ACS on Dark Money: Who Is Capturing Our Courts (Wisconsin Edition)?

Original research conducted for the American Constitution Society by Lisa Graves and Evan Vorpahl of Illumination Investigations. This blog is part of ACS’s ongoing project to document and explain the impact of dark money on the judiciary. 

A secretive, last-minute influx of campaign cash in the spring 2019 Wisconsin Supreme Court election by right-wing dark money groups could serve as a game plan for these groups and their allies to try to sway outcomes in future contests. Although the sources of these dark money funds are hidden from the public, they are a powerful tool for billionaires to carry out a reactionary agenda. State courts and state legislatures are key targets of such efforts. Defenders of democracy must be vigilant to expose these dark money assaults and demand action to restore transparency and accountability in our campaign finance system to secure fair elections and fair courts.

The 2019 Wisconsin Supreme Court Election

The state of Wisconsin continues to be a battleground with very close elections, including for the Wisconsin Supreme Court. Perhaps because the stakes in Wisconsin’s elections are so high, dark money spending has come to outpace spending by individual candidates themselves. In the best and most recent example of this trend, in 2019 the Republican State Leadership Committee (RSLC) spent more than $1.2 million in last-minute ads in the Wisconsin Supreme Court election to help the controversial Brian Hagedorn beat Lisa Neubauer by less than one percent of the vote, a margin similar to Donald Trump’s win in the state in 2016.

The support from these dark money groups was especially important for Hagedorn (who served as Republican Governor Scott Walker’s chief counsel before Walker appointed him to an intermediate appellate court) after he had apparently lost the support of traditionally conservative groups such as the Wisconsin Realtors Association because of his record of statements many observers considered to be homophobic. According to RSLC, Hagedorn was polling 8 points behind Neubauer, the Chief Judge of the Wisconsin Court of Appeals, who had been appointed in 2007 by Walker’s Democratic predecessor.

Both of these judicial candidates were spending similar amounts in the months leading up to the election, totaling less than $1 million each, with Neubauer spending slightly more to try to win the seat vacated by former Wisconsin Supreme Court Chief Justice Shirley Abrahamson.

Hagedorn and his allies sought to make hay over the fact that former U.S. Attorney General Eric Holder’s National Redistricting Action Fund, a group organized under Section 501(c)(4) of the tax code, had committed $350,000 in outside spending in the race, with its focus on fair maps for legislative districts given Wisconsin’s extreme partisan gerrymandering under Walker. Meanwhile, the Wisconsin-based 501(c)(4) arm of billionaire Charles Koch’s Americans for Prosperity was spending a similar amount on mailers, door knocking, and more. However, Neubauer remained solidly in the lead.

As the Capital Times reported, Neubauer ran a traditional non-partisan style judicial campaign in which “[s]he strove to run on her qualifications, highlighting her support from nearly every judge in the state, her 12 years of experience as an appellate judge and her embrace of a ‘fair, impartial and independent court.’”

But RSLC’s last-minute surge of spending--entirely in the last week before the April 2 election--upended the race, which Hagedorn ended up winning by 5,981 votes. The victory gave the Right a 5-2 margin on the state’s highest court.

The Shape of Things to Come?

The stunning victory made possible by RSLC is even more significant because it is likely to foreshadow the tactics America could see in the 2020 elections: a massive surge in dark money spending at the last minute with hyper-partisan targeting, most of it spent below the radar of the media, in targeted online ads, mailings, and texts, rather than in trackable TV ads.

Hagedorn’s victory is an example of the trend in judicial elections away from the more transparent world of mass marketing and toward the stealthier and almost entirely unregulated universe of micro-targeting. That powerful trend is made even more potent by the capacity of some to spend enormous amounts at the last minute, with little time to detect and respond to the kind of “full-scale, micro-targeted voter education project” that RSLC deployed to secure Hagedorn’s election and the capture of the Wisconsin Supreme Court.

