Gov. Walker and the Democrats’ Dance: Shady Politics Behind the Milwaukee Bucks Arena (Updated)
By Steve Horn and Michael Arria
The Wisconsin state Assembly voted Tuesday to spend $250 million in public money on a new stadium for the Milwaukee Bucks. No one spoke against the measure, which passed on a 52-34 vote. The bill, which has already passed the Senate, awaits Gov. Scott Walker’s signature.
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The history of the push for new sports stadiums in the United States is a well-documented and oft-repeated tale of corporate welfare, bilked taxpayers, gentrification and dedicated fans held hostage by powerful and politically connected owners.
Shady details of such projects appear all the more ridiculous when juxtaposed with the real problems cities face. In his book “A People’s History of Sports in the United States: 250 Years of Politics, Protest, People, and Play,” Dave Zirin posits, “The building of publicly funded stadiums has become a substitute for anything resembling urban policy.”
Some may assume the quest for a new arena for the Milwaukee Bucks, then, amounts to new wine in an old bottle. Start the chorus now: The owners want a new facility for their National Basketball Association (NBA) team, and they want state politicians on board. They also want about $250 million in public funding, the same amount cut from the University of Wisconsin system in the 2015 budget, approved July 15 by the Wisconsin Senate in a 21-10 vote on SB 209 during a full-floor session lasting just 45 minutes. The arena deal bill awaits a final vote in the Assembly, expected to take place Tuesday.
But in Wisconsin, the political and economic chicanery seems even more ridiculous than usual because it involves a sophisticated public relations and lobbying campaign and some of the most powerful political figures in both the state and the country. Truthdig has learned many details about the operation based on an investigation of hundreds of documents obtained via Wisconsin’s Public Records Law.
But first the basics: Why build a new arena to begin with, and who sold it to whom? The answers to these questions begin to illuminate the great power politics of the arena in the Badger State.
An NBA Mandate
The Bucks, in Milwaukee since 1968 and recently earning a spot in the 2015 NBA playoffs, have a number of devoted fans who would hate to see their team go. But owners — who sports economists say overwhelmingly sit as the biggest beneficiaries of new arena deals — often hold fans hostage. This was the case with the Seattle-Supersonics-turned-Oklahoma-City-Thunder, with that ownership group threatening to and then eventually packing up and leaving town because Seattle citizens residents and politicians did not agree to fork over millions in tax subsidies for an NBA-mandated new arena.
The Bucks executives have begun implementing this script too with their new president, Peter Feigin, who late in the game registered as a lobbyist for the Bucks and began lobbying the Wisconsin Legislature to pass SB 209 in the days leading up to the passage of the Senate bill.
Feigin cited a provision in the owner’s agreement — obtained by Truthdig via Wisconsin’s Public Records Law — dictating that construction of a new facility must start in 2015 and declaring that the NBA would buy back the team and move it to “Las Vegas or Seattle” if that provision isn’t honored.
Before the metaphorical window closed, the Bucks got their publicly subsidized arena deal via SB 209. And they did so with some friends in high places in the Democratic Party.
Democrats’ Big ‘Dance’
In October 2012, the Bucks and the BMO Harris Bradley Center signed a six-year lease, which would turn out to be the last one ever signed between the two parties in the downtown arena.
“This six-year lease extension represents a long-term commitment between the BMO Harris Bradley Center and the Bucks, offering security for the next five years as the community continues to determine its potential path to a new arena,” Marc Marotta, then-BMO Harris Bradley Center board chairman, said in a press release at the time.
Before his recent death, Marotta was also a partner at the Milwaukee-headquartered firm Foley & Lardner, which has provided legal representation for the Bucks in theits quest to lock down a new arena. Marotta worked from 2003 to 2005 as head of the Department of Administration for the predecessor to Wisconsin Republican Gov. Scott Walker’s predecessor, Jim Doyle, a Democrat who now also works as a lawyer for Foley, a job he landed immediately after leaving office in January 2011. An old hand around Milwaukee, Foley has long helped to grease the skids for business interests in and about the city as well as statewide.
