The Intimidation Game (32 page)

The justices and the victims and the victims' lawyers wouldn't find out until much later about these slimy efforts to rig the court hearing. All they knew was that in February 2015, Schmitz filed a motion with the supreme court pushing judges to bow out. Schmitz wanted at least one, and as many as four, of the conservatives to step down on the grounds that they had benefited in their judicial races from issue ads from some of the groups now victims of the Doe.

Wisconsin's code of judicial conduct made for no such allowances. It clearly stated that recusal couldn't be “based solely on the sponsorship of an independent expenditure or issue advocacy communication.” And that's the only type of support the conservative justices had ever received from the groups in question. Schmitz tried to argue that a separate, U.S. Supreme Court ruling ought to hold sway, but the circumstances were entirely different.

In July, it became clear why Schmitz had been so eager to knock off any free-speech court voices. In a definitive 4–2 decision on July 17, 2015, the state's highest court unceremoniously shut down the Doe, slapping the prosecutors six ways from Sunday. “It is utterly clear that the special prosecutor has employed theories of law that do not exist in order to investigate citizens who were wholly innocent of any wrongdoing,” said the court, in an opinion written by Justice Michael Gableman. “In other words, the special prosecutor was the instigator of a ‘perfect storm' of wrongs that was visited upon the innocent [targets] and those who dared to associate with them.”

Walker was among the first to offer a reaction to the decision, and it caused some eye-rolling. He was already running for president, on a campaign stop in New Hampshire. He explained that he'd felt “all along” that the courts would rule on the right side. (There was no mention of his settlement talks.) “As folks in Wisconsin will tell, I've gone through these battles so many times I don't get too up or too down. I'm pretty even-keeled in all this.”

But his state Republicans were energized, at last, and determined to finally do something to rein in both the John Doe statute and the renegade GAB. Some called for an investigation into the body. Some called for a reckoning for the prosecutors who had abused their powers.

Democrats denied that they'd done anything wrong, even as they rejected the decision. Schmitz's request for recusal had allowed the left to claim that the decision was partisan and biased. Common Cause moaned that a “highly compromised” court had just ruled for “unlimited money” in Wisconsin. Democratic legislators refused to acknowledge that the state's finance law was unconscionably vague and that prosecutors had used that to drive a Mack truck through constitutional rights. They instead insisted the court had rewritten the law—a position echoed by GAB. In a sour statement, it claimed that the court's decision “reverses a longstanding interpretation and application of campaign finance law.”

The victims were exultant. O'Keefe's attorneys, Graves Garrett out of Kansas City, noted that Chisholm and the GAB had “violated about one third of our nation's Bill of Rights” with their raids and subpoenas and seizure of material and secrecy and muzzling. Some, like Wisconsin Manufacturers and Commerce, demanded an apology from the prosecutors and GAB regulators. They never got it.

All they did get from Schmitz was the crazy sight, a month later, of his refusal to accept that the court really meant what it said. In a motion in August, the prosecutor demanded a stay of the decision, pending a possible appeal to the U.S. Supreme Court. That appeal is a long shot, since the Wisconsin court decided the case on the basis of state law—an area the Supremes don't usually mess with.

Schmitz surely knew this, and that instantly made victims wonder what he was up to. The answer looked to rest in his accompanying request that the Wisconsin high court also stay its order that prosecutors destroy any evidence collected in the course of its subpoenas—bank records, e-mails, donor names. Schmitz and his team seem to want to hold on to those goods indefinitely. They had after all been very useful up to now.

The John Doe got shut down, but not before the left accomplished many of its goals. It harassed and put in suspended animation most of Wisconsin's conservative movement during a crucial election period. It disclosed donors and pertinent information that could be used to attack and silence the right. It required its victims to spend, collectively, millions of dollars on legal defense—money diverted from advocacy. It subjected individuals to the terror of personal prosecution, wreaking havoc on their livelihoods, their families, their ability to sleep at night. It made them think twice about taking part in the electoral system. This is what intimidation is all about.

