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Exclusive: Koch Brothers’ Dark Money Flowed into Wisconsin Recall Fight

Group busted in California gave serious money to Wisconsin Club for Growth

Nov. 13, 2013
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In October, two dark-money groups connected to right-wing billionaires Charles and David Koch were ordered to pay the largest campaign fine in California history for funneling undisclosed money into two ballot initiative campaigns.

The organizations—the Center to Protect Patient Rights (CPPR) and Americans for Responsible Leadership—will pay a $1 million fine and send $15 million to California’s general fund for failing to disclose their contributions to the 2012 ballot initiatives.

But the story doesn’t end there.

According to multiple reports, the committees are part of a national right-wing network of groups—some or most of them connected to the Koch brothers—that exist solely to funnel money from faceless group to faceless group, money-shuffling that grants enhanced anonymity to donors.

“It seems like this goal of this is to help disguise donors, to blow some smoke around the dark-money groups,” said Brendan Fischer, staff counsel for the Madison-based Center for Media and Democracy, which has investigated dark-money groups in Wisconsin and nationwide. “These conduit groups basically provide donors with extra protection and allow them an extra layer of anonymity. Instead of the donors being listed as David Koch or Charles Koch, the donor will be the Center to Protect Patient Rights.”

These tax-exempt nonprofit “social welfare” groups must only report to the Internal Revenue Service (IRS) which organizations they send money to; they aren’t required to report their donors.

In addition to giving big to the California campaigns, the Center to Protect Patient Rights channeled money into a major supporter of Wisconsin Gov. Scott Walker.

The IRS documents of the Phoenix-based, Koch-connected CPPR show that it donated $225,000 to the Wisconsin Club for Growth, one of the major opponents of the recalls of Walker and a handful of Republican state senators.

Wisconsin Club for Growth, run by Walker’s former top campaign aide R.J. Johnson, was the first group to run pro-Walker ads in 2011, after the new governor announced his plan to gut collective bargaining rights of public employees.

The group reported raising $12.5 million in 2011, its most recent tax filing on record.

Wisconsin Club for Growth, some believe, may be a target of a special prosecutor in Wisconsin conducting a new John Doe investigation of conservative interest groups active in the 2011 and 2012 recalls. The other organizations believed to be part of the new John Doe are the Koch-founded Americans for Prosperity and the Republican Governors Association.

Fischer said the link between CPPR and Wisconsin Club for Growth is “really significant.”

“It raises all sorts of questions about what sort of money laundering was happening in Wisconsin or what role Wisconsin groups played in a potential money-laundering scheme,” Fischer said.

The Wisconsin Club for Growth did not respond to the Shepherd’s request to comment for this article.


Wisconsin Club for Growth’s Koch Money

Don’t expect to find the sources of Wisconsin Club for Growth’s substantial war chest to be disclosed on its IRS filings. They can only be found by picking through the tax forms of the group’s likely donors and finding the contributions on the source’s filings.

A Shepherd investigation into Wisconsin Club for Growth’s funding sources found that shadowy national right-wing groups donated to the organization during the recall fight.

They include:

Center to Protect Patient Rights: Little is known about this Arizona-based conservative front group headed by the Koch-connected Sean Noble, but, as mentioned above, it donated $225,000 to the Wisconsin Club for Growth in 2011 and Noble’s blog posted flattering messages about Walker, who survived a recall the year after CPPR made its donation.

The organization paid a record-setting fine in California for not disclosing its funders.

The Wellspring Committee: National Public Radio and the Center for Responsive Politics recently investigated this dark-money group run by Ann Corkery, which mixes conservative politics and religion. It’s funded right-wing groups such as Americans for Prosperity, the Faith and Freedom Coalition and Wisconsin Manufacturers and Commerce. In 2011, the group sent $400,000 to Wisconsin Club for Growth.

Faith and Freedom Coalition: This Georgia-based issue advocacy group is headed by former Christian Coalition chief Ralph Reed and, according to the Center for Media and Democracy, has close ties to the Koch brothers’ Americans for Prosperity. The national Faith and Freedom Coalition gave Wisconsin Club for Growth $60,000 in 2011.

Its Wisconsin chapter is headed by Jesse Garza, a former political consultant and St. Croix County Republican Party chair. According to its website, the Wisconsin arm held a national tele-conference with Walker and 12,000 “faith-centered voters” in support of his campaign in the recall election. It also “coordinated a targeted door-to-door lit drop that reached 25,000 contacts in key Senate districts where Republicans were being recalled, recorded statewide [get-out-the-vote] robo calls” and urged faith-based voters to “get out [of] their pews and vote.” The website states, “The total campaign reached over 600,000 voter contacts statewide and in the end Governor Walker and three of the four senators held their seats.”

