Daniel Bice, Jason Stein, and Patrick Marley

Milwaukee Journal Sentinel

This story was originally published on Sept. 14, 2016

Madison — Gov. Scott Walker and the GOP-controlled Legislature approved a measure aimed at retroactively shielding paint makers from liability after a billionaire owner of a lead producer contributed $750,000 to a political group that provided crucial support to Walker and Republicans in recall elections, according to a report released Wednesday.

Citing leaked documents gathered during a now-shuttered investigation into the governor's campaign, the Guardian U.S., an arm of the British newspaper, reported that Harold Simmons, owner of NL Industries, a producer of the lead formerly used in paint, made three donations totaling $750,000 to the Wisconsin Club for Growth between April 2011 and January 2012.

Simmons' donations were made before and after Republicans approved two laws helpful to the industry — one in January 2011 and the other in June 2013. The 2013 measure was inserted in a budget bill in the middle of the night despite warnings about its constitutionality.

The documents confirm earlier reports that Walker solicited millions of dollars for Wisconsin Club for Growth, a group then run by R.J. Johnson, one of his top campaign advisers. The Guardian story says Walker was warned in an email about potential "red flags" with Simmons, who died in 2013, including a magazine story that described him as "Dallas' most evil genius."

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Simmons' contributions mirror a $700,000 donation from mining firm Gogebic Taconite to Wisconsin Club for Growth around the same time, a donation that was earlier disclosed in court records. After that contribution, the GOP-controlled Legislature and Walker approved legislation aimed at streamlining regulations for an iron ore mine in northern Wisconsin.

The 1,352 pages of leaked John Doe records provide a window into the case that prosecutors were putting together in arguing that Walker's campaign and conservative groups such as Wisconsin Club for Group were illegally coordinating campaign activity. The Wisconsin Supreme Court shut down the probe last year, finding the prosecutors' case was "unsupported in either reason or law."

Walker's campaign said Wednesday that there was no sign that the Republican governor had done anything wrong but did not directly address the donations from Simmons or the legislation touching on lead paint lawsuits.

"As widely reported two years ago, the prosecutor’s attorney stated that Governor Walker was not a target," said Walker campaign spokesman Joe Fadness. "Several courts shut down the baseless investigation on multiple occasions, and there is absolutely no evidence of any wrongdoing."

Club For Growth attorney David Rivkin said in an email that prosecutors made up crimes that don’t exist and called their attempt to get the case to the Supreme Court “legally frivolous and just another publicity stunt intended to tarnish their targets’ reputations and salvage their own.”

Milwaukee County District Attorney John Chisholm, a Democrat who launched the investigation in 2012, noted in a statement that it is illegal to leak records from a John Doe investigation. Chisholm has been critical of past leaks to the Wall Street Journal that have been favorable to the John Doe targets.

"The public release of this John Doe evidence without court authorization is not merely a violation of the John Doe secrecy order; it is a crime under Wisconsin law," Chisholm said. "As Special Prosecutor Fran Schmitz has done in the past when other secret materials have been publicly disclosed, we support any effort that may be undertaken to determine the source of these newest leaks."

Such an investigation appears possible.

GOP Attorney General Brad Schimel "is currently reviewing the available options to address the serious legal questions raised by the leak and publication of these sealed documents," Schimel spokesman Johnny Koremenos said in a statement.

State Rep. David Craig (R-Town of Vernon) said he wants to form a special legislative committee with subpoena power to look into how the investigation was conducted and the leak of documents. Craig, who is running for state Senate without opposition, helped lead the effort to end the ability of prosecutors to use John Doe investigations to investigate campaign finance matters.

This leak of John Doe documents comes just weeks before the U.S. Supreme Court is to meet in closed session on a petition from prosecutors to revive the investigation.

Prosecutors argue that former state Supreme Court Justice David Prosser and current Justice Michael Gableman should not have been allowed to hear the case because their campaigns benefited from work by some of the groups being investigated.

The Guardian story quotes a Walker email to Karl Rove, a former top aide to President George W. Bush who oversaw a major political action committee, in which the Republican governor credits Johnson and Wisconsin for Growth in the election of Gableman and Prosser. Both justices voted to shut down the John Doe investigation.

"RJ was the chief adviser to my campaign," Walker wrote on May 4, 2011. "He put together the team to flip the Senate three times and the Assembly two times.

"He ran the effort that defeated the first incumbent Supreme Court Justice in decades back in 2008, and Club for Growth-Wisconsin was the key to retaining Justice Prosser."

Since the recalls, Walker and Republicans in the state have sought to shield paint makers from liability in lawsuits involving lead paint, although federal courts have in turn blocked some of those actions from standing.

For instance, in an overnight meeting in June 2013, Republicans on the Legislature's Joint Finance Committee inserted a provision into the budget long sought by the paint industry that was meant to block lawsuits pending against them by 171 children sickened by lead paint.

But in July 2014 a federal appeals court ruled that a lawsuit by one of those children could continue despite the 2013 state law. The boy who suffered lead poisoning can sue a half-dozen major manufacturers of paint used on the Milwaukee house where he lived, based on a theory approved in a controversial 2005 Wisconsin Supreme Court decision, the 7th Circuit Court of Appeals in Chicago ruled.