The outrage over the tactics, and public concern over government abuse, did at least give Republicans an opening to right a few wrongs. In October 2015, Walker signed a bill gutting the John Doe as a tool for political persecution. The new law outlaws John Doe investigations for allegations of political misconduct. Prosecutors can henceforth only use them for grave and specific lawbreaking—namely violent felonies and some drug crimes—and also must obtain permission from a majority of the state's chief judges to extend probes beyond six months. Secrecy orders now only apply to prosecutors, court officials, judges, and investigators. There are no more gags on suspects or witnesses.

Every Democrat in the Wisconsin Assembly and Senate voted against the measure. Which is another way of saying that Wisconsin liberals went on record in favor of gag orders, predawn raids, limitless warrants into e-mail, phone, and bank records, and the targeting of Americans for their ideology.

The legislature also steamed ahead on campaign finance reform and an overhaul of the GAB. The board's response to the reform only highlighted why it was necessary in the first place. New GAB chair Gerald Nichol accused the state high court of having a “problem with [its] integrity,” claiming all four Republican justices should have recused themselves from the Doe case. The bureaucrat also slammed the court's ruling as a “very poorly written decision.”

Rivkin echoes a point of Don McGahn's: Organizations like the FEC and GAB have their share of partisans. But what creates an environment that allows those partisans to act is a righteous regulatory mind-set. “People wonder what causes a place like GAB: politics or ideology?” he says. “But there's no tension between those two; there's synergy. You have the sheer institutional dynamics. You've got career people that honestly don't care about politics, but do believe everybody cheats and it's their job to make them follow the rules, and to bring even more people under their system of rules. You've also got self-interest and job security thrown in there.

“Then you've got people animated by their ideology, and the reality is that people who are drawn to work for government are disproportionately liberal and have that worldview. They hate money, they hate speech. They may not be partisans themselves, but they create a perfect environment for liberal partisans to do their own thing.”

On December 16, 2015, Walker signed a law getting rid of GAB and replacing it with two commissions—one in charge of ethics, the other in charge of elections. The new bodies are evenly split between parties, and subject to new rules governing due process in complaint and investigation procedures. They are barred from secret investigations with unlimited budgets.

O'Keefe sees parallels with the IRS, and more evidence of the need for strict rules for bureaucracies. “Obama didn't call the IRS up and order it to do anything. He talked, and government employees heard it, and felt compelled to act. And that's what I've discovered here, too. Debate matters, and it formed opinions in the heads of these GAB people, and in the heads of midlevel law enforcement, and they ran with it.”

Prosecutors are among the most powerful agents of government in this country. The Wisconsin district attorneys had a particularly scary law with which to target their enemies on the right. But prosecutors don't need a John Doe law to harass the conservative movement.

The latest officials to join this party have a broader aim. They are liberal state attorneys general, who aren't bothering to concoct some argument that conservatives broke the law or hoodwinked shareholders. They are instead imposing sweeping new disclosure requirements, on the simple grounds that that's what they want. Which they can do as prosecutors. They aren't even hiding what they are attempting to do.

The ringleaders are the attorneys general of two of the country's most liberal states: New York and California. The Empire State's new king of enforced disclosure is Eric Schneiderman, elected to that state's top law enforcement post in 2010. Schneiderman was on board with a thumping IRS campaign against conservative nonprofits. He launched his own inquiry into what the
New York Times
termed the “darkest corner of the campaign world”—nonprofits. By August 2012, Schneiderman had sent requests to dozens of tax-exempt groups demanding they turn over their tax returns and other financial documents. He aimed his probe at conservative organizations like Crossroads and the American Action Network and the American Future Fund, though he made sure to toss in a few liberal outfits to make it look kosher. “The requests appear to be an early but aggressive step by Mr. Schneiderman's office to curtail the intense secrecy enveloping these groups,” wrote the
Times
.