Another prominent Wisconsin Democrat involved with arena business wheelings and dealings is former U.S. Sen. Herb Kohl. In December 2013, Kohl — then the owner of the Milwaukee Bucks — announced his intention to sell the team to new owners.
“Over the next several months I will be considering broadening the ownership of the Bucks as a way to strengthen the franchise and keep it in Milwaukee,” Kohl said at the time. “I have retained Steve Greenberg, managing director of Allen & Co., as my adviser. I have done business with Allen & Co. for over 30 years, and they are a great organization.”
Steve Greenberg, is the son of baseball legend “Hammerin’ Hank” Greenberg, often servesing as middleman and is referred to as the “king of the sports deal” by Fortune magazine. Allen & Co. is a privately held investment bank headquartered in Manhattan, just four blocks from the NBA’s headquarters. The bank also gives big money to both Democrats and Republicans, according to OpenSecrets.org, and was a major contributor to Barack Obama’s 2008 presidential campaign.
Every summer, Allen & Co. holds a conference for billionaires at Idaho’s Sun Valley Resort. One of the 2014 attendees was hedge fund manager Wesley Edens of Fortress Investment Group, who in April 2014 was named co-owner of the Bucks alongside hedge fund manager Marc Lasry of Avenue Capital Group. Also appearing at Sun Valley 2014: NBA Commissioner Adam Silver.
In March of this year, Edens purchased three companies in a single week and recently sold his Central Park West apartment to Bruce Willis for $17 million. In 2007 he made the Forbes 400 list and today is valued at $2.5 billion. He has given maximum individual donations to both U.S. Sen. Cory Booker, D-N.J., and former U.S. Sen. Max Baucus, D-Mont., according to OpenSecrets.org.
Activists from the group Common Ground in Milwaukee have decried Edens as a slumlord for profiting from over a dozen foreclosed homes in Milwaukee via a company that Fortress Investment Group owns a majority stake in, Nationstar Mortgage. Edens serves as Nationstar’s chairman. Common Ground has launched a campaign called “Fair Play” and written a report titled “Envisioning Fair Play,” calling for public subsidies to go toward sports playing fields that are in terrible condition in Milwaukee County’s poorest communities.Lasry, worth $1.87 billion according to Forbes, has very close ties to the Clinton family. Not only has Avenue Capital employed Chelsea Clinton, but Lasry has also donated to the campaigns of both elder Clintons and invested $1 million in the hedge fund of Marc Mezvinsky, Chelsea’s husband.
Lasry’s son, Alexander — who now works as the Bucks’ vice president of strategy and operations, after completing a gig at Goldman Sachs — worked as an assistant to President Obama’s top White House adviser, Valerie Jarrett. Marc Lasry’s daughter, also named Chelsea, formerly worked as an intern for U.S. Rep. Rahm Emanuel, once the chief of staff for Obama and now mayor of Chicago.
After Hillary Clinton officially announced that she was running for president, Marc Lasry sent emails to other wealthy individuals challenging them to raise $270,000 for her in her first week on the campaign trail.
Lasry He was almost named U.S. ambassador to France by Obama but eventually decided against taking the gig. He raised over $888,706 as a bundler for Obama’s two presidential campaigns, according to OpenSecrets.org, and has also given over $460,000 to Democratic candidates for Congress. Campaign finance data found on the website FollowTheMoney.org also show that Lasry’s wife, Cathy, is also a heavy campaign contributor to Democratic candidates.
Other Democrats supportive of the arena proposal include Milwaukee Mayor Tom Barrett, loser of both the 2010 gubernatorial election and the 2012 gubernatorial recall contest to Republican Gov. Scott Walker, and Chris Abele, Milwaukee County executive. John Zapfel — Abele’s deputy chief of staff — formerly served as state scheduler for Kohl, who has offered $100 million of his own money toward building the new arena. Zapfel also worked for three years as an external relations manager for then-Gov. Doyle.