In an interview Wednesday, the boy's attorney, Peter Earle, said he was "trembling with rage" at the news of the contributions by the industry, saying that they were meant to block claims by "the most vulnerable among us." He said Republican leaders in Wisconsin had benefited from industry money and then acted to try to retroactively block lawsuits by children harmed by lead paint.

"What I see is a corrupt morass of government in Wisconsin that has been fueled by corporate money," Earle said. "How can people have faith in a system like that?"

State Sen. Jon Erpenbach (D-Middleton) said he was shocked by the lead paint company's donations.

"He answers first and foremost to large donors and that's kind of underscored in the lead paint (example)," Erpenbach said of Walker.

He said it was frustrating that the state Supreme Court had concluded prosecutors weren't allowed to look into whether there was a connection between the money from the lead paint industry and legislation helping it. He said conservatives on the state court benefited from their own decision to shut down the investigation into these contributions.

"A majority of the Supreme Court benefited directly from the dark money that flowed into this state," he said.

Walker won his recall election in June 2012, becoming the first governor in U.S. history to do so, and GOP senators faced recalls in both 2011 and 2012.

Three GOP senators faced recalls and then voted on the Joint Finance Committee budget motion in June 2013 that sought to retroactively shield the lead paint industry from lawsuits. Those senators were Alberta Darling of River Hills, the panel's co-chairwoman, Luther Olsen of Ripon, and Sheila Harsdorf of River Falls. None responded to requests for comment.

That controversial motion came at the end of the panel's budget-writing work and, as is common, came in the middle of the night and included a grab bag of special interest moves, including a failed attempt to allow bounty hunters to start work in Wisconsin. The lead paint provision was added to the bill despite a memo from the nonpartisan Legislative Council that warned that the retroactive change would "raise significant constitutional concerns."

Erpenbach said he didn't know if Republicans in the state Senate were aware of the donations to the Wisconsin Club for Growth that helped them in their recall elections, but he expects them to face tough questions about it now.

"Republicans bent over backward to get this (lead paint) legislation through," Erpenbach said.

A spokeswoman for Senate Majority Leader Scott Fitzgerald (R-Juneau) had no immediate comment.

A controversial 2005 Wisconsin Supreme Court decision intensified legal and political fight in the state over who is responsible for paying for those sickened by lead paint in cities like Milwaukee.

The decision in the case Thomas vs. Mallett was written by then-Justice Louis Butler, who was later defeated for re-election, based partly on a backlash by business interests against the ruling.

In 2010, then-U.S. District Judge Rudolph Randa in Milwaukee threw out a young plaintiff's lawsuit on the grounds that the "risk contribution theory" advanced in the 2005 state Supreme Court decision violated the substantive due process rights of the defendants — the makers of lead carbonate pigment. In its 2014 ruling, the U.S. 7th Circuit reversed Randa and let the lawsuit continue.

In December 2011 and January 2012, GOP state Sen. Glenn Grothman was drafting legislation to make immunity from liability lawsuits retroactive. The drafting file for the bill shows that Grothman, now a congressman, and his aides gave drafting attorneys an unsigned memo on the issue that appears to have been written by an outside attorney.

Grothman declined to comment. The proposal failed to pass in 2012, but Grothman was on the Joint Finance Committee when it ended up passing a similar measure in 2013.

The leaked documents were gathered during the secret probe launched by Chisholm.

The investigation focused on whether Walker's campaign had illegally coordinated with the Wisconsin Club for Growth and other conservative groups. The documents released Wednesday once again made clear that the GOP governor was active in raising money for the group.

One donor gave the group $10,000 in 2011, writing on the check's memo line that he made the contribution "because Scott Walker asked."

It was not clear who leaked the documents to the Guardian. Some of them have been already disclosed during various court cases and reported by the Journal Sentinel, among other media outlets, while others have never been released before because they were filed under seal or never showed up in court documents at all.

Special prosecutor Francis Schmitz led the probe, which was conducted under the John Doe law. That law allowed prosecutors to force people to testify and turn over documents, while barring them from talking about the investigation with others.

The probe was effectively halted in January 2014 when the state judge overseeing the investigation found the activities in question were not illegal. Schmitz sought to overturn that finding, while the Wisconsin Club for Growth and two of its advisers brought legal challenges to stop the investigation for good.

Johnson worked for Walker and the Wisconsin Club for Growth at the same time.

The state Supreme Court last year ruled 4-2 against the prosecutors. The court initially determined all evidence prosecutors had gathered had to be destroyed but later told prosecutors they should instead turn it over to the justices. The high court has allowed prosecutors to hang onto it while they pursue their appeal with the U.S. Supreme Court.

Chisholm has asked the U.S. Supreme Court to overturn the decision by Wisconsin's high court to shut down the investigation.

They also want the U.S. Supreme Court to review whether the Wisconsin court got it right when it ruled that candidates have free speech rights to work closely with advocacy groups during their campaigns, according to sources.

Dave Umhoefer, John Diedrich and Bruce Vielmetti of the Milwaukee Journal Sentinel contributed to this report.