In Wisconsin, Dark Money Got a Mining Company What It Wanted

by Theodoric Meyer ProPublica, Oct. 14, 2014, 5:45 a.m.

This story was co-published with The Daily Beast.

When billionaire Chris Cline’s company bought an option to mine a swath of northern Wisconsin in 2010, the company touted the project’s potential to bring up to 700 well-paid jobs to a hard-pressed part of the state.

But the Florida-based company wanted something in return for its estimated $1.5 billion investment 2014 a change to Wisconsin law to speed up the iron mining permit process.

So, Cline officials courted state legislators and hired lobbyists. And, unbeknownst to Wisconsin voters and lawmakers, the company waged a more covert campaign, secretly funding a nonprofit advocacy group that battered opponents of the legislation online and on the airwaves.

Since the Supreme Court’s 2010 Citizens United ruling, which allowed corporations and unions to spend unlimited amounts on politics, hundreds of millions of dollars have flooded into the political system 2014 much of it through nonprofit groups that have no legal obligation to identify their donors.

Usually such efforts remain hidden from view, leaving voters unaware of who’s paying for the gush of campaign calls, flyers and attack ads. But a court filing recently made public by a federal appeals court in Chicago provides a rare look at how so-called “dark money” groups helped one company get what it wanted.

The document shows how, in its push for a new state law, a Cline Group subsidiary gave $700,000 to a conservative nonprofit in 2011 and 2012. That group, in turn, donated almost $3 million in 2012 to a second, like-minded nonprofit that also campaigned to change the mine permit process, tax filings show.

Both nonprofits worked to pass the mining bill. One helped to write the measure and launched a radio campaign even before it was introduced. The other tried to pressure a Republican holdout. Together, the two groups played a critical role in defeating a freshman Democratic state senator who’d voted against the bill, paving the way for its passage months later.

After the 2012 elections, some observers downplayed the impact of dark money groups after most of the candidates supported by the largest one, Karl Rove’s Crossroads GPS, lost. As this year’s elections approach, the Cline Group’s strategy in Wisconsin reveals the much bigger impact such groups can have in state races. Here their money goes much further, in some cases dwarfing the amount candidates themselves spend on their campaigns.

The nonprofits that pushed for the mining law 2014 the Wisconsin Manufacturers & Commerce Issues Mobilization Council (WMC), an arm of the state’s largest business lobby, and the Wisconsin Club for Growth 2014 declined to comment for this story. On its website, the WMC states “we have never disclosed our donors, and never will.”

Neither nonprofit reported spending any money on politics on their 2012 tax returns, potentially violating Internal Revenue Service rules, experts said.

In an interview, James Buchen, a former WMC vice president, said the group’s efforts on behalf of the mining bill were no different from its support of other pro-business legislation. “Our interest in this was trying to create an environment where someone was interested in coming and mining in the state,” said Buchen, who left in 2012 to start a lobbying practice.

A spokesman for Gogebic Taconite, Cline’s Wisconsin subsidiary, did not respond to requests for comment.

Still, documents and interviews show that Gogebic’s money secretly made its way into the political battle over the mining law 2014 and that the efforts of the WMC and the Wisconsin Club for Growth significantly swayed the results.

With the help of ads funded by the two groups, the GOP retook the state senate in 2012 and passed mining legislation similar to what the company had wanted.

Sen. Dale Schultz, R-Richland Center, the veteran legislator targeted by one of the groups, said Gogebic’s efforts to hide its influence went beyond anything he’d witnessed since his election to the state assembly. “I’ve never seen anything like this done by special interests in Wisconsin in 32 years,” he said.

The battle over the mining bill began in 2011, months after the Cline Group announced plans to apply for a permit to build an iron mine in the Penokee Hills of northern Wisconsin, not far from the Lake Superior shoreline. Gogebic began working with two Republican state legislators on a bill to speed up the process of securing a permit, the Wisconsin State Journal reported. Without the legislation, a Gogebic official told the paper, the company “would have to re-evaluate” whether it wanted to build the mine.

Changing the law was an easy sell for many Republican lawmakers. Gov. Scott Walker, a recently elected Republican, had pledged to create 250,000 jobs in his first term, and attracting a mining company to the state would be a step toward that goal.

The WMC, which lobbies for pro-business legislation, was a natural partner for Gogebic.

With a coordination that one lawmaker found suspect, the WMC had glossy brochures supporting a draft of the bill ready to distribute almost immediately after it became public in May 2011.

“I wonder how they did that so quickly when this is a bill that I just saw for the first time,” said Rep. Janet Bewley, D-Ashland, in an interview with Wisconsin Public Radio at the time. Bewley represents the area where the mine would be built and later voted against the legislation.

Weeks later, the WMC started running radio ads touting the bill, even though it still hadn’t been formally introduced.

Gogebic and the WMC, according to media reports and interviews, played a key role in shaping the language of the bill. Shortly after it was introduced in late 2011, the Milwaukee Journal Sentinel reported it had been written by five Republicans in close consultation with Gogebic and the WMC. In an interview, Buchen said several groups, including Cline and the WMC, gave input on the bill. But one Republican lawmaker, who requested anonymity to speak candidly, acknowledged that “the initial bill that came out was for the most part written by” the mining company.

The bill sailed through the Republican-dominated state assembly in January 2012, but lobbyists for Cline and the WMC knew the senate would be a tougher sell. So, they turned their focus on the GOP senator who seemed most likely to vote against it: Dale Schultz.

A former University of Wisconsin rower, with thinning hair and a mustache, Schultz, 61, represents an independent-minded district west of Madison. He’d endorsed Walker early in his run for governor in 2010, and maintained a conservative voting record. The WMC had even given him one of its “Working for Wisconsin” awards, honoring him for his “pro-jobs voting record” in the 2011-2012 legislative session. But by the time Schultz won, one staffer said, the WMC was so displeased he wasn’t supporting the mining bill that it skipped the usual photo-op and dropped off the plaque in a plastic bag.

Schultz agreed that mining regulations should be streamlined. But he’d seen how lead mining had so polluted Brewery Creek in his district that it ran red for decades after the mines had shut down.

“I understood the consequences of mining done poorly,” Schultz said.

Gogebic

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