Both the city of Milwaukee and Milwaukee County have registered to lobby for the arena.
Further, language in the bill itself was actually drafted and negotiated for by Mike Wittenwyler, an attorney at the firm Godfrey & Kahn, which Truthdig has learned via legislative drafting files for SB 209. Wittenwyler was also the attorney for the now-disbanded PAC, Progressives United, run by former Democratic U.S. Sen. Russ Feingold, D-Wis., of Wisconsin, Progressives United, worked on Feingold’s first U.S. Senate campaign in 1992 and served as campaign manager and communications director for his successful 1998 re-election campaign.
Though some of the most prominent Democrats in the state have been involved in arena negotiations and bill-writing — and Lasry, one of the most prominent Democratic donors and fundraisers in the country, now co-owns the Bucks, having bought it from a former Democratic U.S. senator — Wisconsin Senate Democrats pretended to have been kept in the dark about arena negotiations.
Sen. Jennifer Shilling, D-LaCrosse, is a case in point. Just 10 minutes before voting “aye” for SB 209, Shilling pontificated on the Senate floor about how Democrats had been left out of arena talks by the GOP leadership.
“Three weeks ago, the Democrats were invited to the dance, and [in] one of my first meetings sitting in the governor’s conference room with legislative leaders, I was pretty blunt and said, ‘Look, all of you in this room … have been in this dance for months, the music has been playing and now it is the last song of the night, you are looking for someone else to dance with and take home,” Shilling said. “And that’s when we get invited to this party.”
A follow-up email sent by her spokesman, Tony Palese, to Truthdig confirmed that Shilling’s office had “been in contact with Mayor Barrett, County Executive Abele and other stakeholders.”
An email obtained by Truthdig further confirms that Milwaukee County lobbyist Eric Peterson — former chief of staff for Sen. Lena Taylor, D-Milwaukee, who also voted “aye” — actively negotiated writing the bill with Republican Assembly Leader Robin Vos’ office. Several other emails show city of Milwaukee lobbyist Jennifer Gonda actively involved in the bill-writing process.
‘Play It Forward’ — on Astroturf
Perhaps the biggest mover and shaker behind the bill’s passage is the powerful business lobbying group Metropolitan Milwaukee Association of Commerce (MMAC). MMAC has myriad close ties with Hillary Clinton’s potential opponent in the 2016 election, Wisconsin’s Republican Gov.governor, Walker.
MMAC’s advocacy began in earnest in the aftermath of the release of a nonpartisan study published in April 2013 by the city of Milwaukee’s Legislative Reference Bureau (LRB), which looked at several case studies and concluded that publicly funded sports arenas do little to lift up local economies.
The LRB study unleashed a wave of negative publicity for the prospective new arena. This included an editorial published by the Racine Journal Times, one of the state’s biggest papers, calling it “extortion.”
‘Cheaper to Keep Them’
Responding to the LRB jab and others like it, the Walker administration claims it would be cheaper to keep the arena in Milwaukee. The “cheaper to keep them” meme introduced June 4 in the form of a “Friday News Dump” by Walker seemingly originated with the powerful business lobbying group MMAC, a federation partner of the powerful U.S. Chamber of Commerce. A variation of the meme, “Pay Their Way,” entered the popular lexicon in January of this year during a presentation delivered by Walker to the MMAC.
The MMAC, registered to lobby the Wisconsin Legislature to pass a publicly funded arena deal, also runs an influential and similarly euphemistically named front group called “Play It Forward,” launched in March. The URL PlayItForwardWI.com feeds readers to a petition on MMAC’s group’s website, which they can then sign on to and have sent to their local legislative members.
