Kavanaugh is accused of embezzling at least $42,232 in donations intended to benefit paralyzed veterans and the children of Wisconsin service members killed in action. The funds came from money donated to Walker's office for the annual Operation Freedom event. It also came from the Thomas J. Rolfs Family Foundation, MOPH and then-state Rep. Mark Gundrum, who donated part of his legislative salary in 2008 while deployed abroad, according to the criminal complaint.

William F. Hustad, Wisconsin MOPH department commander, said Kavanaugh has not been involved with the organization since the controversy first came to light.

"He was asked to leave, is the best way to put it," Hustad said. "At least until all of this is worked out."

Said Gundrum, now a judge on the 2nd District Court of Appeals: "My wife and I are just saddened that at least a portion of the money we donated to aid veterans wounded in war appears as if it may never have been used for that purpose."

Walker 'very disappointed'