STATE OF WISCONSIN
CIRCUIT COURT DANE COUNTY
STATE OF WISCONSIN
- Plaintiff
CRIMINAL COMPLAINT vs.
Chvala, Charles
1 Coach House Drive
Madison, WI 53714
(DOB: 12-05-54)
Defendant(s) Complaining Witness: Bradley Kust
THE ABOVE NAMED COMPLAINING WITNESS BEING DULY SWORN SAYS THAT THE ABOVE NAMED DEFENDANT(S) IN THE COUNTY OF DANE, STATE OF WISCONSIN.
COUNT 01: EXTORTION In May of 1997, in Dane County, the above-named defendant did by verbal communication maliciously threaten an injury to the person, business, profession, calling or trade of William Peterson with the intent thereby to extort money from William Peterson, contrary to Wisconsin Statutes section 943.30(1).
COUNT 02: MISCONDUCT IN PUBLIC OFFICE In May of 1997, in Dane County, the above named defendant in his capacity as a public officer did an act which the defendant knew he was forbidden by law to do in his official capacity, contrary to Wisconsin Statutes section 946.12(2).
COUNT 03: EXTORTION In March of 1998, in Dane County, the above-named defendant did by verbal communication maliciously threaten an injury to the business, profession, calling or trade of the Wisconsin Realtors Association with the intent thereby to extort money from the Wisconsin Realtors Association, contrary to Wisconsin Statutes section 943.30(1).
COUNT 04: MISCONDUCT IN PUBLIC OFFICE In March of 1998 in Dane County, the above named defendant, in his capacity as a public officer did an act which the defendant knew he was forbidden by law to do in his official capacity, contrary to Wisconsin Statutes section 946.12(2).
COUNT 05: EXTORTION In July of 2000, in Dane County, the above-named defendant did by verbal communication maliciously threaten an injury to the business, profession, calling or trade of Wisconsin Wholesale Beer Distributors Association with the intent thereby to extort money, contrary to Wisconsin Statutes section 943.30(1).
COUNT 06: MISCONDUCT IN PUBLIC OFFICE In July of 2000 in Dane County, the above named defendant, in his capacity as a public officer did an act which the defendant knew he was forbidden by law to do in his official capacity, contrary to Wisconsin Statutes section 946.12(2).
COUNT 07: MISCONDUCT IN PUBLIC OFFICE In June of 1999, in Dane County, the above-named defendant while acting as a public officer did exercise a discretionary power in a manner inconsistent with the duties of the defendant's public office and with the intent to obtain a dishonest advantage for another by hiring Wendy Kloiber as a State employee for the purposes of having Wendy Kloiber conduct campaign activities for State Senate Democratic Candidates, contrary to Wisconsin Statutes section 946.12(3).
COUNT 08: MISCONDUCT IN PUBLIC OFFICE In October of 1999, in Dane County, the above-named defendant while acting as a public officer did exercise a discretionary power in a manner inconsistent with the duties of his office and with the intent to obtain a dishonest advantage for another by offering State employment to Heather Colburn for the purposes of having Heather Colburn conduct fund-raising activities for State Senate Democratic candidates, contrary to Wisconsin Statutes section 946.12(3).
COUNT 09: MISCONDUCT IN PUBLIC OFFICE From July 1998 through November 1998, in Dane County, the above-named defendant while acting as a public officer did exercise a discretionary power in a manner inconsistent with the duties of his office and with the intent to obtain a dishonest advantage for another by directing employees of the Senate Democratic Caucus to participate and manage the campaigns of Democratic candidates for the Wisconsin State Senate on State of Wisconsin time and using State of Wisconsin resources, contrary to Wisconsin Statutes section 946.12(3).
COUNT 10: MISCONDUCT IN PUBLIC OFFICE From July 2000 through November 2000, in Dane County, the above-named defendant while acting as a public officer did exercise a discretionary power in a manner inconsistent with the duties of his office and with the intent to obtain a dishonest advantage for another by directing employees of the Senate Democratic Caucus to participate and manage the campaigns of Democratic candidates for the Wisconsin State Senate on State of Wisconsin time and using State of Wisconsin resources, contrary to Wisconsin Statutes section 946.12(3).
