April 12, 2011- Wisconsin Governor Scott Walker claims the state is broke. That, he says, is why it is necessary to enact draconian anti-labor laws and to restructure state government to dramatically increase the governor’s power.
Yet, despite the supposed financial crisis, Walker gave back $810 million in federal high-speed railroad transportation funding.
The governor must really hate trains, right?
The governor, who today celebrates his 100th day in office, likes some trains. He likes some trains a lot. For instance, despite all of Walker’s claims about a fiscal crisis, the new governor’s administration has already found $14 million for the Wisconsin & Southern railroad corporation. The money, most of what was distributed from the state’s Freight Railroad Preservation Program (FRPP) grants, will be used to preserve and upgrade freight rail infrastructure.
“Despite the fact one of Walker’s first moves as governor-elect was to reject $810 million in federal funds to build a high-speed passenger rail system in the state as part of a proposed Midwestern rail initiative, the state’s relationship with Gardner has flourished,” notes a Madison newspaper account of ties between the state and Wisconsin & Southern. “According to published news accounts, the company stands to gain substantially from a possible deal with the state to buy 50 miles of track between Madison and Reedsburg, and another 20 miles of track in Madison. Under the deal, the state would take ownership of the tracks, and Wisconsin & Southern would operate them, making the company eligible for more FRPP grant money, including potentially between $35 million and $60 million to rebuild the Merrimac Rail Bridge.”
How come Wisconsin & Southern rates?
It may not hurt that company president Bill Gardner has long been one of the state’s busiest campaign contributors—to Democrats and Republicans—or that, last year, Gardner went to the mat to back his old pal Scott Walker’s gubernatorial campaign.
Gardner was so enthusiastic in his support of Walker that he promised in an email to the then-candidate: “I will do everything I can do to get you in the Governor’s Mansion.”
Gardner proved to be a man of his word. He raised tens of thousands for Walker. In addition to his own substantial contributions, his employees and family members coughed up a stack of checks for $5,000 each.
It now turns out that the money was given illegally.
Following an investigation that began last year—when a former female “friend” of Gardner contacted law-enforcement officials—the rail company president has agreed to plead guilty to two felony counts stemming from a money-laundering scheme Gardner initiated on Walker’s behalf, and Wisconsin & Southern has paid a civil forfeiture of $166,900. Under the plea deal, Gardner is expected to avoid jail time but serve two years probation. Additionally, seven Wisconsin & Southern employees will pay $250 fines.
That’s the “single largest forfeiture ever paid to the Government Accountability Board (GAB) or to either of its predecessor agencies, the State Elections Board or the State Ethics Board,” says GAB director Kevin Kennedy.
How did the money-laundering scheme work?
According to the criminal complaint, Gardner’s own donations exceeded the state’s $10,000 limit for contributions to a gubernatorial candidate. And Gardner also asked employees to make $5,000 contributions to Walker’s campaign, he then reimbursed them himself and the employees with company money.