Hijacking Campaign 2002
June 13, 2005
Since issue ad groups are not required to file reports of their activities with the state Elections Board, it is impossible to track exactly how much money is being spent and by whom. What WDC learns about these activities is gleaned from media and political sources, or is disclosed by the groups themselves. This listing details so-called "phony issue ads" that, unlike true “issue ads,” advocate the election or defeat of a candidate.
The American Education Reform Foundation is a national organization, headquartered in Milwaukee, that supports school choice and school vouchers. It is the lobbying arm of the American Education Reform Council (AERC), an organization headed by Susan Mitchell, who, along with her husband consultant George Mitchell, has long been a substantial financial contributor in Wisconsin state politics. Since 1993 the Mitchells have contributed more than $43,000 to candidates for state office.
Financial backers of the group have included the Lynde and Harry Bradley and John M. Olin Foundations which provided the Council with $1.3 million between 1998 and 2001. Wal-Mart heir and prominent school voucher proponent John Walton provided nearly $1 million between 1999 and 2000.
The organization ran ads against Kim Plache and Jim Baumgart – then the incumbent Democratic senators for the 21st and 9th Senate Districts respectively – that claimed their votes to cut Milwaukee’s school choice program cost Racine and Sheboygan more money because of a school aid formula that gives extra aid to the Milwaukee Public Schools. The ad asked people to tell them "to leave school choice alone and not force us to pay more to Milwaukee." (Watch the ad) Both candidates lost.
In addition, a conduit called Funds for Choice in Education and chaired by George Mitchell funnelled more than $109,000 to candidates for state office during the 2001-2002 election cycle. Among the largest contributors through this conduit are individuals associated with the American Education Reform Council or otherwise prominent in the school voucher movement generally:
- George and Susan Mitchell ($13,975);
- John and Christy Walton ($12,100);
- Richard and Sherry Sharp ($12,400) - Richard was formerly CEO of Circuit City and a supporter of the California and Michigan school voucher initiatives;
- J. Patrick Rooney ($7,100) of Golden Rule Insurance and founder of an early privately funded voucher program;
- Deborah McGriff ($7,300) of Edison Schools, a for profit manager of public schools;
- Howard Fuller ($5,900) of Marquette University, AERC board member and former superintendent of Milwauke Public Schools;
- John Kirtley ($4,950) of Children First America, a pro-school choice organization;
- Virginia Manheimer ($6,150) chair of the Empire Foundation for Policy Research, a "limited government" and lower taxes research organization, and director of Children First America;
- Dick and Besty DeVos ($9,000) of Amway who invested $5 million of their family’s money on the failed 2000 Michigan school voucher initiative;
- Peter Denton, chair of Denton Vacuum and founder of the New Jersey based Excellent Education for Everyone, a public education reform and pro-school voucher group;
- Jim Blew ($3,800), national project director for AERC ;
- William Oberndorf and Susan Oberndorf ($9,600) - William is the head of SPO Partners and a founder of the American Education Reform Council.
Sixty-nine percent of the candidates supported by this conduit won their races.
Active in the 2000 elections, this group is headed by Todd Rongstad a former employee of the Republican Assembly caucus and now head of the political consulting firm the Valkyrie Group.
In the 2002 elections the Alliance attacked Julie Lassa, the Democratic incumbent candidate for the 71st Assembly District, with mailers tying her to then Democratic Senate leader Chuck Chvala, then, as now, under indictment for 20 felonies. Although she was then running for reelection to the Assembly, the mailer accused her of having ambitions to run for the Senate and insinuated that she had made questionable deals with Chvala to win his approval.
Lassa responded by filing a lawsuit to learn the identity of the Alliance’s financial backers. In April 2003 the suit revealed that $7,500, or over half the cost of the mailing ($13,148), was paid for by attorney Alex Paul using a a former classmate to launder the money. At this time in April, Paul and Lassa were competing in the Democratic primay leading up to the special election for the 24th Senate District seat left vacant by the January appointment of Kevin Shibilski to Tourism Secretary. Shibilski resigned that position shortly after the Paul’s connection to Rongstad was learned. Paul lost the Democratic primary.
Rongtad was also involved with an independent expenditure group active in 2002 called Citizens for Clean and Responsible Government.
Sheila Corbine from Black River Falls has been linked with this group. An individual named Sheila Corbine is the Attorney General of the Ho-Chunk Nation and a judge for the Lac Courte Oreilles Tribal Court.
The group ran an ad supporting Jim Doyle that stated his support for education, affordable health care, and economic prosperity. The ad asked people to "thank Jim Doyle for supporting the building blocks for a strong economy for all of us for Wisconsin’s future."