COUNT 11: UNLAWFUL POLITICAL CONTRIBUTIONS In June of 2000, at 44 E Mifflin Street, City of Madison, Dane County, the above-named defendant did intentionally furnish funds to Lance Walter for the purpose of making a political contribution in other than the defendant's own name, contrary to Wisconsin Statutes sections 11.24(1) and 11.61(1).
COUNT 12: CAMPAIGN CONTRIBUTION EXCEEDING LAWFUL LIMITS (AS A PARTY TO A CRIME) On or about Fall 2000, at or near 1314 E. Wilson Street, City of Madison, County of Dane, and other locations within County of Dane, the above-named defendant did, as a party to a crime, intentionally make a contribution to a candidate for Wisconsin State Senate, to wit: Mark Meyer, exceeding the maximum contribution of $1,000 per Wisconsin State Senate candidate allowed under section 11.26(2)(b), contrary to sections 11.26(2)(b), 11.61(1)(b), and 939.05.
COUNT 13: FILING A FALSE REPORT WITH STATE ELECTIONS BOARD (AS A PARTY TO A CRIME) On or about September 14, 2000, at or near 132 E. Wilson Street, City of Madison, County of Dane, the above-named defendant did, as a party to a crime, intentionally submit a false report, concerning a figure exceeding $100.00, to a filing officer under Chapter 11 of Wisconsin Statutes, to wit: a form EB-7 relating to a $50,000 expenditure paid to Media Strategies Research, a copy of which is attached hereto and incorporated herein by reference, contrary to Wisconsin Statutes sections 11.27(1), 11.61(1)(b), and 939.05.
COUNT 14: FILING A FALSE REPORT WITH STATE ELECTIONS BOARD (AS A PARTY TO A CRIME) On or about October 27, 2000, at or near 132 E. Wilson Street, City of Madison, County of Dane, the above-named defendant did, as a party to a crime, intentionally submit a false report, concerning a figure exceeding $100.00, to a filing officer under Chapter 11 of Wisconsin Statutes, to wit: a form EB-7 relating to a $25,000 expenditure paid to Media Strategies Research, a copy of which is attached hereto and incorporated herein by reference, contrary to Wisconsin Statutes sections 11.27(1), 11.61(1)(b), and 939.05.
COUNT 15: FILING A FALSE REPORT WITH STATE ELECTIONS BOARD (AS A PARTY TO A CRIME) On or about November 2, 2000, at or near 132 E. Wilson Street, City of Madison, County of Dane, the above-named defendant did, as a party to a crime, intentionally submit a false report, concerning a figure exceeding $100.00, to a filing officer under Chapter 11 of Wisconsin Statutes, to wit: a form EB-7 relating to a $17,308 expenditure paid to Dixon Media Group, a copy of which is attached hereto and incorporated herein by reference, contrary to Wisconsin Statutes sections 11.27(1), 11.61(1)(b), and 939.05.
COUNT 16: FILING A FALSE REPORT WITH STATE ELECTIONS BOARD (AS A PARTY TO A CRIME) On or about November 2, 2000, at or near 132 E. Wilson Street, City of Madison, County of Dane, the above-named defendant did, as a party to a crime, intentionally submit a false report, concerning a figure exceeding $100.00, to a filing officer under Chapter 11 of Wisconsin Statutes, to wit: a form EB-7 relating to a $274.30 expenditure paid to Deanna Williams and a $13,450.99 expenditure to Litho Productions, a copy of which is attached hereto and incorporated herein by reference, contrary to Wisconsin Statutes sections 11.27(1), 11.61(1)(b), and 939.05.
COUNT 17: CAMPAIGN CONTRIBUTION EXCEEDING LAWFUL LIMITS (AS A PARTY TO A CRIME) On or about Fall 2000, at or near 1314 E. Wilson Street, City of Madison, County of Dane, and other locations within County of Dane, the above-named defendant did, as a party to a crime, intentionally make a contribution to a candidate for Wisconsin State Senate, to wit: Dave Hansen, exceeding the maximum contribution of $1,000 per Wisconsin State Senate candidate allowed under section 11.26(2)(b), contrary to sections 11.26(2)(b), 11.61(1)(b), and 939.05.
