Walker poses for holy pictures, but his fundraising past is shady

Before Scott Walker poses for too many holy pictures about making Milwaukee County clean when it comes to contracts and political contributions, a little historical review might be in order.

Walker, quick to try to benefit from questions being raised about a state travel contract, issued a news release saying he signed a resolution two years ago forbidding political contributions to "an official that has final authority over awarding a contract while that contract is being negotiated." The state should do the same, Walker said.

If that reform had been in place sooner, it might have had an impact on Walker's own relationship with Bear, Stearns, the investment and bonding firm that won huge contracts with Milwaukee County and also raised considerable amounts of money for Walker's campaign.

In July 2004 there was a flurry of stories and questions about how Bear, Stearns won a big county contract to underwrite a $100-million bond issue in 2003. The questions arose after Nick Hurtgen, a Bear Stearns rep and pal of Walker, was indicted in Illinois for influence peddling. The Journal Sentinel reported:

Bear Stearns was not the low bidder on the underwriting deal, but county officials said it was a strong bidder because of its size, depth of experience in public financing and the structure of its deal.

Later in the story, we learn more about the fundraiser and the connections. (This is long, so I'll help out by highlighting some salient parts):

Hurtgen has ties to both Walker and [Walker Dept. of Administration Secretary Linda] Seemeyer. Hurtgen and Seemeyer were top aides to former Wisconsin Gov. Tommy G. Thompson and are friends, she has said.

Walker's campaign turned to Hurtgen and Phil Prange, another former Thompson aide, for help in attracting Illinois donors to a January 2003 fund-raiser for Walker in Chicago.

The timing of the fund-raiser, just after the Bear Stearns selection, is being called into question, although Walker has said it was coincidental. He and Seemeyer have acknowledged their ties to Hurtgen but said the links did not influence the awarding of the bond contract.

Hurtgen did not return a call seeking comment Thursday.

Walker went to Chicago to tap into a new market in a larger city with higher-dollar donors, instead of asking Milwaukeeans to give again so soon after his 2002 special election victory, said John Hiller, Walker's campaign treasurer.

The allegations involving Bear Stearns in Illinois started spilling out three weeks ago with the disclosure by the Chicago Sun-Times of a sealed federal lawsuit that alleges that Hurtgen and others had pressured a Naperville hospital to select Bear Stearns to underwrite a $200 million construction project.

The suit also says that Hurtgen had similarly pressured the Janesville, Wis.-based Mercy Hospital to choose Bear Stearns for financing a new $80 million hospital in Crystal Lake, Ill. The suit says Hurtgen, in both cases, offered regulatory approval for the projects in exchange for the financing jobs. Both projects were subsequently approved by a state panel...

The claims have prompted a tidal wave of reaction in Illinois, including state and federal investigations...

The suit also says Hurtgen was involved in a kickback scheme related to the selection of Bear Stearns as underwriter for a $10 billion borrowing deal last year for the Illinois pension fund. The firm's fee for the job was $8 million.

The suit doesn't provide details on the alleged kickback.

But the allegation has renewed scrutiny into an $809,000 fee Bear Stearns paid to a company consultant, Robert Kjellander, for work he reportedly did on the deal. Kjellander is a Republican National Committee member from Illinois.

The company has said its selection was based solely on merit.

Kjellander was one of more than two dozen Illinois contributors to fund-raisers that Walker held last year in Chicago, according to campaign records. Kjellander, of Springfield, Ill., gave Walker $1,000.

Kjellander also heads President Bush's Midwest campaign. Walker heads Bush's Wisconsin campaign.

Another Walker contributor, Stuart Levine, also figures in the Illinois case involving Bear Stearns. Levine resigned from the state hospital planning board last month and also resigned a position on the Illinois board that oversees teacher pension funds.

Levine and his wife cumulatively gave Walker $5,000, according to campaign finance records. The maximum individual donation the county executive could accept during that election cycle was $3,000.

Hiller, Walker's campaign treasurer, said Kjellander, Levine and other donors at Walker's Chicago fund-raisers last year give to many political candidates in Illinois and around the country. Their presence was not related to Bear Stearns, he said.

"They like to be supportive of people who agree with them," Hiller said. He added that Walker was attracting notice from Republican activists because he won election in traditionally Democratic Milwaukee County.

Bear Stearns has had a large role in municipal bond work in Wisconsin over the past 15 years. It managed $1.5 billion in state bond deals from 1990 to 2000 and had the lead role in financing high-profile projects including Miller Park, the Midwest Express Center, and the $1.5 billion state borrowing on its tobacco industry lawsuit settlement.

So Scott Walker wants to do for state government what he did for county government? I'll bet he can't wait to get started.