Citizens for Wisconsin’s Future remained active after the election. The group started airing statewide radio ads in March 2003 in support of the new gaming agreements that Governor Doyle has negotiated with Wisconsin’s Indian tribes.
The Coalition for America’s families (CFAF) describes itself as a "diverse coalition of concerned citizens, businesses, nonprofit organizations and other stakeholders." CFAF is a Virginia-based corporation that registered as a foreign non-stock corporation in Wisconsin on March 4, 2002.
The group’s president, Barbara Sellett, said the organization "decided to launch TV ads after two Senate attempts to dismantle School Choice in a year" (CFAF press release 5/6/02).
CFAF ran an ad that claimed that former Senators Jim Baumgart (D-Senate District 9) and Kim Plache (D-Senate District 21) voted to cut Milwaukee’s school choice program by $23 million while voting to give state employees $421 million in a "Milwaukee-style" pension deal. The ad asked people to call Baumgart and Plache and tell them that destroying school choice for "fat pension deals" is just wrong. Earlier in 2002, CFAF ran ads with the same message against Senators Baumgart, Plache, and Brian Burke (D-Milwaukee).
A second ad attempted to tie Plache to indicted former Senate Majority Leader Chuck Chvala (D-Madison), claiming that Chvala told a lobbyist to donate money to Plache if he wanted his bill to pass. According to a criminal complaint filed against Chvala, Chvala allegedly told William Peterson, a Chicago attorney, to give $500 to Plache’s campaign so that his Lake Geneva property would be donated to the State of Wisconsin and managed by a nonprofit corporation in order to reap tax benefits. The ad also implied that Chvala told Plache to support a $421 million pension deal for state employees in the most recent state budget bill, and told people to call her to ask if this is true.
Both Plache and Baumgart lost.
CFAF remains active in 2005 running broadcast issue ads in three key media markets against Governor Jim Doyle’s budget proposal. The first ad in late May denounces the plan to allow illegal aliens to receive in-state college tuition. A female immigrant explains in the ad how she and her family have worked hard to become citizens of this state so that their daughter could be the first in their family to go to college. The second television ad in early June depicts the governor’s promise to not raise taxes in his budget proposal as a "fish story," and ridicules his choice to use the newly generated tax revenues for domestic partner healthcare coverage. The group’s new director is Steve King, long-time Republican leader in Wisconsin. King admonished the governor for considering such funding priorities given the existing budget deficit and high taxes in Wisconsin. The ads from 2005 and 2002 are posted at CFAF’s website.
The coalition describes itself as a "nonprofit business and trade association with a mission of uniting businesses, business leaders, entrepreneurs and business associations that share the belief that economic expansion and prosperity can be achieved by reducing regulatory burdens on business" (LaCrosse Tribune, 10/11/02). It maintained a post office box in Middleton, Wisconsin, in 2002.
The coalition ran two ads against Senator Rod Moen (D - Senate District 31). One ad thanked him for sending 500 jobs to Ecru, Mississippi, and encouraged people to "give Mr. Moen a piece of your mind about them jobs" by calling him at his office in Madison. The ad was based on his involvement to grant Ashley Furniture a Department of Natural Resources exemption that would have allowed them to expand a manufacturing plant in Arcadia onto an adjacent wetland. Ashley Furniture has since decided to expand at an existing plant in Ecru, Mississippi.
A second ad told people to call Senator Moen to thank him for sending prison jobs to Whiteville, Tennessee, a privately managed prison that houses Wisconsin inmates. This ad was based on his support for delaying the opening of a privately built prison in Stanley, Wisconsin that was part of the 2002 budget repair bill package.
The Washington, D.C.-based Democratic Legislative Campaign Committee (DLCC) ran an ad supporting incumbent Kimberly Plache (Racine) by stressing her role in supporting legislation benefiting children and seniors. The ad asked the viewer to call Plache and encourage her to keep up the fight. The DLCC also ran an ad against Tom Reynolds (Republican candidate for the 5th Senate District), charging him with being a self-described "radical extremist" who opposed community options programs that allow seniors to receive medical care in their homes, affordable prescription drugs for seniors, and supported a $200 million cut in education. The ad asked people to tell Tom Reynolds to "reject extreme policy and stand up for seniors and kids." Reynolds won his race; Plache lost hers.