COUNT 18: FILING A FALSE REPORT WITH STATE ELECTIONS BOARD (AS A PARTY TO A CRIME) On or about November 2, 2000, at or near 132 E. Wilson Street, City of Madison, County of Dane, the above-named defendant did, as a party to a crime, intentionally submit a false report, concerning a figure exceeding $100.00, to a filing officer under Chapter 11 of Wisconsin Statutes, to wit: a form EB-7 relating to a $4,908.75 expenditure paid to WFRV-TV, a $3,591.25 expenditure to WGBA-TV, and a $9,137.50 expenditure to WBAY-TV, a copy of which is attached hereto and incorporated herein by reference, contrary to Wisconsin Statutes sections 11.27(1), 11.61(1)(b), and 939.05.
COUNT 19: CAMPAIGN CONTRIBUTION EXCEEDING LAWFUL LIMITS (AS A PARTY TO A CRIME) On or about Fall 2000, at or near 1314 E. Wilson Street, City of Madison, County of Dane, and other locations within County of Dane, the above-named defendant did, as a party to a crime, intentionally make a contribution to a candidate for Wisconsin State Senate, to wit: Alice Clausing, exceeding the maximum contribution of $1,000 per Wisconsin State Senate candidate allowed under section 11.26(2)(b), contrary to sections 11.26(2)(b), 11.61(1)(b), and 939.05.
COUNT 20: CONSPIRACY TO MAKE CAMPAIGN CONTRIBUTIONS EXCEEDING LAWFUL LIMITS On or about April 24, 2001 to present, at or near 1314 E. Wilson Street, City of Madison, County of Dane, and other locations within County of Dane, the above-named defendant did, conspire or agree with another to commit a felony, to wit: intentionally making contributions to candidates for Wisconsin State Senate, exceeding the maximum contribution of $1,000 per Wisconsin State Senate candidate allowed under section 11.26(2)(b), and did an act in furtherance of said agreement to commit a felony, contrary to sections 11.26(2)(b), 11.61(1)(b), and 939.31.
AS TO COUNTS 01 AND 03: Upon conviction of these charges, Class D Felonies, the maximum possible penalty is imprisonment for not more than five years or a fine of not more than $10,000 or both, for each count.
AS TO COUNT 02, 04, 07, 08 AND 09: Upon conviction of these charges, Class E Felonies, the maximum possible penalty is imprisonment for not more than two years or a fine of not more than $10,000 or both, as to each count.
AS TO COUNT 05: Upon conviction of this charge, a Class D Felony, the maximum possible penalty is imprisonment for not more than ten years or a fine of not more than $10,000 or both.
AS TO COUNT 06 AND 10: Upon conviction of these charges, Class E Felonies, the maximum possible penalty is imprisonment for not more than five years or a fine of not more than $10,000 or both, as to each count.
AS TO COUNT 11-20: Upon conviction of these charges, unclassified Felonies, the maximum possible penalty is imprisonment for not more than four years, six months or a fine of not more than $10,000 or both, as to each count.
Your complaining witness states that he is a Special Agent employed by the State of Wisconsin Department of Justice, Division of Criminal Investigation (DCI). Your complaining witness makes this complaint based upon his own investigation, based upon his review of transcripts of a John Doe proceeding which occurred before the Honorable Sarah O'Brien, based upon statements made by adult citizens whom your complaining witness believes to be reliable and based upon his review of reports prepared by fellow DCI agents as well as investigators employed by the Milwaukee County District Attorney's Office, acting as special prosecutors for Dane County. He has reviewed these types of reports in the past and has found them to be accurate and reliable. Your complaining witness states that he believes the individuals who testified at the John Doe to be reliable because their testimony was under oath.
Your complaining witness states that during the course of his investigation he learned that the defendant, Charles Chvala, is a Democratic State Senator representing the 16th District in the Wisconsin State Senate. The defendant has been a State Senator since 1984. In 1995, the defendant was elected by his fellow Democrats as the Minority Leader of the State Senate and in 1996 he became the Majority Leader of the State Senate. The defendant has continued to act as the Majority Leader of the State Senate except for a time period between April of 1998 and January of 1999 when he again acted as the Minority Leader.
Your complaining witness learned that Douglas Burnett, is employed as the defendant's chief of staff. Mr. Burnett has worked in that capacity for more than eight years. Mr. Burnett served as the defendant's campaign manager during his 1994 gubernatorial campaign.
