In its first full year of operation, the state Ethics Commission was less likely to issue a penalty than the old GAB, preferring to dole out a warning instead, according to a WisPolitics.com review of settlement records.

What’s more, the penalties that campaigns, outside groups and lobbyists paid in 2017 were, on average, smaller than the ones the Government Accountability Board sought in 2015, its last full year of operation, according to the review.

“It’s still early, but this appears to be a troubling trend,” said Wisconsin Democracy Campaign director Matthew Rothschild. “If the Ethics Commission doesn’t come down hard on violators, it’ll just be sending out an invitation to candidates and to outside groups to go ahead and break the law.”

But Chair David Halbrooks, a Dem appointee, said a chief reason for the higher forfeitures under the GAB is that the Ethics Commission does not have the resources or authority to conduct independent investigations into suspected violations without a filed complaint.

That law never applied to the Government Accountability Board, which has been criticized by proponents of the Ethics Commission for allowing its staff too much discretion in fielding investigations without sufficient cause.

“I don’t perceive that we’re being soft on people or that we’re letting things go by,” Halbrooks said.

In 2017, the commission sought $29,569 in forfeitures from committees and individuals for various violations of campaign finance and lobbying law, about $39,000 less than the $68,593 sought by the GAB in 2015. The Ethics Commission, however, was still working on three dozen settlements that Ethics Commission specialist Colette Reinke said could push that 2017 total higher.

That drop occurred even as the commission handled more cases — 127 versus the GAB’s 114, for an average settlement of $233 versus the GAB’s $602.

Part of the reason the GAB’s total amount settled in 2015 was far higher than the Ethics Commission was due to the GAB issuing several high-cost settlements against a few groups.

The GAB received a $28,150 forfeiture from Gov. Scott Walker’s campaign committee for exceeding campaign contributions in 2014, which accounted for 41 percent of forfeitures in 2015; a $5,990 forfeiture from Republican Sen. Scott Fitzgerald’s campaign committee for exceeding campaign contributions in 2014; and a $2,600 forfeiture from Wisconsin Community Services Inc. for late registration.

The three largest levied in 2017 were smaller, the highest being a $3,212 fine against Dem Nancy Stencil’s campaign committee in her bid for the 86th AD. The next largest was a $2,500 fine against Quad/Graphics Inc. for a late lobbying report, followed by a $747 settlement with the Portage County Democratic Party.

If Walker’s 2015 forfeiture were to be excluded, that would drive down the average GAB settlement that year to about $358, $125 higher than the average settlement amount under the Ethics Commission last year.

The Ethics Commission did, however, seek more in forfeitures for certain categories compared to the GAB. For instance, the Ethics Commission sought $10,891 in 41 cases in the category of “incomplete report/cash balance,” as opposed to $4,984 in 20 settlements under the GAB.

The new commission was also more likely than the GAB to not seek settlements. In all, the Ethics Commission issued a settlement 69 percent of the time, as opposed to the GAB’s 80 percent.

The WisPolitics.com review of settlement records is one way to compare the two agencies, however, some officials urge restraint in using the records to form a definitive opinion of their policies.

Dean Knudson, a current commissioner for the Elections Commission and the GOP lawmaker who sponsored the bill that dissolved the GAB, argued that comparing settlement totals from 2015 to 2017 would be unfair because the creation of the Ethics Commission meant a change in the rules, regulations, administration and means of enforcement of campaign finance and lobbying laws.

“I believe you’ve got an apples and oranges comparison,” Knudson said.

When looking at non-settlement entries, WisPolitics.com initially found the Ethics Commission issued 51 warnings to groups and individuals in 2017. That figure came from a copy of the settlements WisPolitics.com received at the end of January from then-administrator Brian Bell.

But after WisPolitics.com began asking questions about the warnings both the Ethics Commission and GAB logged, officials provided an updated 2017 spreadsheet that reclassified 46 of the 51 terms as “non-penalty – within grace period” instead of “warnings.” The spreadsheet also featured a number of new settlements.

WisPolitics.com has used the new 2017 spreadsheet in its analysis — not the original from Bell.

The updated language, commission spokesman David Buerger said, is an internal classification that more accurately describes the “warning” term that was inserted in the earlier version of the records to “more colloquially describe the resolution of those matters.”

As for the 2015 figures, WisPolitics.com used entries contained in a document from a January 2016 meeting of the old GAB.

Investigations down under Ethics Commission compared to GAB

The Ethics Commission and GAB also differ in their abilities to conduct independent investigations, another factor when comparing the 2015 and 2017 settlement figures.

Under the Ethics Commission, the two main ways to enforce a violation of campaign finance or lobbying laws is by investigating complaints and conducting internal audits. The GAB, however, had the authority to launch its own investigations without a filed complaint.

The Ethics Commission’s annual report from August 2017 shows the Commission had only completed one investigation in the year leading up to the audit.

Meanwhile, from 2010 to 2013, the GAB conducted 21 investigations, according to an August 2015 Legislative Audit Bureau report. The rest of the settlements, both in 2015 and in 2017, were conducted via audit.

Knudson said part of the intent of creating the Ethics Commission was to limit the number of independent investigations.

“It was the intent to create a complaint based system,” he added.

The number of initial inquiries that resulted in those investigations is far higher, at 204. Of those,122 were begun due to concerns from staff, rather than complaints, the only way the Ethics Commission may start an inquiry.

But former GAB Director Kevin Kennedy told WisPolitics.com that claims related to staff discretion and the board’s policies surrounding investigations are overhyped, arguing GAB staff could not conduct an investigation without authorization of the GAB.

“That’s not a very real distinction,” Kennedy said. “If evidence was found through the audits or through complaints, the staff still had to take it to the GAB to go forward with the audit process. Sometimes the Ethics Commission tends to want to sound like everything that the GAB did was wrong when that is not the case.”

Instead, Kennedy said the higher amount of settlements under the GAB is more likely due to more political activity around 2015 and a change in state campaign finance law that doubled the limit on campaign contributions for state and local candidates.

At $49,475, forfeitures for exceeding campaign contributions were by far the largest category of settlements under the GAB. While the Ethics Commission has yet to publish several of its settlements, records so far show the commission has only sought $3,384 in forfeitures.

See the 2017 Ethics Commission spreadsheet:
https://www.wispolitics.com/wp-content/uploads/2018/02/180216_2017Settlements.pdf

See the 2015 GAB spreadsheet:
https://www.wispolitics.com/wp-content/uploads/2018/02/180216_2015Settlements.pdf

See the 2015 LAB report:
https://legis.wisconsin.gov/lab/reports/15-13brief.pdf

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