Out-of-State Corporations Can Pour Unlimited Amounts of Money into Wisconsin Elections
And voters won’t know where the money is coming from
out—it’s going to get worse in the seven weeks leading up to the Nov. 2 general
worst part is that Wisconsin voters won’t know
precisely who is paying for ads promoting or slamming various candidates,
thanks to the U.S. Supreme Court’s Citizens
United decision. Now, corporations can contribute unlimited and largely
untraceable amounts of cash to political organizations.
Prior to the
Supreme Court’s ruling in January, corporations and labor unions could set up
political action committees (PACs) to advance their political interests. But
there was a hitch: Only individuals (typically executives, employees or
members) could contribute, and they could donate a limited amount of money. In
return, all contributions would be made public so voters would know the source
of the PAC’s funds.
But the Citizens United decision changed all
relying on contributions from individuals, corporations can use their own
general treasury funds to contribute unlimited amounts to political groups.
PACs still play by the old rules, though.
at the same time Wisconsin voters will be
bombarded with corporate-sponsored campaign ads, robocalls and fliers, we won’t
know which corporations are making donations, the amount of those donations,
and which groups are receiving those donations.
Donations Are Easy to Hide
had strong campaign finance disclosure laws and clean, transparent government.
Corporate spending on campaigns has been banned since 1905, thanks to reforms
pushed by Wisconsin Gov. Robert (Fighting Bob) La Follette.
corporation still can’t directly contribute to a candidate’s campaign or a PAC. But the Citizens
United decision invalidated bans—at the federal level and in various
states, including Wisconsin—on
corporate contributions to other political entities, such as advocacy groups.
And what about the disclosure of these funds?
Wisconsin statutes, a campaign contribution is
defined as money given for political
purposes, not as money spent for
for-profit corporation can contribute to a political corporation or an advocacy
group and claim that it’s not for election-related activities. But that
contributed money can then be transferred from their general fund to a
political account, which can be used for campaigning.
political shell corporations with bland, inoffensive names are springing up.
Their advantage over PACs is that they can receive corporate treasury funds, in
unlimited amounts, without disclosing the true source of their income.
“All that Wisconsin law requires them to do is to say that they’ve
transferred money from their general fund to their political arm,” said Mike
McCabe, executive director of the Wisconsin Democracy Campaign. “But you can’t
see that the money came from Wal-Mart or Harley-Davidson or some big paper
company or utility.”
Already Funding Preferred Candidates
impossible to tell which business corporations are actively funding Wisconsin campaigns, a handful of political corporations
spanning the political spectrum have registered with the state Government
On the left,
there are groups such as Advancing Wisconsin, Citizens for a Progressive
Wisconsin and Voces de la Frontera. All are based in Wisconsin.
right, there are innocuously named groups such as the Washington, D.C.-based
pro-school voucher corporation American Federation for Children (AFC) Action
Fund, which has been promoting three Milwaukee Democrats in their
primaries—state Sen. Jeff Plale, Stephanie Findley and Angel Sanchez—with
fliers, robocalls and radio and TV ads.
difficult to figure out who, exactly, is funding these entities.
AFC Action Fund’s latest campaign finance report merely shows $50,000 in “other
income and commercial loans” from—you guessed it—AFC. As of this writing, AFC
has spent more than $70,000 on the three races. The AFC board of directors has
links to right-wing corporations like Amway, Wal-Mart and hedge funds, but you
can’t see any direct contributions.
corporation like Amway or Wal-Mart could funnel millions into elections in Wisconsin, but they
won’t show up as the corporate spender,” McCabe said. “The corporate spender
will be American Federation for Children.”
a Progressive Wisconsin is a bit more transparent, though it shows the receipt
of $10,000 from itself, with no other details offered. The group is backing
Milwaukee County Supervisor Chris Larson in his primary challenge to Plale. Its
corporate entity has spent about $9,000 thus far with no disclosure of donors
required, but its PAC—which can only receive money from individuals and must
disclose its donors—has spent roughly $56,000 on the Larson-Plale race, handily
dwarfing its corporate activity.
for the ‘Cover of Darkness’
Of course, a
corporation is free to make political contributions out in the open, without
donating to a benign-sounding advocacy group. But a controversial donation
could create a backlash or boycott, and that would hurt the corporation’s
Kraig, executive director of Citizen Action of Wisconsin, said the “cover of
darkness” serves a corporation’s political purposes.
are very conflict-averse,” Kraig said. “They are large bureaucracies. They are
much less likely to do these things if they think they are going to be exposed
and become controversial. Shame and notoriety deter this kind of activity.”
corporations push the issues that are at the heart of their political activity,
like lowering corporate taxes or privatizing government services.
AFC solely advocates for school vouchers. Yet its pro-Plale mailings promote
his supposed rescuing of jobs at Bucyrus International and support for
BadgerCare. Vouchers are never mentioned.
“A lot of
these groups know that if they focus on their issues, they may even turn a lot
of voters off,” McCabe said. “If they come out and say, ‘This is why we want
this senator elected or replaced,’ most voters might not share those views. So
they craft messages that they think will appeal to the broadest number of
urging lawmakers to strengthen Wisconsin’s
campaign disclosure requirements by expanding the definition of campaign
contributions to include money given or spent for political purposes.
be a game-changer in terms of disclosure,” McCabe said.
Minnesota, for example, strengthened its disclosure
law after the Citizens United ruling.
And that’s how voters and shoppers found out that Target and Best Buy had
contributed to a fund that supported a conservative, anti-gay candidate for
governor. That revelation spurred a backlash and boycott of the firms.
and Best Buy did the same thing in Wisconsin
that they did in Minnesota,
they wouldn’t have to reveal their donations,” McCabe said.
Wondering about the sponsorship of a campaign ad or flier? Mail it to the Shepherd, 207 E. Buffalo St., Suite 410, Milwaukee, WI 53202 or e-mail email@example.com with a description of the ad. We’ll try to trace the origins of campaign materials.