During the course of his investigation, your complaining witness learned that as the Majority Leader of the State Senate, the defendant has a large number of both de facto and de jure powers. Some of these powers are noted in the Wisconsin Blue Book 2001-2002 edition, an official compilation prepared by the Legislative Reference Bureau which states, "Appointments to standing committees are made by the Senate upon nomination by the Chairperson of the Organization Committee, who is also the Majority Leader . . ."
Your complaining witness states that during the course of his investigation he learned that as the Chair of the Committee on Senate Organization, the defendant had complete control over scheduling of bills in the Wisconsin State Senate. The 2001-2002 Blue Book at page 266 states, "Both the Senate and Assembly have systematic procedures for scheduling proposals on the house daily calendars. In the 2001 legislature, all proposals reported by Senate standing committees are referred to the Committee on Senate Organization; in the Assembly they are referred to the Committee on Rules. These committees schedule all business for floor debate."
This authority is also confirmed by the rules of the Senate. Senate Rule 18(1) provides that, "All proposals, appointments or other business referred to a committee and reported by it to the senate or withdrawn from it by the senate, all proposals or amendments received from the assembly for senate concurrence and all reports from Conference Committee and veto messages received from the Senate, shall be placed in the Committee on Senate Organization." Rule 18(1) also provides that "The chairperson of the Committee on Senate Organization may place a proposal, appointment or other business that is in the Committee on Senate Organization on a calendar that has been established by the committee." The amount of authority vested in Committee on Senate Organization and its Chair is made clear by Senate Rule 1M(2) which states, "Every officer of the Senate is subordinate to the Committee on Senate Organization and in all that relates to the discharge of that officer's several duties, is under the supervision of the Committee on Senate Organization."
During the course of his investigation your complaining witness, along with other agents from DCI and investigators from the Milwaukee County District Attorney's Office, interviewed more than 40 lobbyists, State senators, State employees and political activists and defendant's Chief of Staff, Douglas Burnette. As a result of these interviews, your complaining witness states that he learned that during the time period that the defendant acted as the Majority Leader of the Wisconsin State Senate, it has become virtually impossible for legislation to be passed by that body without his approval.
Your complaining witness learned that, in addition to his official duties as the Majority Leader, the defendant also was in charge of fundraising for the State Senate Democratic Committee as well as Democratic State Senators and Democratic Senate candidates in numerous high profile races. Your complaining witness spoke to numerous lobbyists, including Michael Bright, Patrick Essie, William Broydrick and Sharon Cook who reported participating in election year "cattle calls" where they were summoned to the defendant's law offices, often in 15 minute intervals, and requested by the defendant to solicit their clients for contributions to candidates that the defendant identified. These lobbyists stated that at these meetings the defendant would produce records or notes showing what contributions the lobbyists clients had made in the past. The defendant would often suggest target amounts for contributions.
Your complaining witness states that during the course of his investigation he learned that from the mid to late 1960s until the end of 2001, the legislature employed individuals in party caucuses which were authorized by Wisconsin Statutes section 13.20(1). Four such caucuses existed, one for each party in each house of the legislature. In the defendant's position as the Majority Leader and, for a brief time, the Minority Leader, the director of the Senate Democratic Caucus (SDC) was hired and fired by the defendant and reported directly to him. The defendant was also directly involved in the hiring of SDC staffers and at all times exercised final decision making authority over this process. The Senate Democratic Caucus during the relevant time periods maintained State leased office space at One South Pickney Street in the City of Madison, Dane County, as well as other locations in the City of Madison. The SDC staff consisted of a director, a deputy director, two analysts responsible for maintaining data bases, a graphic artist and approximately five policy analysts, and a receptionist. All of these individuals were State employees who worked in State leased offices on State owned or leased equipment.
