Prosecutors in a secret John Doe investigation are seeking to find whether recent recall campaigns coordinated their work with groups engaged in so-called “issue advocacy,” according to legal papers filed this week in U.S. District Court in Milwaukee.
The filing suggests such advocacy, which is not regulated because it stops short of expressly advocating for the election or defeat of a particular candidate, must be reported as campaign contributions if it is done at the behest or in concert with a campaign.
“Simply put, contributions to a candidate’s campaign must be reported whether or not they constitute express advocacy,” according to the brief written on behalf of John Doe prosecutor Francis Schmitz and members of the Milwaukee County District Attorney’s Office.
The filing offers the clearest indication yet of the focus of the sweeping five-county investigation.
Despite legal challenges seeking to halt the investigation, two national campaign finance experts said prosecutors are on solid legal ground.
“I think the prosecution is correct that advertising spending coordinated with a campaign and which advances the objectives of a campaign is a contribution to the campaign, whether or not it is express advocacy,” said Trevor Potter, a former chairman of the Federal Election Commission and former counsel to the John McCain and George H.W. Bush presidential campaigns.
“It need not even be speech — lending a campaign cars or office space would similarly be an in-kind contribution because it is something of value to a campaign and received by it,” he said.
Wisconsin Club for Growth and one of its board members, Eric O’Keefe, filed a lawsuit in U.S. District Court in Milwaukee last month contending that the probe was interfering with their free speech and association rights guaranteed under the U.S. Constitution. They are suing some of the John Doe prosecutors, the investigator and judge, seeking a halt to the secret investigation.
The probe focuses on alleged illegal coordination between a campaign or campaigns and conservative political groups including Wisconsin Club for Growth. Citing leaked documents, the Wall Street Journal has reported that it is focused on Gov. Scott Walker’s recall campaign, more than two dozen conservative political groups and Senate recalls in 2011 and 2012.
Some representatives of “issue ad” groups including Club for Growth have contended that they can coordinate with whomever they want — including candidates and their campaigns — so long as they don’t expressly advocate for a candidate’s election or defeat.
These organizations — often called 501(c)(4) groups because of their IRS designation — are exempt from reporting their activities to the state Government Accountability Board.
In its complaint filed last month, Club for Growth described itself as a “social welfare organization that promotes free market ideas and policies ... through public communications and ... associations with other groups promoting conservative policies.”
But according to the brief filed by prosecutors in federal court, the ongoing investigation is aimed squarely at that type of activity if it is directed or done in concert with a campaign or one of its agents.
Prosecutors contend that once those groups work with a campaign, that contribution must be reported the same as any other.
“The fact that a third party runs ‘issue ads’ versus ‘express advocacy ads’ is not a defense to illegal ‘coordination’ between a candidate’s authorized committee and third party organizations,” argued the prosecutors, who are asking Judge Rudolph Randa to throw out the Club for Growth lawsuit.
Brandon Scholz, a longtime Republican political activist who runs an issue-advocacy group called Wisconsin Small Businesses United, said he believes state prosecutors are overstepping their bounds, trying to grab jurisdiction from the IRS, which regulates such groups.
He called the investigation a “gill-net approach” that targets legally protected activity.
“When it comes to free speech and when it comes to issues, it isn’t part of the Government Accountability Board’s or the Federal Election Commission’s jurisdictions,” he said. “They can’t tell you what to say.”
The Government Accountability Board oversees elections and campaign finance in Wisconsin. The FEC enforces federal campaign spending rules.
Paul S. Ryan Sr., chief legal counsel at the nonpartisan Campaign Legal Center in Washington, D.C., where Potter is the founding president, said prosecutors appear to be on sound legal footing. He said the U.S. Supreme Court “draws a very strong distinction between independent activity and coordinated activity.”
If it’s coordinated, Ryan said, “it’s treated as a contribution directly to the candidate subject to any limits or disclosures.”
He noted the case involving Wisconsin Supreme Court Justice Jon Wilcox, who acknowledged in 2001 that his campaign staff had illegally worked with the Wisconsin Coalition for Voter Participation in 1997 to send out $200,000 worth of postcards disparaging his opponent, Walt Kelly, without disclosing the activity. Wilcox’s campaign agreed to pay a $60,000 fine, and Wilcox contributed $10,000 toward the settlement.
“That case makes clear that once coordination occurs, the legal test is whether what comes out of that effort has value to the campaign,” said Ryan.
Ryan said the center is “closely watching” the John Doe investigation because the outcome could have a national impact.
[Editor's note: This story has been updated to reflect a correction. Former Supreme Court Justice Jon Wilcox's campaign committee paid a $60,000 fine for illegally coordinating its efforts with a third-party group. Wilcox donated $10,000 to the committee toward that settlement.]