In 1998 the DLCC was part of a shell game that facilitated the illegal flow of corporate money into Wisconsin legislative races. Since 1996, the DLCC has funded, in whole or in part, the following independent expenditure groups: Wisconsin 2000, Future Wisconsin, Vote November 3rd, the Wisconsin Voter Education Fund and Independent Citizens for Democracy. The last is a Wisconsin-based front group run by former Senate Majority Leader Chuck Chvala, whose activities are part of a criminal complaint filed against him. In early July, it was learned that the Democratic Legislative Campaign Committee had come under FBI investigation for campaign finance violations in Maryland and Wisconsin.
A Democracy Campaign review of IRS records found that the DLCC raised over $681,000 from Wisconsin in 2002, but reported sending only $4,000 directly to a Wisconsin independent expenditure group, Citizens for Clean and Responsible Government, for campaigns in two state legislative races. DLCC also reported a few small payments to political consultants in the state, including Raghu Devaguptapu, who is one of three legislative staff members charged in the Capitol corruption scandal.
The rest of the money raised was likely laundered through party committees in other states before returning to Wisconsin to influence elections here, because much of the money came from corporations, which cannot legally donate to political campaigns in Wisconsin.
WDC’s review of the DLCC’s filings with the IRS show contributions from Alliant Energy, Madison Gas & Electric and MG&E subsidiary Central Wisconsin Development Corporation, Oneida Tribe of Indians of Wisconsin, Dairyland Greyhound Park, LaCrosse-area road builder Mathy Construction Company, Air Wisconsin Airlines Corporation, Badger Liquor Company, General Beer Distributors Company, building contractor J.F. Ahern Company, Racine road builder James Cape & Sons Company, Black River Falls road builder Lunda Construction Company, Elkhorn road builder Mann Bros. Inc. and over 20 other Wisconsin corporations.
In addition to the corporate money, DLCC also raised significant sums from Wisconsin labor unions, most notably the Wisconsin Education Association Council. WEAC gave $300,000.
The Democratic Party of Wisconsin first began doing what it called “issue ads” in the 2000 general election for the State Assembly, a subject of a complaint filed with the State Elections Board by the Democracy Campaign. The complaint was rejected by the Board leaving the door open for party-run issue ads in the 2002 election.
The Democratic Party of Wisconsin ran an ad in the final days of the campaign that blamed Scott McCallum for a $2.8 billion budget deficit, $123 million in proposed new taxes, spending $9 million for three airplanes for the Governor, denying $8 million in funding for seniors’ home health care, and free use of a boat given to McCallum’s campaign by "special interests." The ad concluded by telling people to call Scott McCallum with the message that "his record doesn't add up for Wisconsin’s working families."
Between October 29, 2002, and October 31, 2002, the Democratic National Committee (DNC) received $500,000 from the Ho-Chunk Nation, $200,000 from the Potawatomi, and $25,000 from the Oneida Nation. The DNC then donated this tribal money to the Democratic Party of Wisconsin to fund issue ads in support of Jim Doyle and the rest of the party ticket.
A total of $200,000 was donated to the Democratic National Committee by Mathy Construction of Onalaska, Wisconsin, and its President, Charles Mathy, between October 29, 2002, and October 31, 2002. The DNC received $50,000 on October 29 from Mathy Construction and two contributions on October 31 – one in the amount of $100,000 and another $50,000 contribution – from Charles Mathy.
The Milwaukee-based public relations firm Zigman Joseph Stephenson sent $15,000 to the Democratic National Committee on October 31, 2002.
On November 5, 2002, two major Wisconsin utilities – Wisconsin Energy Corporation and Wisconsin Public Service Corporation – made soft money contributions to the Democratic National Committee of $15,000 and $10,000, respectively.
Miller Brewing also gave the Democratic National Committee $25,000 on November 5, 2002.
The Democratic National Committee transferred $1.23 million to the Democratic Party of Wisconsin between October 26, 2002, and November 4, 2002. The Democratic National Committee transferred a total of $1.88 million to the Democratic Party of Wisconsin in 2002.
In September, the Forest County Potawatomi began an advertising campaign against the Crandon mine with a message that "Wisconsin needs a governor and legislators who will work to stop the Crandon Mine."
In late October, the Forest County Potawatomi built on their previous advertising campaign, and began naming gubernatorial candidates Jim Doyle and Scott McCallum in their ads. One ad portrayed Jim Doyle as pro-environment and in support of banning cyanide mining and closing mining loopholes. The ad stated that "Wisconsin needs a governor and legislators who will close mining loopholes and ban cyanide." Political sources say that $250,000 was spent on a two week buy for this particular ad.
The Forest County Potawatomi spent an estimated $20,000 on advertisements in the Milwaukee, Madison, and Green Bay media markets from September 11 through October 26, 2002.
