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Monday, July 28, 2014 |  Madison, WI: 62.0° F  A Few Clouds
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COVER STORY

WMC: Bad for Business?
WMC stands accused of putting conservative political agenda ahead of the state's best interests


Credit:Tom Nick Cocotos
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When the dust settled in the state Supreme Court race on April 1, the biggest winner appears to have been the biggest spender.

Wisconsin Manufacturers & Commerce got what it wanted - a victory for Michael Gableman, a self-described "judicial conservative." The business lobby is banking on the newly elected justice to turn the court rightward, especially in cases that could benefit business at the expense of consumers or employees.

According to the watchdog group Wisconsin Democracy Campaign, WMC paid $1.76 million to get Gableman elected, more than anyone else, including Gableman's own campaign. Almost all of this money went to unregulated "issue ads" that criticized incumbent Justice Louis Butler or praised Gableman, while avoiding direct "vote for" statements that would have made them subject to campaign finance rules.

For WMC, it was another triumph. Waving the scalp of the ousted Butler, WMC spokesman Jim Pugh told the Associated Press, "When given a choice between a liberal judge and a traditionalist judge, people chose a traditionalist judge." But if all people needed was to be given a choice, why did WMC feel the need to pump nearly $2 million into the race?

The state's largest and by far most powerful business lobbying group, WMC has now played a key role in helping elect two conservatives to the state Supreme Court in as many years, and there's a tacit assumption that when Chief Justice Shirley Abrahamson goes up for another 10-year term next year, WMC will attempt a triple play.

But even as the WMC revels in its clout, a backlash is brewing. At least three concerted campaigns have been launched to undercut WMC's power in the public discourse and at the ballot box. All three efforts are pushing the same message: The big business lobby has become bad for Wisconsin.

What's more, a small but increasingly restive group of business leaders are starting to take a second look at WMC's policies and tactics. Some are apparently starting to question whether their interests are represented by the group's ever-more-strident agenda and rhetoric, which peg Wisconsin as a lousy place to do business - except perhaps for trial lawyers who want to file frivolous lawsuits, killing jobs in the process.

"Saying 'Wisconsin is a tax hell' is not a very positive way of branding Wisconsin for business," says Paul Linzmeyer, the former president of Bay Towel in Green Bay who now helps companies develop environmentally sustainable and socially responsible practices.

Linzmeyer, who also chairs the Bay Area Workforce Development Board in Northeast Wisconsin, criticizes WMC for opposing environmental regulation and for squeezing education funding at a time when "Wisconsin manufacturers are screaming for workers with appropriate skills, not just to do the job, but who have communication skills and can work in teams."

And he says he isn't alone in his distaste. "I'm starting to hear it more and more: Why is Wisconsin Manufacturers & Commerce speaking for all business when it's probably only speaking for a small portion of its membership?"

'They want higher taxes'

To be sure, reports of business community discomfort with WMC may be exaggerated. Sources told Isthmus about several business leaders who were thought to be disenchanted, but none of them agreed to be interviewed or even to confirm reports of their dissatisfaction. Meanwhile, WMC's most outspoken critics - like former Madison mayor and now blogger Paul Soglin, and Capital Times editor emeritus Dave Zweifel - are easily marginalized by the organization's own officials.

"I think it's kind of laughable in the sense that you have Paul Soglin and Dave Zweifel trying to define what's in the best interest of the business community," says James Buchen, WMC's chief lobbyist. "Nobody would think of them as a credible source of perspective as to what's in the best interest of the business community."

Buchen dismisses these critics as people who "want higher taxes and more business regulation and all that sort of thing." They "see us as standing in the way of what they want to accomplish," he continues. "They think that they can intimidate our members, or our board members, into standing on the sidelines. I don't think anybody's confused about what's going on."

It wasn't always like this. WMC traces its roots back to 1911, but in its current form it owes more to the 1970s merger of state manufacturing and chamber of commerce groups under then president Paul Hassett. Until the early 1990s the organization was largely seen as a quiet, pro-business group. It advocated lower taxes and less regulation, but largely steered clear of the political fray. It had cordial relations with the previous generation of labor leaders.

That changed dramatically a decade ago. The major turning point was WMC's decision to plunge into electoral politics by raising money for and airing election-season issue ads - thinly disguised efforts to back or block candidates while escaping campaign financing regulations.

Jim Doyle's election as governor in 2002 on a platform that was far more centrist and pro-business than that of previous Democrats like Ed Garvey or Chuck Chvala appears to have emboldened the organization. WMC managed to get Doyle to back legislation in 2003 that streamlined environmental regulations in the name of business development - angering some environmental activists. Doyle's reward: some $1.5 million in ads against him from WMC during his 2006 re-election campaign.

Arguably, it could have been worse. WMC came into the race late, sparking criticism from some members who wanted it to launch a more aggressive attack on Doyle earlier on.

In other races, WMC's influence has been keenly felt. According to Wisconsin Democracy Campaign, the group spent $2.5 million in 2006 to elect Republican J.B. Van Hollen as state attorney general over Democrat Kathleen Falk. It also spent another $1 million that year on selected legislative races.