Your complaining witness states that Milwaukee County District Attorney's Office Investigator Heidi Bisswurm spoke to Donald Schneider who is the Clerk of the Wisconsin State Senate, and Mr. Schneider informed Investigator Bisswurm that as of October of 2000, the gross monthly payroll for SDC employees was approximately $46,000. During an earlier interview with DCI Agents Deborah Strauss and Amy Blackwood, Mr. Schneider provided the agents with a copy of the Senate policy manual which addressed political activity stating, "No political activity is permitted during working hours. No State facility, office, office equipment, supplies, etc. may be used for political purposes at any time. During non-office time employees may exercise their citizenship rights by political activity in community involvement." Mr. Schneider also provided the agents with a document called the Wisconsin State Senate Guidelines for Incumbents, which Mr. Schneider indicates he distributes in May of each election year. This document indicates that in November of 1977, the Senate established a written policy that State equipment and supplies are strictly for conducting official State business and are not to be used at all for political campaign activities.
Probable Cause as to Counts 1-2: (Extortion Of William Peterson)
Your complaining witness was present at a John Doe proceeding before the Honorable Sarah O'Brien, Circuit Court Judge for Dane County when an adult citizen named William O'Connor appeared and testified. Mr. O'Connor stated he is an attorney with the law firm of Wheeler, Van Sickle and Anderson in Madison. Mr. O'Connor testified that he was also a registered lobbyist in the State of Wisconsin and had been so since about 1981. In 1997, he was retained by the Lake Geneva Historical Society to lobby the legislature with respect to a property known as Black Point Estate on Lake Geneva. Mr. O'Connor testified that Black Point Estate was owned by Mr. William Peterson, and that Mr. Peterson and his wife wished to donate the property to the State of Wisconsin and preserve the undeveloped shore land. Mr. O'Connor stated that a proposal was made to donate Black Point Estate to the State of Wisconsin and to have the property managed by a non-profit corporation. The State would then establish an endowment fund to support the operation of the site. This proposal would grant Mr. Peterson tax benefits for the donation of the property and allow him to avoid having to destroy Black Point Estate and sell the property in pieces.
During the course of lobbying on this matter, Mr. O'Connor met with the defendant to explain the specifics of the planned preservation effort. Mr. O'Connor stated that during May of 1997, the legislature was working on the biennial budget bill and the budget bill was pending before the Joint Committee on Finance. In May of 1997, a motion was made before the Joint Committee on Finance to approve the acceptance of the Petersons' donation of the property to the people of the State. Mr. O'Connor recalled that the vote at the Joint Finance Committee was fifteen in favor and one against. Mr. O'Connor had invited his client, William Peterson, to come to Madison that day for the meeting because he felt that the Joint Finance Committee would be considering the Black Point Estate matter. After the vote, he and Mr. Peterson had lunch at a restaurant in Madison and discussed what the next step was. The motion regarding Black Point Estate called for Mr. Peterson to donate the property and authorized the State Department of Administration to accept the gift.
After lunch, Mr. Peterson drove back to Chicago, and Mr. O'Connor walked back to his office. Mr. O'Connor stated that in May of 1997, certain portions of the State Capitol were being renovated, and the Joint Finance Committee was meeting outside the Capitol in a building located on the 100 block of South Martin Luther King Jr. Drive in the city of Madison, Dane County. Mr. O'Connor stopped at this building to obtain a copy of the motion which had been passed by the Joint Finance Committee. After obtaining a copy of the motion, he stated he encountered the defendant on the sidewalk. Mr. O'Connor stated that he spoke to the defendant and told him that the Black Point historic preservation initiative, that he had described to the defendant in a meeting earlier, had been approved that morning by the Joint Finance Committee on a vote of 15 to 1. Mr. O'Connor told the defendant that he was delighted by the vote and assumed with such a strong vote that the proposal would have smooth sailing in both houses of the legislature as the budget bill went forward.
Mr. O'Connor stated that the defendant responded by telling him that if Mr. O'Connor wanted to make sure that his bill didn't get into trouble, he had better have some of his people contribute to some of the defendant's candidates. The defendant went on to tell Mr. O'Connor that Mr. O'Connor should come to the defendant's legislative office at a later date and that the defendant would provide more information on where the contributions should be directed. The defendant directed Mr. O'Connor to make contact with a member of the defendant's staff concerning the contributions. The defendant said that the contributions should be made to Senator Rod Moen and Senator Kim Plache. The defendant indicated that Mr. O'Connor's client should make a contribution in the amount of $500 for each of these candidates.
Mr. O'Connor stated that at the time these requests were made by the defendant, he had no reason to believe that Senator Moen or Senator Plache even knew the Black Point Estate legislation existed. He had never spoken to either senator and had no reason to believe that they were opposed to the proposal.
