The recent disclosure that Gogebic Taconite donated $700,000 to a Wisconsin political group is the latest example of how the mining company and its supporters used money, influence and the allure of jobs to persuade lawmakers to relax state environmental regulations.
Gogebic zoomed into Wisconsin politics in 2011. The company had plans for a massive open pit iron ore mine, but it demanded changes in mining laws before starting a multimillion-dollar regulatory review.
The $1.5 billion project quickly drew support from Gov. Scott Walker, Republican lawmakers and Wisconsin Manufacturers & Commerce, the state’s largest business group.
In 2012, WMC used an issue ad to attack Sen. Jessica King (D-Oshkosh) for voting against the first of two mining bills. She was defeated by Republican Rick Gudex by 600 votes.
Taking its cue from Gogebic, WMC also urged leaders of a new pro-mining association not to collaborate with Democrats on a compromise mining bill.
Gogebic’s spending was thought to be relatively modest until court documents related to a Milwaukee County district attorney’s investigation of ties between Walker’s political organization and outside groups were unsealed Aug. 22.
Political donations from Gogebic representatives totaled $31,800 since 2010, according to theWisconsin Democracy Campaign, which tracks political spending. Walker received the most, $8,000, on Sept. 24, 2010.
Gogebic also had $199,346 in lobbying expenses between 2011 and 2013, state Government Accountability Board figures show. That put the company well down the list.
Meanwhile, the company was quietly spending hundreds of thousands of dollars more than was previously known with a conservative political group, according to documents from the 7th Circuit U.S. Court of Appeals.
The records were mistakenly unsealed in a case involving prosecutors’ investigation into alleged ties between Walker’s campaign and conservative groups.
Walker and the outside groups have said they broke no election laws, and two judges have blocked the investigation. Prosecutors have asked the appeals court to dismiss a lawsuit against them and allow the investigation to continue.
In court documents, bank records showed in 2011 and 2012 that Gogebic Taconite donated $700,000 to Wisconsin Club for Growth, a group that is organized so that it does not have to disclose its spending. It supports Walker, runs TV ads in key races and is directed by a campaign adviser to the governor.
“Because Wisconsin Club for Growth’s fundraising and expenditures were being coordinated with Scott Walker’s agents at the time of Gogebic’s donation, there is certainly an appearance of corruption in light of the resulting legislation from which it benefited,” prosecutors claimed in appeals court documents.
Gogebic disputes claim
Bob Seitz, a spokesman for Gogebic, disputed that claim. He said money to Wisconsin Club for Growth represented a shared mutual interest of two parties that favor mining and believe it would be a boon to the state’s economy.
“Mining has always been supported by the citizens,” Seitz said. “The economy, jobs have always been a priority with the citizens, and Club for Growth talks about those issues.”
If built, Gogebic’s mine on a remote stretch of hilltop forest in Ashland and Iron counties would run for four miles and plunge as deep as 1,000 feet.
The mine drew quick objections from environmentalists and Indian tribes who worried that plans for two pits, the waste rock and an adjacent processing plant would cause irreparable harm to a watershed that cuts through the Bad River band of Lake Superior Chippewa’s land and empties into Lake Superior.
But advocates see the project in a far different light — and a rare opportunity for northern Wisconsin. The mine would operate for 35 years, employ 700 workers and, according to a consultant, spur 2,800 spinoff jobs in transportation, housing and other sectors. The mine would rank behind We Energy’s Oak Creek power plant as the largest private investment in state history.
Sen. Tom Tiffany (R-Hazelhurst) helped push the mining bill through the Senate. Some areas of the north are seeing drops in population, he said. Iron County’s median income of $37,112 is 29% lower than the Wisconsin median.
“If we cannot utilize our natural resources in northern Wisconsin, we will continue to see economic decline,” Tiffany said.
Former Department of Natural Resources Secretary George Meyer said it’s impossible to say whether Gogebic’s political contributions served as the “tipping point” for Walker to favor the legislative changes Gogebic had demanded.
Walker said he had no role in Gogebic’s donation to Wisconsin Club for Growth, which was active in the 2011 and 2012 recall elections.
Was Walker aware Gogebic made the contributions to the group? “Not to my knowledge,” he told the Milwaukee Journal Sentinel on Aug. 23 during a campaign stop in Kenosha.
“I don’t know what went through the governor’s mind, since he has a natural pro-business perspective,” said Meyer, executive director of the Wisconsin Wildlife Federation and a critic of the mining legislation.
“But the optics on it are terrible.”
Sen. Tim Cullen (D-Janesville) said the advantage Gogebic had in giving to Wisconsin Club for Growth is that the money isn’t disclosed.
Said Cullen: “The broader story here is what Republicans wanted out of 2012 was to get a ‘Schultz-proof Senate,'” a reference to Sen. Dale Schultz, a moderate Republican from Richland Center who voted against mining bills in 2012 and 2013.
“It all came down to Jessica King so they could have an 18-15 majority.”
King provided the Journal Sentinel data from her campaign consultant in the race. It showed TV spending against her from outside groups totaled just under $2million in the last three weeks before the November election.
The spending included $964,603 from WMC and $919,400 from Wisconsin Club for Growth, the records show.
“When I saw that King lost, I knew they were going to pass the (Gogebic) bill,” Cullen said. He and Schultz are retiring at the end of the year.
Role of Gogebic, allies
Throughout the mining fight, Gogebic was never an idle bystander:
■ The Journal Sentinel reported in December 2011 that the company worked with a handful of GOP legislators and WMC on an initial mining bill that did not pass. The parties consulted with the DNR but not environmental groups.
■ In a July 2012 letter, James Buchen, WMC’s director of government relations at the time, urged representatives of the Wisconsin Mining Association to refrain from discussing legislation with Democrats and environmentalists until after the election because Republicans could regain control of the Senate and have more influence over a new bill.
Buchen said it was important for Gogebic to sign off on changes in regulations. “We need to take our cues from the company on the substance of any legislation and the strategy to get it enacted,” he wrote.
The association’s chairman was Tim Sullivan, former chief executive officer of mining equipment maker Bucyrus International. Sullivan met with Meyer to discuss legislation that could help Gogebic and appease some in the environmental community.
“I was amazed at how close we were philosophically,” Meyer said of Sullivan.
■ In January 2013, legislative drafting documents showed that the company and its lawyerscontinued to play a key role in writing the bill, seeking changes involving wetlands, navigable waters and groundwater before the bill was circulated among lawmakers.
Defenders of the new mining bill say safeguards are in place and the project won’t be built if Gogebic shows it is polluting.
Last week, Gogebic said it will return to the field in 2015 to gather more data to show regulators the mine’s potential effect on streams and groundwater. It had hoped to be done by the end of the year.
“That shows there is a very robust environmental process,” said Scott Manley, the current vice president of government relations at WMC. “People who talk about the company getting a free pass to pollute, it’s just absurd.”