$10 billion and counting

WMC's legislative agenda, amplified in its election campaign ads, revolves mainly around cutting taxes, reducing regulation, and curbing civil lawsuits in areas such as product liability. Critics say the business lobby, in pursuit of this agenda, unfairly and inaccurately bashes Wisconsin, undermining efforts to recruit business to the state. They also contend its reflexive anti-tax stance stifles investment in such areas as education.

"They wield inordinate influence over state policy," says Scot Ross, executive director of One Wisconsin Now, which has launched the website WMC Watch . "You see it in the lack of a progressive tax structure for the state of Wisconsin; you see it in their opposition to universal health care for Wisconsin, in the form of the Healthy Wisconsin plan. Their influence is massive, and the result is to the detriment of the people of Wisconsin."

WMC Watch includes a counter that purports to tell visitors "the potential total cost to the state of Wisconsin from WMC" in the form of bills that would give additional tax breaks to corporations, shield them from legal liability and otherwise aid business at taxpayer expense. The calculations also include bills WMC opposes that One Wisconsin Now contends would enhance quality of life in the state at corporate expense.

As of mid-May, the cost counter on the website had passed $10 billion - a figure that Ross explains takes into account proposed or passed legislation going back to 2001.

The WMC Watch campaign consists mainly of signing up online visitors to join the pushback campaign. "We've had hundreds of people sign up to be WMC watchers," says Ross. More than 1,000 people have sent letters to local newspaper editors using a tool on the website, although there's no record of how many have actually been published.

All the while, critics argue, the group's election campaigning puts a thumb on the electoral scales through ads that are arguably unfair and untrue.

In the Gableman/Butler race, FactCheck.org, a national nonpartisan watchdog group, criticized WMC for an ad that misleadingly said Butler "almost jeopardized" a Kenosha murder prosecution when in fact he was the only dissenter. FactCheck's criticism didn't stop there: "The ad also says Butler focused on 'needless technicalities,' when the case involves a question of constitutional rights so important that the U.S. Supreme Court will weigh in on the subject this spring."

Because issue ads aren't regulated, they can be funded by corporations, who aren't allowed to donate directly to Wisconsin political campaigns. Soglin believes much of the money comes from shadowy national groups seeking to remake the nation's courts along right-wing lines.

Asked where WMC gets the money it uses to run these ads, Buchen declines to be specific. "It comes from business," he says. "That's all I'm going to say."

Setting the agenda

Buchen, vice president of government relations for WMC, says the group's agenda simply reflects the will of its members - about 4,000 companies who pay anywhere from $350 to $30,000 a year, based on their employee count, to join.

WMC members, he assures, thought the Healthy Wisconsin plan that would have extended care to more people at what proponents said would be a lower cost to state business was "a terrible idea."

Or take taxes. "One can certainly overstate taxes as a single factor in evaluating a state's business climate," Buchen says. "But it's a factor, and it's not an insignificant one in a state where it's generally perceived to be a problem. More important, from our perspective, is the opinions of our members, who consistently identify this as a critical issue."

That may be so, but Buchen and his colleagues on WMC's staff exercise important influence on the group's day-to-day agenda.

"Most business CEOs spend 120% of their time running their businesses," says John Torinus, CEO of a West Bend manufacturing company and a member of WMC's board. "So when it comes down to public policy, they don't follow it closely." As a result, he continues, the lobbying group is "more of a staff-driven organization."

Torinus insists, though, that this doesn't mean WMC is out of touch. WMC board members pass judgment on the group's legislative agenda at annual retreats. And political campaign work, like the ads against Doyle in 2006 and supporting Annette Ziegler and Gableman for the high court, also get board approval, he says.

Sometimes there has been "second-guessing," Torinus admits: The ads two years ago to boost Republican Mark Green's failed bid for governor "backfired" by making it "painful to deal with Doyle" after his re-election. But, he adds, "I don't hear a ton of regrets." And while Torinus found advertising on all sides in the high court race distasteful, the fundamental decision to back Gableman was uncontroversial among the business leaders the group represents.

"I'd like to see all the big money out of elections. I've been looking for years for ways to get special-interest money out," says Torinus, who personally favors public financing of state Supreme Court races. But Torinus, who served as business editor at the old Milwaukee Sentinel in the 1980s and now writes a weekly business column for the Milwaukee Journal Sentinel, adopts the same position as WMC: Its issue advertising is ultimately protected free speech and cannot be regulated under the First Amendment.

And he stands foursquare behind the main points of the organization's agenda - particularly for lower taxes. "We're dropping in the rankings, and that's good," he says of Wisconsin. "If somebody weren't trying to fix that, it would be worse."

Sending a message

The pushback against WMC began building a couple of years ago. Soglin, using his blog WaxingAmerica.com, launched what was at first a one-man campaign to dog the business lobby. In one of his early sallies, Soglin pointed out a disconnect between WMC's standing agenda and a survey of its manufacturing members.