The Potawatomi also made a $200,000 donation to the Democratic National Committee on October 29, 2002. The Democratic National Committee transferred $1.23 million to the Democratic Party of Wisconsin between October 26, 2002, and November 4, 2002. The Democratic National Committee transferred a total of $1.88 million to the Democratic Party of Wisconsin in 2002. In August, the Potawatomi made a $500 contribution to the campaign of Scott McCallum. Because it was improperly made under Wisconsin Law, his campaign returned it within the week.
This organization has functioned as a super-PAC in the past, pooling money from several PACs, mainly labor unions and national Democratic Party sources. It registered with the State Elections Board as an independent committee in 1998 and has since spent $1.1 million in independent expenditures to support Democrats or oppose Republicans in key state Senate races. It has long been assumed that former Senate Majority Leader Chuck Chvala recommended how this group’s money gets spent, and lobbyists speaking on a condition of anonymity have told The Capital Times that it is "Chuck’s group" (The Capital Times, 7/11/02).
In 2002, Independent Citizens for Democracy did issue ads rather than independent expenditures, making it difficult to track their activities since they are not required to report them to the State Elections Board.
One ad aimed at state Senator Dave Zien (R-Eau Claire), claimed that Zien’s Personal Protection Act (PPA) from the '99-'01 session would have allowed concealed weapons in daycare centers, parks and hospitals. The ad stated that "he and his gun bill are too extreme for our community" and asked people to call Dave Zien at his Capitol office and tell him that "we've had enough of your nonsense."
Independent Citizens for Democracy’s director, Thomas Boeder, and treasurer, Scott McCormick, have been granted immunity in exchange for their cooperation in the John Doe investigation into illegal campaigning and influence peddling in the Capitol.
Representing businesses in Milwaukee, Waukesha, Ozaukee and Washington counties, the Metropolitan Milwaukee Association of Commerce (MMAC) is active on municipal, county and state levels both as a lobbyist and – through its PAC and conduit – as a campaign contributor.
MMAC did not run any issue ads during the 2002 fall campaign season, but at the beginning of the year it sent 20,000 flyers to residents of nine Assembly Districts praising each district’s respective Republican legislator for his or her work on "stopping tax hikes," "limiting spending," "cutting taxes," and "spending wisely." The mailers urged the recipient to call his or her legislator to thank him "for a job well done" and provided a toll free number to call. The Democracy Campaign has been able to identify two of the legislators MMAC praised in this way: Eugene Hahn (47th Assembly District) and Rick Skindrud (79th Assembly District). (Sample flyer.) Similar flyers were mailed in early 2000 in a joint effort by Volunteers for Agriculture and the Wisconsin Builders Association. However, these two groups treated their spending on this campaign as independent expenditures which they fully accounted for in reports filed with the State Elections Board.
(An interesting sidebar: the phone number on MMAC’s flyers was wrong. The number was for a Los Angeles-based company called Flowserve Corp. Reportedly MMAC reimbursed them for the calls they received.)
The Republican Party of Wisconsin was first accused of illegally doing candidate advocacy under the misleading guise of “issue ads” in a 1999 complaint the Democratic Party of Wisconsin filed with the State Elections Board. In 2001, the Democracy Campaign filed similar charges with the same body. The Democracy Campaign’s complaint was concerned with the Republican Party’s activities during that year’s campaign for the statutorily non-partisan Superintendent of Public Instruction. Both complaints were rejected by the Elections Board leaving the door open for party-run issue ads in the 2002 election.
The state Republican party ran several anti-Jim Doyle issue ads during the 2002 general election.
One ad stated that three law firms received $77 million to file paperwork for the tobacco settlement and that lawyers, lobbyists, and law firms contributed half a million dollars to Doyle’s campaign, citing statistics from the Wisconsin Democracy Campaign. It also stated that WEAC gave Doyle’s campaign thousands of dollars with the promise that teachers will get a raise while taxpayers will get socked with a billion dollars in new property taxes. The ad concluded by telling people to call Jim Doyle with the message "no more special deliveries."
A second ad stated that Doyle has missed several court filing deadlines, costing taxpayers money in a botched malpractice case, providing a loophole for Indian casinos, and setting a convicted rapist free. The ad concluded by telling people to call Jim Doyle with the message "buy a calendar."
A third ad claimed that Jim Doyle wanted to increase property taxes by $700 per person and would balance the budget by taxing such things as diapers, home heating, prescription drugs, and wheelchairs. It further stated that Jim Doyle would even tax your casket when you die and the flag they drape it with. The ad concluded with "Call Jim Doyle today ... and tell him you want to keep your job. No more new taxes."