Mr. O'Connor stated that he then contacted Mr. Peterson and told him that he was sickened by the need to make the phone call. Mr. O'Connor explained to Mr. Peterson the conversation with the defendant and the defendant's request for campaign contributions in exchange for assuring that the Black Point proposal would not run into problems. Mr. Peterson reacted by stating that he was from Chicago, and he was familiar with such requests and joked to the effect that only the dollar amounts were smaller in Wisconsin. Mr. Peterson indicated that he felt he would have to make the contribution.
Mr. O'Connor stated that after relaying this information to Mr. Peterson, within the next few days, he went to the defendant's State office, which had also been moved out of the Capitol due to renovation, and spoke to a member of the defendant's staff who gave him information on the campaign committees for Senator Moen and Senator Plache.
Mr. O'Connor provided investigators with the Milwaukee County District Attorney's Office a copy of a letter dated June 4, 1997 that he wrote to Mr. Peterson regarding Black Point. This letter states, "Today I saw Senator Chvala who asked 'Are the checks in the mail?' I advised that they would be as soon as I get the correct names for the campaign committees of Senator Moen and Senator Plache. They are: Friends of Rod Moen and Friends of Kim Plache. I suggest that you get the two checks ($500 each) in the mail at your earliest convenience. I will deliver them directly to Senator Chvala."
William Peterson was interviewed by Investigator Bisswurm and informed Investigator Bisswurm that he was in Madison the day the Joint Finance Committee met regarding funding for the Black Point Estate. Mr. Peterson stated that the day after the meeting he received a phone call from Mr. O'Connor. Mr. O'Connor told him that he had a conversation with the defendant in which the defendant had stated that if they wanted to have the Black Point legislation passed, then Peterson better donate some money to the Moen and Plache campaigns. Mr. Peterson stated that Mr. O'Connor told him that he had never seen such a demand before. Mr. Peterson told Mr. O'Connor that this is a typical Chicago alderman tactic and he felt that they needed to make the contribution. He then wrote two checks, one payable to the Friends to Kim Plache for $500 and one payable to the Friends of Rod Moen for $500. Mr. Peterson indicated that he was not familiar with either of these state senators and would not have made any contributions but for the demands made by the defendant.
Your complaining witness states that campaign finance records maintained by the Elections Board confirmed the receipt of a $500 contribution from Mr. Peterson to Kim Plache campaign in June of 1997 and a $500 contribution from Mr. Peterson to Rod Moen campaign in June 1997.
Senator Moen told Milwaukee County District Attorneys Office Investigator Aaron Weiss that he was unaware of the contribution made by Mr. Peterson until a recent newspaper article. He was never opposed to the Black Point Legislation. A representative of Senator Plache informed the Milwaukee County District Attorney's office that Senator Plache had no knowledge of the request for contribution made by the defendant. Senator Plache was not on the Joint Finance Committee in 1997 and had no recollection of being aware of the existence of the Black Point Estate proposal at the time.
Your complaining witness states that during his investigation he spoke to numerous lobbyists and State Senators who informed him that after the state budget bill is passed by the Joint Finance Committee, it is then considered by each house of the legislature. The majority party of each house meets, often in closed caucus sessions, and makes whatever changes they wish. Your complaining witness was informed that, in the State Senate, the defendant has almost total control over what is produced by his caucus and passed by the Senate. Therefore Mr. O'Connor knew that even though the Black Point Estate provision had passed by a 15-1 vote, the defendant could block the provision in his caucus and force its removal from the Senate version of the budget. (It should be noted that the term "caucus" in this section refers to a meeting of senators of the same party and is different than the Senate Democratic Caucus). After the contributions were made by William Peterson, the Black Point legislation remained in the State Budget bill passed during the Summer of 1997.
Your complaining Witness learned that after the Black Point Estate legislation passed, a group of neighbors who were opposed to the legislation retained lobbyist Eric Peterson. Eric Peterson lobbied the defendant on this issue. Eric Peterson testified that, as part of that lobbying effort, he personally handed contribution checks from the Black Point Estate neighbors made payable to Senate Democratic candidates to the defendant. Your complaining witness states Elections Board records show that in 1999 and 2000 at least three of the neighbors made $1,000 contributions to State Senator Alice Clausing. A repeal of the Black Point Estate funding was inserted into the State Budget during the Summer of 2001 via an amendment proposed by the defendant and others, but ultimately was vetoed by the Governor.
