Volume 25, Number 1

Is Dark Money A Conduit For Money-Laundering?

Fred Schepartz

The following is a work of fiction. It should be noted that the author is a writer of science fiction, fantasy and horror, i.e., speculative fiction. On a personal level, the author is of a suspicious, if not paranoid nature.

Lately, I’ve been finding that I’m thinking a lot about Maurice Stans.

For those who don’t know or don’t remember, Maurice Stans served as Commerce Secretary during Richard Nixon’s first term, though he is better known for his link to the Watergate Scandal. Stans was finance chairman for the Committee to Re-Elect the President, aptly known as CREEP.

Stans does not appear in the film All The President’s Men, but perhaps one of the most dramatic moments of the film involves Stans, when it is discovered that somehow $25,000 of campaign donations collected by CREEP Midwest Finance Chair Kenneth H. Dahlberg had ended up in the bank account of one of the five people arrested in the Watergate break-in at the Democratic Party National Headquarters. Dustin Hoffman almost looks like he’s about to lay an egg when Dahlberg tells him that in early April he turned the check over to "the treasurer of the Committee [for the Re-election of the President] or to Maurice Stans himself."

Serious stuff. The $25,000 cashier’s check made out by Dahlberg, which was earmarked for Nixon’s reelection campaign, was part of a slush fund that helped finance the Watergate break-in as well as numerous other covert and illegal activities involving, among others, G. Gordon Liddy and E. Howard Hunt, the infamous White House Plumbers.

(It should be noted that Stans was never convicted of any crimes relating to Watergate. To his dying day, he pleaded innocence. Supposedly, the Washington Post published an article exonerating him sometime in the 1990s, though I was not able to find the article. Still, Stans is forever linked to the revelation of the White House slush fund, and cash in a safe in the White House.)

This revelation linked the Watergate break-in to the White House and was the beginning of the end for Nixon.

For good reason, most Americans were horrified and utterly appalled by Watergate. And for quite a number of reasons, not the least of which is that it shook the faith in the belief that when you make a campaign donation, it will be used to finance the campaign of a politician you believe in, not to finance covert and illegal actions (though maybe there are people out there who would be okay with that).

Dahlberg believed in Richard Nixon and acted in good faith to raise money for his re-election campaign. To Dahlberg, this was the ultimate betrayal.

In the wake of the Watergate scandal, Congress passed a slew of campaign finance reforms that established strict disclosure requirements for campaign donations, set specific limits for those donations, instituted public financing of presidential elections and established the Federal Election Commission (FEC) to be the campaign police.

Sounds like a good idea, doesn’t it.

That was 40 years ago.

So why is Maurice Stans on my mind?

Recently, I read an excellent article in the Madison Capital Times by political reporter and columnist Jack Craver about Dark Money in Wisconsin:

And suddenly, the notion of $25,000 of misappropriated campaign donations and a safe full of cash to be used for illegal and covert operations seems rather quaint.

But I’m getting ahead of myself. Time for a quick review.

Citizens United, 2010. The U.S. Supreme Court makes one of the worst decisions in its history by declaring that corporations have the same rights as people—as citizens. Money is speech. Therefore, restricting the ability of a corporation to make a campaign donation is tantamount to restricting its ability to speak freely. And it should be noted, the decision made by the court went above and beyond the relief sought by the plaintiff in the case.

As a result, political action committees, which make no contributions to candidates or parties, can accept unlimited contributions from individuals, corporations and unions. These so-called Super PACs can spend unlimited amounts of money to campaign for a particular candidate though they do have to disclose their donors.

Even more pernicious, however, is that Citizens United lifted restrictions on 501(c)(4) non-profit public advocacy groups. As long as these groups do not actually specifically advocate for a particular candidate, they are not subject to spending restrictions. And they do not have to disclose their donors.

Let me repeat: these non-profits DO NOT HAVE TO DISCLOSE THEIR DONORS.

This is Dark Money. It’s money that goes down the rabbit hole and ends up who knows where.

And in purple states like Wisconsin, it has a devastating effect on the political landscape and hence on public policy.

I don’t want to do a complete rehash of Jack Craver’s Cap Times article, but here are a few highlights:

Now I know I’m once again writing about Wisconsin, but again, what’s wrong with Wisconsin is what’s wrong with the United States. What Craver lays out in his article is just a snapshot of one state’s manifestation of Dark Money, but I’m sure the pattern is largely the same in most other states where it’s prevalent, with the same consequences. For instance, take a look at North Carolina. The rightwing takeover of North Carolina followed much the same playbook as in Wisconsin, as did the policy actions taken by Republicans who suddenly had complete, unchecked power for the first time in more than 100 years.

Now here’s where I go all Grassy Knoll. The first time I read Craver’s article, I felt dizzy. So many different organizations. So much money changing hands. Money going back and forth. Money going around and around.

It felt like a shell game.

Around and around she goes. Where she ends up no one knows.

I read the article and two words came to mind:

Money laundering.

Yeah, I know that’s a stretch, but I have this nagging feeling that I could very well be right even if I am merely a writer of speculative fiction engaging in speculation. I wish I had the time and resources to actually investigate this. Grew up with Woodward and Bernstein. Always wanted to uncover something big.

But think about it. There’s a ton of money being spent to get extreme right wing candidates into office and keep them there.

Where does that money come from?

Well, obviously there are plenty of people with deep pockets willing to prop up candidates who they either believe in or whom they believe will do their bidding.

