Posted on 08/15/2003 5:38:35 AM PDT by ninenot
Madison - Wisconsin unions and businesses gave $1.3 million to a national Democratic Party committee, which then returned much of it to an organization prosecutors say Sen. Chuck Chvala illegally ran to skirt state campaign-finance laws, a new report released Thursday charged.
Using new Internal Revenue Service data, the non-partisan group Common Cause in Wisconsin was able for the first time to list donations from Wisconsin - including $430,000 from the state's largest teachers union - to the Democratic Leadership Campaign Committee in Washington, D.C., before state elections in 2000 and 2002.
Wisconsin contributors gave more to the national committee than any other state and - in a move that Common Cause described as "laundering" - the committee returned $695,470 of it to Wisconsin political groups over a 30-month period.
Of that amount, the report says, $322,000 was sent to Independent Citizens for Democracy, a front group that prosecutors say Chvala used to illegally help fellow Democrats running for the Senate.
The FBI said last month that it was looking into whether the Democratic Leadership Campaign Committee violated federal money-laundering laws in a campaign-finance scheme that led to state felony charges against Chvala.
Wisconsin's campaign-finance laws prohibit corporations from making contributions and have strict limits on how much political action committees and other organizations can donate to campaigns. The law also requires full disclosure of campaign contributions.
Jay Heck, executive director of Common Cause, said those restrictions were put into place in the early 1900s to make sure big business did not have undue influence on elections. By sending the money to the national Democratic committee and having that money returned to Wisconsin, businesses and organizations circumvented the state law, he said.
"The whole idea was that Wisconsin didn't want corporations to be able to continue to buy state government," Heck said. "We have a long-standing practice to keep that kind of money out of politics. This is a way to get that money back in."
Chvala is charged with 19 felonies, including extortion, stemming from a state investigation into corruption in the Capitol. According to the criminal complaint, Chvala told at least one Capitol lobbyist, Michael Bright, that donations to help Democratic candidates made by his clients would be kept "under the radar" if they went "across the Potomac" to the national committee.
Chvala repeatedly told Bright which candidates and political committees the lobbyist's clients should contribute to, according to the criminal complaint filed against Chvala. Chvala, who was Senate majority leader at the time, told groups how much they should contribute before the Senate would act on their legislative priorities, the complaint says.
Through his former chief of staff, Doug Burnett, Chvala solicited donations for Independent Citizens for Democracy and directed the group's ads and other campaign efforts on behalf of Democratic Senate candidates in 2000, prosecutors allege.
Chvala did not return calls seeking comment Thursday, but his attorney, James Olson, said the allegations were "an outright lie."
He said the Democratic Leadership Campaign Committee was a legitimate organization that raised money with the help of Wisconsin Democrats, who made the donations without any guarantee that money would be sent back to the state.
"It certainly was not a situation where money was laundered," Olson said.
But Heck said the national committee "played a particularly insidious role because it seems to have acted as a laundering mechanism for Wisconsin money that otherwise could not have been utilized in state elections."
Calls to the national Democratic Party seeking comment were not returned Thursday.
Heck questioned whether leaders of groups and businesses that sent money to the national committee knew their cash would be returned to Wisconsin campaigns. However, representatives of four of those entities said they stipulated in writing that the money not be returned to state campaigns.
The teachers union, the Wisconsin Education Association Council, "demanded and was given specific assurances that its contributions would not be used for improper purposes, and would not be used in any way in Wisconsin," WEAC Executive Director Michael Butera said in a statement.
"We have no reason to believe that this agreement was violated," Butera said.
Attorney Mike Wittenwyler said three of his clients who donated to the national committee also told the group not to recycle their donations to Wisconsin. The national committee had the "broader purpose" of electing Democratic candidates across the nation, he said.
Wittenwyler represents Madison Gas & Electric, which gave the committee $75,000; an MG&E subsidiary, Wisconsin Development Corp., which gave $50,000; and Ameritech/SBC, which donated $40,000.
Wittenwyler said the national Democratic group used separate accounts to make sure cash from states such as Wisconsin, which do not allow corporations to make campaign donations, was not returned here.
"I have never seen anything that has been able to demonstrate that that money came back" to Wisconsin, Wittenwyler said.
Don Millis, who served on the state Elections Board for four years, said the pre-election cash transfers from Wisconsin and back again, and the scandal that led to charges against Chvala and four other legislators, show that the two state boards created to enforce ethics and campaign finance laws don't do so.
The state Elections and Ethics boards "lack either the ability or desire to go after these things," said Millis, a former Republican appointee to the Elections Board.
Millis said he is working with Heck's group and the non-profit Wisconsin Democracy Campaign on a bill that would abolish both boards and would appoint an independent enforcement officer with authority to prosecute ethics and election law violations.
In addition, Attorney General Peg Lautenschlager said this week that she is creating a new "public integrity unit" in the state Department of Justice to help investigate and prosecute public officials accused of abusing their authority.
The Associated Press contributed to this report.
Money if fungible.
There is a hub and you can follow the Klinton wheel as it passses out its dirty laundry.
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