Probable Cause as to Counts 3-4: (Extortion of Wisconsin Realtors)
Investigator Bisswurm spoke to an adult citizen, William Malkasian. Mr. Malkasian identified himself as the President of the Wisconsin Realtors Association. Mr. Malkasian indicated he had worked for the organization for a total of 27 years and has served as the Executive Vice President for 25 years. He stated that he is a registered lobbyist but does most of his work on a federal or national level rather than the local level.
Mr. Malkasian stated that in 1998 the Wisconsin Realtors Association had devoted a large amount of effort to lobbying on a bill known as Assembly Bill 334 (AB 334) which dealt with the regulation of home inspectors. Mr. Malkasian stated that his organization wanted home inspectors to be regulated because if a consumer was not happy with a home inspector's failure to identify a defect in a house being sold, consumers would often turn to the realtors and attack them for the poor performance of the home inspectors because they had no other place to go. The Wisconsin Realtors Association had been working on the piece of legislation for six years prior to the 1998 budget cycle. Mr. Malkasian stated it had taken six years because the legislation was difficult to draft and as a general rule, legislators do not like to increase regulation upon any industry. Mr. Malkasian stated in 1998 the Wisconsin Realtors Association continued to do a lot of work on the bill, and it appeared that everything had been done to line up the necessary votes in both the Assembly and the Senate to get the bill passed. Legislative records show that AB 334 passed the Assembly on February 11, 1998 by a vote of ninety-one in favor, five opposed. Mr. Malkasian stated that he knew from experience that if one branch of the legislature had already passed a bill with at least two weeks left in a session, then there was a good chance of getting the bill scheduled for a vote in the other branch. The joint resolution, which set the schedule for the legislative session, showed that the legislature would be adjourning on March 26, 1998. Mr. Malkasian stated that after the bill passed the Assembly, the normal procedure would be to make a request that the bill be scheduled in the Senate. If the bill was not scheduled, then the Wisconsin Realtors Association would have to start over.
Mr. Malkasian stated that it was getting near the end of the 1998 legislative session and AB 334 had still not been scheduled for a vote in the Senate. Mr. Malkasian knew that, as the Chair of the Committee on Senate Organization, the defendant had absolute control over the scheduling of AB 334 for a vote in the Senate. Because it was crunch time in Mid March of 1998, Mr. Malkasian stated that he approached the defendant after a floor session and asked him why the bill had not been scheduled for a vote in the Senate. When Mr. Malkasian approached the defendant to ask him about the scheduling of Assembly Bill 334, the defendant indicated that he could not talk to him about it immediately but they should talk a little bit later.
Mr. Malkasian indicated that shortly after he approached the defendant, he and the defendant had a meeting to discuss this matter. Mr. Malkasian's sole purpose for meeting with the defendant was to discuss the scheduling of Assembly Bill 334, which was extremely important to his organization. During this meeting, he asked the defendant what the problem was in getting the bill scheduled for a vote. The defendant responded, "Bill, you're asking for something but you have not earned it. You have not done anything to show me that it is in my best interest to work with you on this issue." Thereafter, the defendant made a request for a sizable campaign contribution. The defendant indicated that this campaign contribution would be of benefit to the Wisconsin Realtors Association and allow the association and the defendant to work on their agendas together. Before leaving the meeting, the defendant said words to the effect of, "Are we clear? Do you have any questions about this." Mr. Malkasian stated that there was no question in his mind that the defendant had linked a sizable campaign contribution from the Wisconsin Realtors Association to the scheduling of AB 334 for a vote. Mr. Malkasian knew that if the realtors failed to make the contribution, then the bill would not be scheduled and would die.
Mr. Malkasian stated that after meeting with the defendant, he spoke to the political director of the Wisconsin Realtors Association, Earl Joe Murray. Mr. Murray was in charge of the Wisconsin Realtors Association Political Action Committee money and would have had to have been involved in making the contribution.
