Will John Doe prosecutors launch lengthy probe against Trek Bicycle?

M.D. Kittle
|
Jul 22, 2014 1:42 PM
Will John Doe prosecutors launch lengthy probe against Trek Bicycle?
Part 97 of 97 in the series Wisconsin's Secret War

By M.D. Kittle | Wisconsin Reporter

MADISON, Wis. — The Republican Party of Wisconsin on Tuesday filed a formal complaint with the state’s election and campaign watchdog accusing Trek Bicycle Corp., owned by the family of Democrat gubernatorial candidate Mary Burke.

The GOP accuses Wisconsin-based Trek of using corporate dollars to aid and defend Burke’s campaign.

On Sunday, Trek ran a full-page advertisement in the Milwaukee Journal Sentinel to “attack Governor (Scott) Walker and reinforce Mary Burke’s longstanding talking points,” the GOP charges. Similar ads reportedly ran in other newspapers in Wisconsin.

The Republican Party estimates the Milwaukee Journal ad to have cost the company more than $22,000.

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CAMPAIGN QUESTION: The Republican Party of Wisconsin has filed a complaint with the state Government Accountability Board alleging that Trek Bicycle Corp. violated campaign law by paying for a letter, published in the Milwaukee Journal Sentinel, responding to campaign ads attacking Trek family member and Democrat candidate for governor, Mary Burke. The complaint begs the question, will a lengthy John Doe investigation ensue?

The problem, according to the complaint, is that under Wisconsin campaign finance laws, corporations cannot make contributions to candidate committees.

“Pursuant to Wis. Stat. 11.38(1)(a), no corporation may make a direct or indirect disbursement to a candidate,” the complaint notes.

Disbursements are read to include payment for communications for a political purpose by means of newspapers or other periodical material.

“Trek contributed in-kind contribution of $22,560 in corporate funds to Mary Burke campaign,” the complaint alleges.

The question is will the state Government Accountability Board and Milwaukee County District Attorney John Chisholm launch a multi-year John Doe investigation into the matter, as they did into conservative organizations on a now-debunked theory of illegal coordination?

Campaign finance law expert Rick Esenberg said Trek, as a corporate citizen, has a right under the U.S. Supreme Court’s landmark Citizens United ruling to spend its corporate dollars on express or issue advocacy, although there may be a question in this instance whether they may be subject to campaign finance disclosure requirements.

“If I were a person inclined to the position of those prosecutors in the (John Doe) case, I would be concerned that this (ad expenditure) is coordinated with the Mary Burke campaign,” said Esenberg, founder, president and general counsel of the Milwaukee-based Wisconsin Institute for Law and Liberty.

“…(T)here is certainly as much reason to suspect coordination there as there is with respect to any of the facts known to us involving the Wisconsin Club for Growth” and Walker’s campaign, Esenberg added.

For nearly two years, Chisholm, a Democrat, his assistant DAs, Francis Schmitz, a court-appointed special prosecutor, and another investigator from the Government Accountability Board, have been secretly investigating the Wisconsin Club for Growth and several other conservative groups. They assert the organizations may have illegally coordinated with the Walker campaign during Wisconsin’s partisan recall election, insisting that issue ads by the groups amount to in-kind contributions to campaign.

That is a theory that has been dismissed by the current judge presiding over the John Doe investigation and, more recently, the federal judge in a civil rights lawsuit brought by Wisconsin Club for Growth and one of its executives, conservative activist Eric O’Keefe, against the prosecutors.

U.S. District Judge Rudolph Randa in May issued a preliminary injunction, shutting down the investigation and calling the prosecutor’s theory “simply wrong.” A portion of the ruling is now being appealed before the 7th Circuit U.S. Court of Appeals.

“Clearly GAB does think coordination is a contribution,” Esenberg said of the arguments raised in court documents concerning the probe that is, by law, bound by a secrecy order.

A spokesman for the GAB could not be reached for comment Tuesday.

The Burke campaign did not immediately return a request for comment.

Trek spokeswoman Marina Marich told the Associated Press that the newspaper ad was legal under state law and was constitutionally protected free speech.

“Trek is disappointed to see yet another attack on it by Governor Walker’s campaign,” Marich told AP.

Conservatives in the civil rights lawsuit, too, assert, their activities were constitutionally protected free speech.

Chisholm repeatedly has declined requests for comment.

In his “letter to Wisconsin,” Trek executive John Burke writes, “Governor Walker’s campaign recently ran an inaccurate political ad about Trek,” which has compelled Burke to “set the record straight.”

The Wisconsin GOP contends that John Burke’s statements about Trek “mirror the public statements” expressed by candidate Mary Burke.

The ad takes on assertions by the GOP that “Mary Burke accumulated her wealth by profiting from a company that outsourced Wisconsin jobs to places like China.” It does not mention Mary Burke, nor does it note support for or opposition to a candidate.

“Trek should not be used as a support vehicle against fair attacks, and we ask that the Government Accountability Board ensure that Trek immediately cease using corporate dollars to influence this election,” said Joe Fadness, executive director of the Republican Party of Wisconsin, in a statement.