Testimony Before the Wisconsin Ethics Commission on Campaign Finance Transparency

by Matthew Rothschild, Executive Director

December 5, 2017

Faceless Donor and Beggars

Good morning, Commissioners,

I’m Matt Rothschild, the executive director of the Wisconsin Democracy Campaign, which for the past 22 years has been championing clean and open government. We take our watchdog role seriously on the issue of campaign finance, and we advocate for a government where people matter more than money.

I’m here today for two reasons: to give you feedback on your website, and to take the opportunity to discuss briefly some of the ruinous changes in our campaign finance law that adversely affect the reporting you do on your website—and the ability of the public to know who is spending what.

First, there is a defect in the website that makes it difficult to find out about unregistered independent expenditure committees that are spending money on express advocacy in Wisconsin. They do not show up as registrants, nor do they show up in the registrant name box on the report search page. So there’s a Catch-22. To look them up, you need to know their ID number, but you can’t find their ID number by looking up the committee’s name on the registrant page. For example: American Majority Action spent $28,284.96 in Wisconsin in legislative races in 2016. If you saw some of their ads and wanted to look them up on your website by name, you’d be out of luck because they don’t appear on the registrant page.

This is one of the problems that stems from the disastrous campaign finance overhaul bill that the legislature passed in November 2015 and the governor signed. The new law lets lots and lots of independent expenditure groups and PACs to not have to register in Wisconsin. The biggest loophole the new law created was to say that if you’re an independent expenditure group or a PAC and you don’t spend more than 50 percent of your expenditures in the state of Wisconsin during the year, then you don’t have to register.

As a result, some PACs that spend a lot of money in Wisconsin and that used to have to register in Wisconsin no longer have to.

Take Walmart. Its state PAC gave nearly $82,000 to state candidates and legislative campaign committees between January 1, 2010, and December 2015. After that, its state PAC gave nothing, but that didn’t mean that Walmart lost interest in Wisconsin. In fact, its federal PAC gave $49,500 in Wisconsin between January 1, 2016, and June 30, 2017 – which is more, on average, than Walmart used to. But the Walmart federal PAC didn’t have to register with the state of Wisconsin since it’s a national PAC that spends a lot of money in other states and therefore spends less than 50 percent of its total expenditures in our state. But just because Walmart spends a lot nationally shouldn’t prevent Wisconsinites from knowing the details of how Walmart spends its money on our elections here.

Or take Koch Industries. The state PAC of Koch Industries contributed $87,500 to partisan state candidates in Wisconsin between 2010 and 2015, and it had to register with the state. From January 2016 through June 2017, the Koch’s federal PAC gave partisan state candidates and legislative campaign committees $26,000, but didn’t have to register with the state.

So Walmart and Koch Industries are still using PACs to influence who gets elected here in Wisconsin, but now they get shielded from the public.

Allowing large out-of-state PACs to make contributions without registering with the Ethics Commission has led to inaccurate reporting by the candidates. For example, nine different legislative candidates reported receiving contributions ranging from $1,000 to $2,000 from GOPAC Wisconsin between October and November 2016. GOPAC Wisconsin reported no such contributions during this time. Examination of reports filed with the Federal Elections Commission shows that those contributions came not from GOPAC Wisconsin but from the GOPAC Electoral Fund, which is its national PAC.

One candidate, Rob Summerfield, now the incumbent Republican Representative for the 67 th Assembly District, dealt with the problem by filing an amendment on October 23, 2017, simply deleting the contribution from GOPAC Wisconsin and not mentioning the contribution from the GOPAC Electoral Fund, which doesn’t seem kosher to me. And by the way, GOPAC is just one example; there are several other PACs that candidates have misreported about – in part because of the confusion caused by the change in our election law.

I would be remiss if I didn’t mention another shrouding that the election law created. Our old law required that donors over $100 needed to disclose their employer. Now there is no employer requirement whatsoever, just the requirement to list the donor’s occupation. This has led to all sorts of silliness and murkiness.

On the silly side, there were people who listed their occupations as “genius,” “overlord,” “headphone God,” “I’m occupied,” and “never at home Mom.”

And on the murky side, there were more than 8,200 different occupations listed – these from donors who contributed nearly $10.8 million since January 1, 2016 (60 percent of the total given in that period). Many of these are ill-defined, such as “worker” or “businessman.”

And even when they mention their field, like “realtor” or “attorney” or “doctor” or “investor,” the public doesn’t know who they work for – and most urgently for the Ethics Commission, whether their employer may have an interest in legislation or policies promoted by the candidate they are giving money to. The public, and the Ethics Commission, ought to have that information.

Finally, I cannot come to the Ethics Commission in good conscience and not mention what a bad joke it is that corporations are now allowed, for the first time in more than 100 years, to give directly to political parties and legislative campaign committees. Fighting Bob La Follette is getting dizzy today because he’s spinning around so fast in his grave, knowing that his most fundamental reform against corruption in Wisconsin has been wiped off the statute books.

As Ethics Commissioners, this direct corporate influence on our politics ought to concern you.

Thank you for your time.