Mr. Malkasian further stated that nothing like this has ever happened to him again with anyone else. He knew that tying money to legislation was not legal but he really wanted the bill to pass. Mr. Malkasian stated that he felt that the money was squeezed out of him in order to get the legislation passed and did feel victimized. Mr. Malkasian indicated that he currently was on speaking terms with the defendant and had access to the defendant's office. He stated that he feared retribution from the defendant if he had told authorities about what had happened in 1998 and that he did not want to destroy his association's ability to get anything done in the legislature.
Mr. Malkasian further stated that in addition to discussing this request with Mr. Murray, he also discussed the request with then State Senator Joseph Wineke. Mr. Malkasian stated that he did this because Senator Wineke was the chief sponsor of the bill in the Senate.
Your complaining witness spoke to Earl Joseph Murray who is a lobbyist and political affairs officer for the Wisconsin Realtors Association. Mr. Murray indicated that he had served in that capacity for approximately 15 years. Mr. Murray stated that in 1996 the Wisconsin Realtors Association had opposed the defendant in his election and that in the spring of 1998 they were still attempting to repair their relationship with the defendant. In the spring of 1998, the Wisconsin Realtors Association was working on a home inspector bill and the defendant had requested that the Realtors Association make a contribution to the Senate Democratic Campaign Committee in the amount of $6,000. Mr. Murray stated that the Realtors Association had given the Senate Democratic Campaign Committee only $3,000 instead of the entire $6,000. Mr. Murray then had a conversation with William Malkasian, and that Mr. Malkasian informed him that he had gone to the defendant to ask the defendant why he was blocking the home inspector's bill. The defendant had told Malkasian that the Realtors Association had not come up with the extra $3,000, and now the defendant wanted $4,500. Mr. Murray said that after receiving this information from Mr. Malkasian, he managed to come up with the $4,500 contribution by making an additional $3,000 contribution from the Wisconsin Realtors Association Political Action Committee and obtaining an additional $1,500 from a local real estate PAC. After the payment was made, AB 334 was then scheduled in the Senate and passed.
Regarding the additional $1,500 contribution beyond the allowed $6,000, Mr. Murray stated that he first contacted the Milwaukee Concerned Realtors Committee and they turned him down so then he had to go to the Madison Realtors PAC. Campaign finance reports filed by the Senate Democratic Campaign Committee confirm that a $3,000 contribution had been made by the Realtors PAC on or about February 16, 1998 and that on or about March 20, 1998, an additional $3,000 was received along with a $1,500 contribution from the Madison Realtors. Legislative records show that AB 334 was read a second and third time by the Senate on March 19, 1998 and passed.
Milwaukee County District Attorney's Office Investigator Aaron Weiss spoke to former State Senator Joseph Wineke, and Mr. Wineke explained that in 1997, as a member of the Senate, he was the Senate author of a bill that required home inspectors to meet standards and obtain a license from the State. The bill had very little opposition and passed the Assembly without much controversy. The bill also passed a Senate committee without much opposition. Mr. Wineke knew the bill would pass once scheduled for a vote in the Senate. Mr. Wineke stated that sometime during 1998, when the bill was awaiting to be scheduled for a vote in the Senate, he received a telephone call from William Malkasian who he knows as the Executive Director of the Wisconsin Realtors Association. Mr. Malkasian told him that the defendant had demanded that the Realtors Association make an additional contribution of $4,500 to the Democrats and that the defendant had stated, "This bill will not get scheduled unless I get another $4,500." Mr. Wineke stated that he remembered the event because it made him very angry. He knows that the Realtors Association then made the contribution and the bill was scheduled.
Mr. Wineke stated that the bill passed by a consensus in the Senate, which demonstrated the lack of any real opposition. Mr. Wineke stated that if the bill had not been scheduled, it would have effectively been killed for the session. Mr. Wineke further stated that as Senate Majority Leader, the defendant had virtual absolute control over the scheduling of bills because he served as the chairman of the Senate Committee on Organization. Mr. Wineke stated that the majority party has a majority of seats on the committee and that the other Democrats have to follow the defendant's plan or they face being removed from the committee. Mr. Wineke further stated that the bill passed in the "ninth inning" of the legislative session of March of 1998, and that bills that do not pass during the session are dead, which gives the Majority Leader tremendous power at the end of the session because of the ability to control what gets scheduled and what gets killed.
