A Wisconsin railroad magnate accused of illegally donating to Gov. Scott Walker's campaign said Monday he would plead guilty to felony charges but didn't realize he had done anything wrong when he asked employees to donate tens of thousands of dollars and then reimbursed them.
Wisconsin & Southern Railroad Co. president and chief executive officer William Gardner was charged with one count of excessive political contributions and one count of unlawful political contribution. Both charges are felonies that carry a combined maximum sentence of seven years in prison and $20,000 in fines.
Gardner struck a plea bargain calling for him to plead guilty. Prosecutors in exchange agreed to recommend he serve two years on probation. His company, meanwhile, has paid a $166,900 forfeiture, and seven employees have each agreed to pay a $250 forfeiture, state election officials said.
Gardner said in a statement he cooperated with investigators and didn't realize he had violated the law, which limits individual gubernatorial contributions to $10,000 per election and prohibits furnishing money to others for political donations made in their names.
In Wisconsin, it is also illegal to give corporate money to political candidates.
"My employees had every right to assume that what I was asking them to do was legal. But it wasn't. I failed them and everyone else miserably," Gardner said.
According to court documents, state election officials and Milwaukee prosecutors launched a secret investigation into Gardner's campaign donations in May 2010 after Gardner's ex-girlfriend, angry that he hadn't returned all her things, alerted election officials to his activity.
In April 2010, Gardner's ex-girlfriend warned the attorney mediating the property dispute between them that she had been speaking with state election officials about the contributions. She said she had been withholding Gardner's name but threatened to reveal it if she didn't get all of her things back.
Gardner responded directly to her, saying "Knock yourself out. I did nothing wrong and have broken no law ..."
Investigators learned that Walker's campaign managers believed Gardner was working to raise $100,000 for them. Between November 2009 and April 2010, Gardner reimbursed himself out of the railroad's expense account for $10,000 in donations he made to Walker and an additional $4,000 he gave to the Assembly Democratic Campaign Committee and former Democratic Assembly Speaker Mike Sheridan.
Walker stressed that his campaign promptly returned any known contributions from Gardner.
"We immediately returned the contributions and cooperated with the GAB," Walker said. "We were very helpful in all that."
The Assembly committee has since donated its contributions to charity, election officials said. Sheridan, who lost his re-election bid in November, also has given some of his donations to charity, they said.
Gardner said in his statement he never tried to hide any of the reimbursements. Wisconsin & Southern relies heavily on state grants and loans to operate, according to court documents, but Gardner said the Walker campaign never offered anything in return for his support.
"My sole aim, which I went about in an illegal, wrong and stupid manner, was to support candidates I thought would do a good job," he said. "I had an obligation to make sure what the law was before getting myself, the company, and others involved. But I didn't."
The governor echoed those sentiments. Walker said, "If he wanted something, he would have gotten me to be supportive of Madison-to-Milwaukee, and quite the opposite happened. That was the time I was really revving it up in the opposite direction."
The railroad's lobbyist, Ken Lucht, testified he prepared a summary of Wisconsin campaign contribution limits for Gardner in January 2010.
A friend of Gardner's ex-girlfriend also told investigators that he contacted Walker's campaign and was assured by a campaign staff member that the campaign "had methods to detect illegal contributions and that they were confident that there were no illegal contributions coming into the Walker campaign."
This case is similar to another against Kenosha trucking magnate Dennis Troha, who was sentenced in 2008 to six months of probation for exceeding federal campaign donation limits by funneling political donations through family members. Troha, a millionaire who wanted federal trucking rules relaxed and unsuccessfully sought a casino in Kenosha, was a major donor to Democratic Gov. Jim Doyle and Republicans.
- State Journal reporter Mary Spicuzza contributed to this report.