The State Government Leadership Foundation: This Virginia-based group, launched in 2003 by corporations including Exxon, Pfizer and Time Warner, first got involved in Wisconsin politics during the 2011 recalls, according to the Wisconsin Democracy Campaign, when SGLF ran ads against Democrat State Senator Jim Holperin in his recall election. It also sent $50,000 to the Wisconsin Club for Growth that year. A ProPublica investigation found that the group “paid for Republican redistricting consultants to draw new congressional district maps in North Carolina. The resulting gerrymander helped flip the state’s congressional delegation to Republicans.” ProPublica found that it was involved in pro-Republican redistricting in other states as well.

Walker’s former campaign spokeswoman, Jill Bader, is SGLF’s current spokeswoman. Bader and Wisconsin Club for Growth’s R.J. Johnson were among Walker’s campaign staffers who were copied on Milwaukee County-related emails, including the messages sent in the immediate aftermath of the 2010 O’Donnell Park tragedy.

Wisconsin Manufacturers and Commerce Issue Mobilization Council: This is the political arm of WMC, the state’s big business lobby, which has run $17.9 million in issue ads since 2006, according to the Wisconsin Democracy Campaign. Its tax filings show that it gave $988,000 of its $3.8 million war chest to Wisconsin Club for Growth in 2011.

Other recipients of WMC’s donations include the Michigan-based American Justice Partnership, “a legal reform group that stands up to greedy trial lawyers,” its website states. In 2010, WMC gave AJP $865,000; AJP turned around and spent an estimated $600,000 on phony issue ads in the 2010 Wisconsin elections. Recipients of WMC money in 2010 also include the conservative lobbying group Americans for Limited Government ($47,600), the national voucher group American Federation for Children ($17,000) and the Koch-connected Americans for Prosperity ($10,000).

Wisconsin Bankers Association: This trade group representing Wisconsin’s banks gave Wisconsin Club for Growth $125,000 in 2010 and $78,600 in 2011. The WBA has also sent money to WMC’s political arm ($163,000 in 2010 and $50,000 in 2011) and the voucher group American Federation for Children ($10,000 in 2010).


Club for Growth Funded Shadowy Groups

Although Wisconsin Club for Growth was a top ad sponsor in the 2011 and 2012 recalls, it also gave big to groups that seem to only exist to sponsor ads and pro-Republican campaigns.

As the Shepherd reported last week, in 2011, Wisconsin Club for Growth gave $4.2 million to the newly launched Citizens for a Strong America, which operates out of a post office box in Columbia County, in central Wisconsin. Fischer’s research at the Center for Media and Democracy found that CSA is a new incarnation of the Coalition for America’s Families, which ran such inflammatory ads that TV stations refused to air them. A major funder was Terry Kohler, 1982 Republican candidate for Wisconsin governor and a right-wing political activist. CSA’s treasurer is R.J. Johnson’s wife, Valerie; one of its directors is John Connors, a former county and campaign intern for Walker and an Americans for Prosperity operative. (See “The New John Doe Investigation: Is the right-wing money machine a target?” at expressmilwaukee.com.) CSA, a major supporter of conservative state Supreme Court Justice David Prosser, ran a “pants on fire” ad attacking his opponent during his 2011 re-election campaign. Wisconsin Club for Growth appears to be the only source of funding for CSA. Voice messages the Shepherd left with CSA were not returned.

CSA, in turn, sent $235,000 to United Sportsmen of Wisconsin, an allegedly pro-hunting group that is very active in right-wing politics unrelated to anything to do with sportsmen. The group sent out phony absentee ballot applications during the summer 2011 recalls. It also received a $500,000 state grant in 2013, added to the state budget by the Republican majority, which was later rescinded after its political connections to high-ranking Republicans and Americans for Prosperity were revealed. United Sportsmen’s tax filings were not found in any databases, and it hasn’t responded to the Shepherd’s request to provide the documents, as they are required by law to do. The group is linked to CSA’s John Connors.

“We already know that Americans for Prosperity, David Koch’s tea party group, spent at least $10 million in Wisconsin elections,” Center for Media and Democracy’s Fischer told the Shepherd. The new revelations about CPPR “reveal additional questions about how much more Koch money actually flowed into Wisconsin’s recall elections that was never disclosed.”



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