RSLC also represents an emerging hybrid in the dark money arena, because as a“527” political operation under IRS rules, it is required to disclose its donors--but many of its significant donors are dark money groups that do not disclose their donors.

One of the most significant of these dark money groups is the Judicial Crisis Network (JCN). Earlier this year, a Washington Post investigation uncovered how a very small group of super-elite and super-wealthy people are exerting secret influence to capture federal and state courts and advance a far-right agenda to reverse modern legal precedents. As the Post documented, the Federalist Society’s Leonard Leo is closely tied to nearly a dozen small groups—some of them mere shell groups—getting huge sums from secret sources to do PR to aid judicial candidates. JCN is one of those core Leo dark money groups.

JCN has given RSLC at least $5.24 million since 2014, when RSLC launched what it calls the “Judicial Fairness Initiative” (JFI) to spend money in state judicial elections. According to its own site, by launching JFI, “RSLC became the only national political organization focused exclusively on the electoral process of judicial branches at the state level.”

RSLC is required to report to the IRS on how much it gives to its affiliates, like JFI, and RSLC is JFI’s only listed donor. That is, money comes into RSLC from corporations and shadowy non-profits, but the reporting process does not specify all the donors whose funds are transferred to JFI. According to RSLC’s IRS filings, JCN was the largest donor to RSLC in 2018 and is the largest reported donor to RSLC so far in 2019. JCN’s donors are secret except for donations from other Leo-groups or non-profits that have to be disclosed--but those groups’ donors are secret. These transfers amount to a dark money shell game, meant to keep voters in the dark about who is financing the capture of our federal and state courts.

JCN is very focused on Wisconsin. For example, in 2014 JCN gave $1.4 million to a newly created group calling itself the “Wisconsin Alliance for Reform,” or WAR, which went on to spend $2.6 million to support another controversial right-wing candidate for the state Supreme Court, Rebecca Bradley. She’s another controversial Walker-appointee and she won her retention election against Judge JoAnne Kloppenburg. There is no disclosure to the public of where that $1.4 million from JCN came from, but we do know that the vast majority of JCN’s revenue that year came from a single anonymous $21.5 million donation. RSLC also buttressed Bradley’s election with a six-figure ad campaign that year.

Although in 2019 Judge Neubauer’s campaign turned out more voters than Bradley’s opponent in the last Wisconsin Supreme Court race, with the massive last-minute spending by RSLC/JCN in Wisconsin, Judge Hagedorn’s turnout increased over Bradley’s and led to his razor-thin 5000-vote margin.

How the Right Plays the Dark Money Shell Game

What happened in Wisconsin this spring is especially troubling from the standpoint of transparency and accountability. Right-wing operatives and the web of organizations they have created moved large sums of money in a coordinated effort to stage a last-minute advertising blitz and do so in a way that would keep the media and public from discovering who was responsible for the effort.

According to IRS filings, JCN gave RSLC $3.01 million in 2018 and JCN (which also goes by the name the Judicial Confirmation Network in filings) also gave $1 million to RSLC on March 19, 2019, just two weeks before the Wisconsin Supreme Court election. There were no other contested state Supreme Court elections in the country that spring.

After receiving those funds, RSLC then made cash transfers totaling more than $1.2 million to its affiliate focused on judicial elections, JFI.

A week after JCN’s donation, on March 25, RSLC made a required filing with the state of Wisconsin that it had raised zero funds for the Wisconsin Supreme Court race, but that filing only required funding and spending through March 18 for Wisconsin’s spring judicial election. The day of that filing, RSLC purchased a URL for a website called RadicalJudge.org, which was the base of its attack ads to come against the candidate they labeled “liberal Lisa Neubauer.”

In fact, on March 21st, four days before that filing, RSLC had also purchased a website called RuleofLawJudge.com, which it deployed to aid Brian Hagedorn in the week before the election.

