The Wisconsin state elections board and Milwaukee County District Attorney's office have revealed a money laundering scheme involving illegal contributions to Scott Walker's campaign committee by the head of Wisconsin & Southern Railroad Company.

The months-long investigation found that William Gardner, the CEO and president of Wisconsin & Southern Railroad (WSOR), instructed employees to make political campaign contributions for the 2010 elections and then reimbursed those donations from WSOR's corporate account. Through this money-laundering scheme WSOR spent a total of $53,800 on political contributions in the 2010 election cycle, vastly exceeding the $10,000 per person (or per corporation) limit required by Wisconsin law; Gardner used corporate funds to reimburse 11 contributions from himself, his girlfriend, his daughter, and several employees. The majority of that spending, nearly $50,000, went towards the Friends of Scott Walker campaign committee.

Hell Hath No Fury...

The investigation began in May 2010 when the railroad CEO's ex-girlfriend informed GAB attorney Michael Hass that Gardner asked her to donate $10,000 to Walker in her name, but with Gardner's funds. The subsequent investigation uncovered several years, and tens of thousands of dollars, of Gardner's election misdeeds. Gardner cooperated with the joint investigation by the Wisconsin Government Accountability Board (GAB) and the Milwaukee DA's office, with the GAB imposing a $166,900 fine (the largest in state history) and the DA granting no jail time in exchange for Gardner pleading guilty to two felony charges [3].

At a press conference announcing the settlement, the GAB's Ethics & Accountability Division Administrator Jonathan Becker said that the Walker campaign had not been charged with wrongdoing, but also that a citizen had informed the Walker campaign about the illegal contributions during the 2010 election cycle. Becker stated "it would be nice" if campaign committees notified the GAB when they receive word of election improprieties, but that "there is no statutory requirement to report."

GAB Director Kevin Kennedy also noted that WSOR "has received millions in grants and loan subsidies from the state." For example, last month Walker awarded Gardner's railroad $14 million to maintain or upgrade freight rail infrastructure, and the DA's complaint quotes the company's chief financial officer saying state money is "essential" to the railroad. However, the investigation did not uncover any evidence of a quid pro quo.

What Did Walker's Campaign Know?

The investigation did not charge Walker's campaign with having actual knowledge of Gardner's illegal activities, but according to the DA's complaint, Walker's campaign was well aware Gardner was raising funds for Wisconsin's current governor.

Walker's campaign established a separate "Bill Gardner Commitment" category for contributions he coordinated, and acknowledged in emails that he planned to raise $30,000 in 2009, and possibly as much as $100,000 in 2010. The campaign also contacted Gardner directly after his ex-girlfriend issued a "stop payment" on the $10,000 contribution he had requested and paid for.

Gardner met personally with Walker at least twice, once at the Crowne Plaza in Milwaukee in December 2009 and once at the Madison Noodles & Company in April 2010. He told Walker in an email that "I will do everything I can do to get you in the Governors Mansion" (sic).

The complaint also states that Gregory Edminster, the person who informed Gardner's girlfriend that the campaign money laundering was likely illegal, told investigators he contacted Walker's campaign about the scheme, but was told "they were confident there were no illegal contributions coming into the Walker campaign."

Other Illegal Contributions With Railroad Money

While the great majority of illegal contributions went to Walker's campaign, Gardner also used railroad funds in 2009 to filter $3,500 to the Assembly Democratic Campaign Committee (ADCC) and $500 to former Speaker Mike Sheridan (D-Janesville). ADCC has donated the funds to state schools, and Rep. Sheridan is reportedly in the process of donating the funds to charity. Additionally, the investigation showed that Gardner made illegal contributions with railroad money in past election cycles. According to officials at Monday's press conference, these donations were not prosecuted because the statute of limitations had expired. $500 went to Sen. Alberta Darling (R-River Hills) in 2003, $500 to then-Sen. Ted Kanavas (R-Brookfield) in 2005, and $5,000 to former Gov. Jim Doyle (D) in 2005.

Gardner's Previous Illegal Contributions to Walker

Also uncovered were a series of past election violations by Mr. Gardner. While working as a lobbyist in 2005, he made a $5000 contribution to Scott Walker in violation of lobbying laws. He was fined $1000 by the GAB and reimbursed by the Walker campaign, only to re-donate $5000 to the Walker campaign on the same day, but under his daughter's name.

In 2006, Gardner filtered $7000 in donations to Scott Walker, reimbursing acquaintances for contributions made under their name.

Governor Walker has returned $44,800 directly to Gardner, which covers the donations made towards his 2010 campaign and the 2005 donation made through Gardner's daughter. The GAB has reportedly directed those funds to charity. According to officials at the press conference, though, Walker has not returned the $7000 in illegal donations from 2006.