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Murky campaign-finance laws depend on 'honor system,' expert says

By   /   July 9, 2012  /   No Comments

By Ryan Ekvall | Wisconsin Reporter

MADISON – The recall elections may be over, but the campaign money remains.

Wisconsin law, it seems, gets a little murky about how that money can be used.

Enforcing the guidelines can be difficult, if not impossible, one campaign finance expert says.

“It’s the honor system at work, and that is of concern,” said Mike McCabe, executive director of the Wisconsin Democracy Campaign, a liberal-leaning organization that tracks election spending in the state.

Gov. Scott Walker celebrates his recall-election victory June 5.

The amount of money spent in this summer’s recall six elections, including the election involving Gov. Scott Walker, was unprecedented.

Walker alone raised an eye-popping $37 million since January 2011.

Under Wisconsin law, individuals or political action committees can contribute up to $10,000 in any one campaign cycle.

But the law specifically exempts incumbents who are the target of recall efforts from those caps. So, Walker and the other incumbents were allowed to accept unlimited donations to pay for recall expenses.

But once a recall election is ordered, the campaign-contribution limits return.

Here’s where it starts to get cloudy.

According to the Government Accountability Board, incumbents could raise money above and beyond the caps, even after recall elections were ordered, as long as that money paid for expenses incurred before the elections were ordered.

So even after the March 30 recall certification date, Walker was able to rake in $25,000 here, $50,000 there – so long as contributions above the $10,000 limit went toward recall expenses.

In the weeks leading up to the June 5 recall election, Walker received 11 individual contributions in excess of $10,000 — totaling $375,000.

Richard Pieper, chairman of PPC Partners Inc., a Milwaukee-based electric and construction company, wrote the Walker campaign a $100,000 check May 27, 10 days before election day.

Walker’s campaign can allocate the money toward recall-related expenses incurred between the mid-November and March 30, when petitions were being gathered, counted and certified.

“The key is, ‘unlimited’ is related to the petitions and signatures period. Once we ordered an election, it’s a special election period. (The Walker campaign) incurred all these expenses through March 30, when the board certified the election. They incurred quite a few expenses and were allocating money they raised right up to election day and possibly today,” said Richard Bohringer, the GAB’s campaign auditor.

It may help to think about recall-related campaign expenses as two separate entities — one for opposing the recall effort and the other for running a regular campaign.

Contributions exceeding $10,000 can only go toward expenses opposing the recall, regardless of when they came in.

The problem is campaign finance watchers say it’s difficult to track how that money is spent.

“As long as there’s a recall expense that hasn’t been paid, the Walker campaign could solicit donations larger than $10,000 to pay for that expense,” McCabe said. “There’s no way for any member of the public or the media to look at campaign finance reports and see if an expense was incurred before March 30 and hadn’t been paid yet.

“There’s just no way to tell that based on the campaign finance report,” he said.

Indeed, recall-related expenses continue to appear on campaign finance reports.

Between May 22 and June 27, Walker’s campaign reported $72,517 as recall-related expenses. All three transactions were dated after the June 5 election.

“All the activity appears to have blessing of the GAB,” McCabe said. “There’s no documentation GAB will provide us that would offer any proof that all this is on the up and up. There’s not the kind of transparency and accountability there ought to be.”

The GAB indicated that, as the body that oversees the state’s elections it has internal mechanisms for reviewing campaign-finance reports.

“I don’t know that we’re prepared to say what reports we audit or how many will be audited,” said Mike Haas, staff counsel at the GAB. “There are two ways for us to review that. One is for us to do an audit of a campaign’s report; the other is if we receive a complaint that triggers reviewing the report. “

Haas said those audits and complaints are kept confidential until the board makes a decision or makes a formal request to the District Attorney’s office.

The ongoing debate over the Senate District 21 recall may highlight another quirk in recall-related campaign finance law. Incumbent Republican Van Wanggaard of Racine requested a recount of the election in which he appears to have lost to Democrat John Lehman.

The Milwaukee Journal-Sentinel reported Monday that Wanggaard can continue raising unlimited campaign funds if he seeks a lawsuit challenging the outcome of the election.