But I also have to wonder if there are people out there who are sitting on hot money, on, shall we say, ill-gotten gain. For instance, maybe there are people who made piles of money off the sub-prime mortgage market. They’re sitting on a majorly hot potato, and they know they have to toss that hot potato to somebody else. What could be better than tossing that hot potato down the Dark Money rabbit hole? The money is nearly impossible to trace and then gets used to help elect candidates who will likely push for the kind of deregulation that will make those so-called illegal practices perfectly legal. Hey, no legal consequences next time around!

And if we connect the dots, we also have to realize that these non-profits could be laundering money dirtied through any number of illegal activities and through any number of sources, national and international. Let’s remember, that after Citizens United, President Obama did point out that it would be impossible to be absolutely sure that foreign money was not being used to finance political campaigns. If we take that to the next logical step, Dark Money could be a conduit to launder dirty money from all over the world.

And on top of that, I also have to wonder if there’s racketeering involved as well, with armies of lobbyists going all Jack Abramoff, peddling politicians as protection schemes.

Broke the law? Hell, we got folks running for office who can protect you and keep out those Dems who wanna make EVERYTHING you do illegal.

Plausible? Yes. Logical? Yes.

Again, this is merely speculation. I have no proof. I have no evidence.

And also, it is worth noting that if this were part of some money-laundering racket, the feds would be involved. However, for all we know, they may already be involved.

But once again getting back to Wisconsin, here’s something that is a bit interesting. Scott Walker is once again somehow involved with a secret John Doe investigation, which apparently involves issues uncovered in the first John Doe probe. John Doe II, as it has been called, started almost immediately after the first John Doe was closed. It is being conducted in five Wisconsin counties by a bi-partisan collection of DAs and apparently is investigating alleged illegal coordination between the Walker campaign and various advocacy groups, including Wisconsin Club for Growth.

Eric O’Keefe, Director of Wisconsin Club for Growth, is a target of John Doe II. We know this because of the reporting by Milwaukee Journal Sentinel reporter Daniel Bice. We also know this because O’Keefe has stated it publicly, even though John Doe proceedings are under gag orders, which could subject O’Keefe to contempt-of-court charges.

O’Keefe does not care. He told his story to the Wall Street Journal, claiming that the probe is nothing more than a partisan witch-hunt meant to silence those who would donate money to organizations like Wisconsin Club for Growth because investigators have subpoenaed donor lists.

Granted, as government business has become more politicized, as politics has become more polarized, the atmosphere is more rancorous than it has ever been. I know I often make purchasing decisions based on whether said company supports Scott Walker, so I perhaps can understand why O’Keefe is anxious to protect his donors.

But on the other hand, methinks the lady doth protest too much.

Frankly, O’Keefe, along with his various counterparts, seems absolutely desperate to stop John Doe II. Aside from leaking elements of the probe to friendly media in a bizarre effort to get in front of the story and gin up public opinion against the probe, they have filed suit in Wisconsin circuit courts as well as in Federal court to get a court order to stop the investigation. And in fact, in one of the Federal lawsuits, O’Keefe et al are not seeking to get the investigation closed; they are going after Milwaukee County District Attorney John Chisholm and his investigators personally, forcing them to have to hire legal help to defend themselves. To make matters worse, Wisconsin Attorney General J. B. Van Hollen has declined to represent Chisholm and the others named in the suit. And get this: while Chisholm’s legal counsel will be paid for by the state, the selection of legal counsel fell to someone appointed by Scott Walker!


I found it loathsome beyond words when Edwin Meese said that if you have nothing to hide, you have nothing to fear. Citizens should not be subject be subject to search and seizure without probable cause. Period.

That said, in the case of O’Keefe and his merry men, I can’t help but think, if you have nothing to hide, you have nothing to fear. There are legitimate reasons for this investigation. If you are confident that you have done nothing wrong, cooperate with the investigation and let things take their course.

But what if my scenario actually has some basis in reality? It’s hot potato. It’s button, button, who’s got the button.

Eric O’Keefe then goes from being bagman to being caught holding the bag.

In All The President’s Men, Deep Throat tells Robert Redford, “follow the money.” Money does leave a trace. You can shuffle it around like the best Times Square three-card-monte hustler, but eventually the music stops, and somebody gets left standing while everyone else is sitting. Money does leave a trail, and like neutrinos when they pass through Antarctic ice, it may be very difficult to get to, but it can be found.

* * *

Once again, I keep returning to Wisconsin and Scott Walker. Last month, Walker made big news, but not the way he would prefer. Upwards of 27,000 e-mails were released that show clear coordination between Walker’s campaign staff and the staff of his office as Milwaukee County Executive. Six members of Walker’s staff have been charged and convicted, but the Milwaukee County DA closed the investigation without charging Walker.

No one really knows for sure why Walker was not charged with a crime. The e-mails, I believe, provide somewhat of an answer. Reading through many of them, I get a strong impression that his staffers were and still are fiercely loyal to him. I have no idea why that is, but clearly no one was willing to testify against him.

But what of John Doe II? I seriously doubt that people like Eric O’Keefe feel any semblance of of loyalty toward Walker. If push came to shove, somebody like O’Keefe would roll over on Walker in a second because they always figure they can make another one, and maybe the next one will be just a little bit better and a little bit smarter. In other words, in such an instance, Walker is expendable, especially if there are major issues of national and even international jurisdiction and relevance.

* * *

Again, this is wild, baseless speculation on my part. But given that it is theoretically possible that this scenario could be true, we need to be seriously, seriously alarmed. And if it is actually true that our politically process is being funded partially by laundered money, then things are even worse than we think. Much, much worse.