The aggressive aspect of Schneiderman's probe was that he had no pretext—he wasn't making a case that the groups had broken regulations or violated state campaign finance laws. Under New York law, nonprofits that raise money in the state already have to file their federal tax returns and audit reports with the AG's office. This was an exercise in snooping—Schneiderman wanted his own list. And New York was a good place to put one together. Nonprofits are allowed to collect money from around the country, and New York, with its Wall Street millionaires, is a popular place from which to solicit. His letters requested the information, but menacingly reminded recipients that he had subpoena power.

In less than a year, Schneiderman had used his probe to finalize a new regulation requiring nonprofits registered in his state to include in their annual filings their federal IRS Schedule B—a list of names and addresses of their larger donors. Schneiderman based his rule on a reinterpretation of a 2006 New York law, and the claim that he was protecting the New York citizenry from being preyed upon by charities—an argument that had been knocked down in prior Supreme Court cases. The average New York hedge fund manager negotiating a donation to Crossroads is hardly confused about what is happening. Schneiderman also didn't bother to go through the usual process for a regulation, which would require public comment. He imposed it by fiat.

In his press release, the AG bragged that the “‘Dark Money' Groups That Proliferated Since Citizens United Will Be Brought into the Light.” “There is only one reason to funnel political spending through a 501(c)(4), and that is to hide who has bankrolled the effort,” declared Schneiderman. The AG predicted that “New York will serve as a model for other states.” And he proudly boasted that the “disclosures” would be available to “the public.” He graciously suggested that if groups could demonstrate their donors might suffer harm, they could ask for a “waiver” from donor disclosure.

Schneiderman's announcement corresponded almost precisely with the Lerner revelations and a growing conservative awareness that they were under attack. By May 2014, Citizens United—the same group that had inspired the Supreme Court case—had sued Schneiderman in federal court, arguing his regulation infringed on the group's First Amendment rights, and that federal law protecting donor privacy trumped his interpretation. Citizens hired Don McGahn, now at the Jones Day law firm, to represent it. A few months later, the first federal judge to hear the case rejected Citizens' request for a preliminary injunction—but the trial is ongoing.

It's getting a close watch by Kamala Harris, Schneiderman's counterpart in California. The Golden State AG is a Democratic up-and-comer, who is already running for retiring California senator Barbara Boxer's seat in 2016. Harris likes hot-button issues that keep her name in the headlines, and she's made one of them a takedown of conservative nonprofits.

In early 2014, those nonprofits started receiving letters from Harris's office. Nonprofits that operate in California are required to annually file their public IRS 990 tax forms with the AG. In keeping with protections under federal law, most groups file the report but scrub the Schedule B attachment that lists their larger contributor names and addresses. Harris's letter changed the rules of the game. She claimed that these groups' filings with the state were “incomplete” because they didn't include the full donor attachment. She gave them thirty days to cough up the form. Harris claimed that the names would only be subject to scrutiny from within her office, and would not be publicly released.

Brad Smith's organization, the Center for Competitive Politics (CCP), which has operated in the state since 2008, sued Harris's office, arguing that federal law protected those names. It ran through the roster of Supreme Court cases protecting anonymity—
NAACP v. Alabama
and the like. In December, the Americans for Prosperity Foundation filed its own suit, claiming that her demand violated its First Amendment rights and put its donors at risk of ugly retribution. The foundation noted that it had been registered in California since 2001 and had never been forced to give its donors before. Harris, “for reasons known only to her, is nonetheless trying to compel disclosure of the confidential Schedule B by nonprofits around the state,” read the filing.

Harris's office issued a laughable response, claiming the law had always meant what she said, and that Americans for Prosperity had in fact been “out of compliance with the law for a number of years.” The only reason no AG had ever done anything about the “backlog of delinquent charities” was that the department had been “chronically underfunded.” They were now receiving “delayed enforcement notifications.”