A fourth ad stated that Jim Doyle would drive retired people from their homes due to the $700 tax increase on the average home resulting from his proposed lifting of property tax caps. People are asked to call Jim Doyle and tell him "our parents deserve better".
WEAC is the labor union that represents most teachers in the state. It has a history of spending more money in elections than any other special interest group.
For the first time, WEAC President Stan Johnson indicated that WEAC may use "issue ads" during the 2002 elections in an independent ad campaign to help gubernatorial candidate Jim Doyle: "We’ll do what’s necessary to win the elections. It’s very important for our members, very important to the people who attend public schools," Johnson said (Milwaukee Journal Sentinel 7/2/02).
Indeed, WEAC spent $222,000 on a radio ad campaign during the primary election in support of Jim Doyle’s gubernatorial bid. The ad praised his positions on health care, prescription drugs and education and asked listeners to call Jim Doyle’s Justice Department office in the Capitol to "tell him to keep leading the fight for Wisconsin families."
WEAC ran a second ad during the general election in support of Jim Doyle. That ad focuses on Governor McCallum’s fiscal record, citing his attempts to raise taxes and fees by over $123 million, the sale of the tobacco settlement for 30 cents on the dollar, and the $50,000 price tag for remodeling his office.
Another one of WEAC’s ads featured four Wisconsin public high school students – a future firefighter, construction worker, doctor, and teacher – with the message that "someday we’ll be there for you, but today we need you to be there for us. Support candidates who believe that every kid deserves a great school."
An ad in support of then-incumbent 9th district Senator Jim Baumgart (D-Sheboygan) said that he voted to keep neighborhoods safe from sexual offenders and to keep prison inmates from getting access to personal information. The ad contrasted the record of his opponent, Republican Representative Joe Leibham, claiming that he voted to increase property taxes while on the Sheboygan City Council and voted to use tax dollars to defend capitol employees in the caucus scandal. The ad concluded with "Joe Leibham. Wrong on taxes. Wrong for Wisconsin." Baumgart lost to Leibham.
It also made reported independent expenditures in the 2002 election.
Representing over 4200 members, Wisconsin Manufacturers and Commerce is the state’s largest pro-business lobbying organization. It uses its PAC, Concerned Business and Industry, and its conduit, Capitol Gains Club, to make direct contributions to candidates. Concerned Business and Industry has also done independent expenditures in the past.
WMC IMC was formed to advance a business agenda through "issue advocacy" without "expressly advocating" for the election or defeat of any clearly identified candidate and has done so since 1996. In the 2002 general elections it ran ads in at least two races.
In the 9th Senate District, one ad stated that then-incumbent Senator Jim Baumgart (D-Sheboygan) voted to "loosen property tax caps" that would have saved the average homeowner $700 a year. The ad implied that seniors would have to leave their homes and Wisconsin because ther property taxes will be too high. The ad concluded by asking people to call Jim Baumgart to "remind him high property taxes are driving our parents from their homes."
In the 5th Senate District, an ad claimed that Democratic candidate George Christenson supported a plan to raise taxes by $1.5 billion, including taxing nursing home care. The ad asked people to tell him that "nursing home care is expensive enough."
In the 67th Assembly District, an ad ridiculed Democratic candidate Paul Gordon for a lawsuit he had filed in 1997 on behalf of two legislators who lost reelection in 1996. The ad concluded by encouraging viewers to call Gordon with the message"Our democracy belongs to the people, not the politicians."
Working Families of Wisconsin is a Wisconsin nonstock corporation that describes itself as "an independent advocacy organization formed to mobilize, educate and inform Wisconsin residents on important economic and social issues." The supporters of Working Families of Wisconsin include "organizations with established records of lobbying on public policy, coalition building and grassroots organizing. These organizations hope to advance important economic and social issues from a worker rather than a business perspective" (WFW press release 10/21/02).
Working Families of Wisconsin ran an ad in support of Jim Doyle which contrasted the records of Doyle and Governor Scott McCallum. The ad stated that "after two years of Scott McCallum, the state budget is a mess and Wisconsin now has one of the worst credit ratings in the nation." The ad discussed Jim Doyle’s plan to move Wisconsin forward by balancing the budget without increasing taxes and without sacrificing vital services, and by working to ensure affordable health care. The ad concluded by asking people to contact Doyle to tell him to "keep fighting for Wisconsin."
Working Families of Wisconsin spent an estimated $192,000 on non-cable advertisements in the Milwaukee, Madison, and Green Bay media markets from September 11 through October 26, 2002.