But RSLC had actually raised one million dollars from JCN that escaped disclosure requirements. Just a few days before the election, RSLC filed a required 72-hour report stating that it had spent more than $200K, but the form also did not require any disclosure than that it was about to spend a million more.  On April 2--the day of the election--RSLC made the final of its amendments to that report to reveal that it had raised and spent more than $1.2 million in the last two weeks of that election, as voters went to the polls to vote.

There has been no consequence--besides winning the election--to RSLC for how it maneuvered through the timing requirement for its filings with the state of Wisconsin. This illustrates another reason for the need for substantial reforms to the laws governing our elections.

A million dollars is a huge amount for a candidate to raise and spend in the course of a state judicial election. But a million dollars in attack and support ads that all ran in week in a state with cheaper media markets like Wisconsin is like a nuclear bomb of campaign cash. And, of course, as a result of the shell game played by JCN, RSLC, and their shadowy, undisclosed donors, the state’s voters had no way to know who was piloting the stealth bomber that delivered this massive ordinance to influence the election.

JCN was not, however, the only donor to RSLC in the months before the Wisconsin election, although it is known that very few of RSLC’s donors were from Wisconsin. (The Milwaukee Chamber of Commerce gave RSLC $100,000 and the American Transmission Company, which is trying to build huge electrical towers across the state to Illinois, gave RSLC $25,000 this year, for example.)  Because RSLC combines its donations, it is not publicly known which other donors besides JCN, with its focus on capturing the courts, directed funding toward RSLC’s judicial election project in Wisconsin. But RSLC’s known donors are noteworthy, and they have included Koch Industries, The R.J. Reynolds Tobacco Company, casino magnate Sheldon Adelson, the U.S. Chamber of Commerce, and big pharmaceutical companies.

Other RSLC donors are less well known and deliberately so. Take for example this cipher of an organization. In October 2018 RSLC received $350,000 from a newly created Wyoming LLC called “Contract Drafting LLC.” Its address is that of a law firm. There is no indication at all what Contract Drafting LLC is or was. In fact, it appears to be defunct. Did some of that money from some unknown person or corporation in Wyoming get steered toward smearing Judge Neubauer to help capture the Wisconsin Supreme Court? The public will probably never know unless a state or federal regulatory agency either examines RSLC’s activities or the law is reformed to require greater transparency.

Other States and What Is to Come

Wisconsin is not the only state where RSLC is flexing its multi-million-dollar muscle to place corporate-friendly or right-wing judges on state courts in order to advance its funders’ interests. For example, in 2018 RSLC spent $2.6 million in Arkansas, $1.7 million in West Virginia, and over $600,000 in Ohio. And in years prior, JCN and RSLC have exerted their funded influence in judicial elections to numerous states, including Illinois, Michigan, Missouri, Montana, North Carolina, Ohio, Pennsylvania, and Tennessee.

RSLC was created in 2002 but became better known after Ed Gillespie deployed it in 2010 for his “REDMAP” project to help GOP politicians take over state legislatures in order to gerrymander state and federal legislative districts following the 2010 census. That mid-term election was the first election cycle after the U.S. Supreme Court’s controversial and now discredited decision in Citizens United, which unchained non-profit groups from fair election rules adopted by Congress under the Bipartisan Campaign Reform Act, known as McCain-Feingold, and other laws.

RSLC’s REDMAP election activities that year operated alongside a surge of activity by the Kochs’ Americans for Prosperity propping up the Tea Party, which was launched shortly after Barack Obama was inaugurated, as documented by Jane Mayer in her book “Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right.” She described RSLC as "catchall bank account for corporations interested in influencing state laws."

What’s next for RSLC with respect to state court and other elections in 2020? According to IRS filings, JCN continues to be RSLC’s top donor since the beginning of 2018.

Thus, all signs point to more last-minute, hyper-partisan huge cash being spent to capture our courts in 2020 and change the interpretation of laws that determine all of our rights. The thicket of election laws and court decisions in which these secretive megadonors hide while launching their stealth assaults must be eradicated and replaced with a fair system that protects fair courts and requires election activities that are far more transparent and accountable to We, the People.

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