included entities with major interests before Walker’s administration. They included $700,000 from a Florida-based mining company seeking an iron ore concession from the Wisconsin state government and, as Yahoo News reported in March, more than $1.5 million from home appliance magnate John Menard Jr., whose firm later received $1.8 million in tax breaks from Walker’s economic development agency.

But the conservative majority on the Wisconsin court, relying in part on U.S. Supreme Court rulings that have struck down large chunks of federal campaign finance laws, rejected the entire premise of the Schmitz investigation. The state court described the Wisconsin law requiring disclosure of contributions for a “political purpose” as “unconstitutionally overbroad and vague under the First Amendment” and contended the disclosure requirements did not apply to outside groups that were engaging in so-called issue advocacy.

Not only do Schmitz and other state prosecutors have to “cease all activities,” but they must also “return property seized in the investigation from any individual or organization, and permanently destroy all copies of information and other material obtained through the investigation,” Justice Gableman wrote in his opinion.

But in a blistering dissent, a liberal judge, Shirley S. Abrahamson, denounced the conservative majority for what she called its “convoluted analysis and overblown rhetoric” and its “anything goes” attitude toward “issue advocacy” by political groups.

“The majority opinion delivers a significant blow to Wisconsin campaign finance law and to its paramount objectives of … providing for ‘a better informed electorate,’” she wrote.

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Republican presidential candidate Scott Walker speaks during a campaign event at a Harley-Davidson dealership in Las Vegas on Tuesday. (Photo: John Locher/AP)