This U.S. Supreme Court ruling opened a loophole in Wisconsin campaign finance law now used by the ultrawealthy to bypass legal limits and send huge sums of cash to political candidates.
Photo by Fred Schilling, Supreme Court Curator’s Office.
By Peter Cameron, THE BADGER PROJECT
So far this year, three different people each have donated more than $2 million to a political party in Wisconsin.
Karla Jurvetson, a Silicon Valley-based liberal donor, has given more than $2.8 million to the Wisconsin Democratic Party in 2020, according to campaign finance records. J.B. Pritzker, the Democratic governor of Illinois, has poured in nearly $2.5 million. And Diane Hendricks, the richest self-made women in the country who lives in the Beloit area, has given nearly $2.5 million to state Republican Party this year.
Before 2015, the total any single person could have given in annual political donations in Wisconsin was $10,000.
That’s it.
What changed? A monumental 2014 U.S. Supreme Court decision you’ve probably never heard of: McCutcheon v. FEC.
The Citizens United case, a 2010 U.S. Supreme Court decision that allowed corporations and unions to make unlimited independent expenditures in elections, is a household name. And an infamous one to many.
But in Wisconsin, “McCutcheon had a much greater impact than Citizens United did,” said Mike Wittenwyler, a Madison-based lawyer who has specialized in political law for the last two decades.
Money has flooded into the war chests of candidates for state office, even lower offices like state legislators, in huge amounts never seen before the McCutcheon decision. That cash , in turn, pays for political ads that saturate the airwaves and fills mailboxes with fliers.
The McCutcheon decision ruled that limiting individuals on how much they could make in political donations in a 2-year election cycle was unconstitutional.
Prior to that ruling, Wisconsin law set an annual cap of $10,000 on all political donations from individuals. It didn’t matter to whom or to what you gave, once you hit $10,000, you were done for the year.
The popular expression in Wisconsin donor circles was, ‘I’ve maxed out,” recalled Matt Rothschild, executive director of Wisconsin Democracy Campaign, a nonprofit which tracks campaign finance spending in the state.
“There is no way to max out now in Wisconsin,” he added. “It’s gone the way of the passenger pigeon.”
McCutcheon did that. In a 5-4 decision four years after Citizens United, the U.S. Supreme Court ruled that aggregate limits on campaign donations are a violation of the First Amendment.
In cases before McCutcheon, the Court had ruled that restrictions on political contributions can, but don’t always, violate the First Amendment.
“Congress may target only a specific type of corruption—‘quid pro quo’ corruption,” Chief Justice John Roberts wrote in the Court’s opinion on McCutcheon.
Unrelated to the McCutcheon decision, legislators also loosened other campaign finance laws, including doubling the limits on direct donations to state candidates. The new law, for example, increased the maximum an individual could give to a candidate for Wisconsin governor or attorney general from $10,000 to $20,000. By comparison, the limit on donating to a candidate for U.S. president is $2,800.
That interpretation saw limits on one person’s political donations in a 2-year timeframe as unconstitutional, given no direct quid pro quo exists. However, the decision did reaffirm that caps on donations to individual politicians are constitutional — the logic being that a donor could ask for, or expect something in return, from the candidate.
Rick Esenberg, president of the Wisconsin Institute for Law and Liberty, a conservative law organization, said he supports “the constitutional principle involved.”
“I think it’s a violation of the First Amendment to tell people that there are only so many candidates they can support,” he said.
In 2015, one year after the McCutcheon decision, then-Wisconsin Gov. Scott Walker and state Republicans, who controlled the state legislature, removed the now-unconstitutional aggregate limits from state law.
Unrelated to the McCutcheon decision, legislators also loosened other campaign finance laws, including doubling the limits on direct donations to state candidates. The new law, for example, increased the maximum an individual could give to a candidate for Wisconsin governor or attorney general from $10,000 to $20,000. By comparison, the limit on donating to a candidate for U.S. president is $2,800.
In addition, McCutcheon eliminated limits on donations from individuals to political parties in Wisconsin, and on parties to candidates. The $10,000 aggregate limit had served as the state’s ceiling there, because no other limit was, or now is, in place in regards to political parties. Post-McCutcheon, donors can give as much as they want to political parties.
And some have.
Races for state senate and state assembly, jobs that pay $53,000 per year, are seeing more than $1 million raised by the two competing candidates. Campaign finance numbers to state races exploded after the McCutcheon decision and subsequent law changes. Much of that new cash is coming from the unleashed political parties and their megadonors.
Nothing prevents limits on donations to and from political parties, but the Republican-controlled legislature declined to do so in 2015, Rothschild said.
Until 2020, Republicans had been a greater beneficiary of the change. Hendricks, founder of ABC Supply, Elizabeth Uihlein, founder of the shipping supplies company ULINE and Marlene Ricketts, whose family started Ameritrade and now owns the Chicago Cubs, each gave more than $1 million to the Wisconsin GOP in 2018.
“It’s been a gift from heaven for Republicans,” Rothschild said.
But 2020 has seen a tsunami of donations from liberal donors in Wisconsin, likely motivated by President Donald Trump, as well as state Democrats’ attempt to prevent Republicans from winning supermajorities in the state legislature that would allow them to override Gov. Tony Evers’ veto power.
Also, in 2019, Democrats introduced a bill that would limit donations to and from political parties, but it died a quiet death in the Republican-controlled legislature.
That leaves in place, for now, a campaign finance system that places no limits on donations to and from parties.
Billionaires like Hendricks have really taken advantage. She has donated big to state Republicans most election years, including nearly $2.5 million this year and another $2 million in 2018.
“Who can do that in Wisconsin?” Rothschild said. “That is just leaving 99% of the electorate off the playing field.”
Politics after the McCutcheon decision, he added, “has largely been the plaything of the super-rich. More so than ever.”
The Badger Project is a nonpartisan, citizen-supported journalism nonprofit that focuses on Wisconsin state government and politics.