In the 2006 survey, businesses ranked "taxes" number one and "lawsuit abuse" number three among "public policy issues facing Wisconsin." Yet when asked about their own companies, the businesses ranked those same items third from last and last, respectively. Soglin proclaimed the inconsistency and suggested the decision to rank these higher as state issues owed to "propaganda [and] lobbying" from the group's leadership.

Soglin claims calling attention to the discrepancy embarrassed WMC into not releasing its 2007 survey. Buchen denies that and says the survey Soglin reported on wasn't the group's annual member survey but a more limited one of manufacturers.

Meanwhile, Soglin has stepped up his campaign against WMC. With funding from "a collection of unions" (he won't be more specific), Soglin has undertaken a campaign to contact WMC board members and urge them to reconsider their support for the organization.

"I will call a WMC member company and I'll ask for a meeting so we can discuss exactly what is going on in the state of Wisconsin and what their responsibility is," he says. "And point out to them that there are ways they can do good things for the Wisconsin business community without doing damage to our public education system, or the environment, or providing basic services at the governmental level."

Of the 30 or so companies Soglin has contacted, about half have either ignored or rejected his requests to meet. Those companies end up being targeted in occasional pickets Soglin and his union backers organize at WMC events. Another 15, he says, have agreed to hear him out. "If they respond and they have a meeting, then they do not get singled out, either in our picketing or in what I write."

Soglin says at least one major company has told him it will not contribute to WMC's issue ads as a result of his discussions. Pickets have been held so far in Madison, Wausau, Green Bay, Milwaukee, Eau Claire and La Crosse.

As Soglin sees it, the basic message to WMC is this: "The law allows you to take out these issue ads. But we have every right to point out that the various companies that are responsible for these issue ads sit on the board of directors of WMC, and we're going to name names. We're going to hold them responsible."

Yet even Soglin isn't sure whether he'd rather have businesses who buy his arguments stay or leave the organization. Part of him, he admits, would like to see them remain and work to change WMC policies from within.

Meanwhile, at The Capital Times, editor emeritus Zweifel has pounded out a series of columns that lacerate WMC, especially over its role in the last Supreme Court race. Recently, he published a list of WMC board members, suggesting that readers "ask some of these honchos" to explain how the group "makes the decision to launch attacks and winks at advertising that is incredibly racist." Several readers wrote to say they had demanded answers or severed ties with companies as a result.

Efforts like these represent a new and more aggressive attempt to counter WMC's power. Labor unions, the Wisconsin Education Association Council and other progressive groups are looking for ways to take on WMC on everyday issues, not just during elections.

"There's no way we can outgun them in buying television ads," Soglin says. "There's no way we can outgun them in lobbying the Legislature. But the dumbest thing we ever did was abandon the day-to-day playing field."

On another front, a handful of business leaders are reportedly contemplating a new group that would focus on supporting education in the state. This group, says Soglin, would take the tactic of "ignoring WMC." But Bill Kraus, the onetime Lee Dreyfus aide who now is active with Common Cause in Wisconsin, acknowledges that effort is largely dormant and unlikely to bear fruit for some time.

Yes, we have no dissenters

The effect of this opposition is hard to gauge. Buchen seems to regard it contemptuously, but Soglin says it's prompted WMC to tone down the shrillness of its rhetoric.

Indeed, board member Torinus tells Isthmus he'd like the group to take a less confrontational approach - "a more even tone, a more factual tone, as opposed to getting into more overheated rhetoric."

But Torinus doesn't apologize for the group's agenda. And in the face of the criticism, WMC continues to wield considerable power. One sign is the reticence of people thought to be critics to go on record.

Just after the Gableman election, news got out about a possible break in the pinstriped line surrounding WMC. When Jim Bouman, a Waukesha blogger, learned that TDS Telecom CEO David Wittwer was a WMC director, he wrote Wittwer and threatened to cancel his TDS telephone service as a consequence of WMC's stances, especially its ads in the high court race.

Wittwer wrote back, telling Bouman that "for personal and philosophical reasons, I have resigned my seat" on the board. Bouman posted the letter, hailed Wittwer's action, and vowed to remain a TDS customer. The seeming victory for the anti-WMC forces got a few days' worth of attention in the blogosphere and elsewhere.

When Isthmus tried to follow up with Wittwer, however, our call was referred instead to TDS's corporate lobbyist, Drew Petersen, who emphasized that the company remained part of WMC. Petersen downplayed any connection between Wittwer's departure from WMC's board and the group's political agenda: "It had to do with time commitments. That's really all we have to say on the issue."

Even state Department of Revenue Secretary Roger Ervin won't stand behind comments he made a year ago to the Journal Sentinel, criticizing WMC's "negative message" of scaring away business. While praising member companies as "the backbone of this economy," Ervin said the group's staff "is not doing their members any good."

Last month, Isthmus called him to ask about those comments. His only response was to have spokeswoman Jessica Iverson issue this terse email: "I believe that government and business should work effectively together to grow the state's economy."

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