A June 9 press release disseminated by Play It Forward announcing a rally lists Buddy Julius as the contact person; Julius runs the public relations and lobbying group Tthe Firm Consulting. He previously worked as a lobbyist for the Metro Milwaukee Association of Realtors, another founding member of Play It Forward along with the MMAC. The Firm’s website lists the MMAC as one of its clients.
Julius’ co-partner at The Firm is Ryan Murray, former deputy secretary and chief executive of the scandal-ridden Wisconsin Economic Development Corp. (WEDC) for the Walker administration, former deputy chief of staff for Gov. Walker and policy director for Walker’s 2010 victorious run for governor over Barrett. Murray also previously worked as communications director for Republican Senate Leader Scott Fitzgerald, a key point man for the Bucks’ arena effort. Fitzgerald’s younger brother and former Wisconsin Legislature colleague, Jeff, now lobbies for the Bucks.Metadata reviewed by Truthdig for the June 9 Play It Forward press release shows it was actually written by Steve Baas, one of the two MMAC registered lobbyists for the arena subsidy. Andrew Davis, the other MMAC lobbyist registered to lobby on behalf of the Bucks, formerly worked as director of external relations for Walker before getting the MMAC lobbying gig.
Milwaukee’s Marquette University, which refused to put a dime of its own into developing the arena even though its basketball team plays its home games at the Bradley Center, also announced its entrance into the Play Iit Forward coalition June 9. Craig Kammholz, chief financial officer at the MMAC, also is an adjunct professor with Marquette’s School of Professional Studies. Kammholz previously worked as budget director for Milwaukee County and as director of financial services for the city of Milwaukee.
Marquette’s athletic department has a Web portal pushing its fans to the MMAC Play It Forward petition website, which has an accompanying fact sheet about the arena deal that it points fans toward. That fact sheet was created by the MMAC and is housed on the MMACits website, with an external URL to the document-hosting website Scribd. The Scribd account holder for the document? None other than MMAC lobbyist Baas.
Documents obtained by Truthdig via Wisconsin’s Public Records Law show that MMAC distributed the fact sheet during a meeting at the office of GOP Sen. Howard Marklein, which means the sheet was likely one of the MMAC’s group’s go-to handouts for its lobbying meetings.
A comparison between the MMAC’s handout and Walker’s “Cheaper to Keep Them” Web page shows that the Walker administration lifted numerous statistics directly from groupMMAC’s sheet and placed them on the page making the case for an arena deal.
Laurel Patrick, press secretary for Walker, wrote in an email to Truthdig that it would be “absolutely inaccurate to claim that MMAC provided all data” to the Walker administration for its “Cheaper to Keep Them” plan.
“The jobs figure related to permanent and temporary construction jobs did come from the MMAC analysis and is partially based on a Marquette University Study estimating 2,100 permanent jobs will be created,” wrote Patrick.
Not mentioned by Patrick: The MMAC funded the Marquette study.
Marquette’s Jobs Study
The fact sheet that claims building the arena could create “15,000 permanent and temporary construction jobs” has but a single footnote citing these stats, pointing to a study the MMAC says it “ requested,” which was published in May 2014 and written by Marquette University’s chairman of the department of finance, Anthony Pennington-Cross. Cross, bBefore getting the Marquette job, he worked as a senior economist in the research division at the Federal Reserve Bank of St. Louis.
CBS 58 ran a fluff piece on the study featuring interviews with both Pennington-Cross and the MMAC’s Baas and said only that the study’s results were “music to the ears” of the MMAC, not that the study was MMAC-funded.
Pennington-Cross’ study, now prominently featured on the MMAC website, actually points to the arena creating about 2,100 permanent jobs, but the MMAC took the liberty of combining Cross’ his figures with those supposedly crunched by the Building Advantage union. The “15,000” figure has now been echoed by Walker’s Department of Administration, played a central role in Walker’s “Cheaper to Keep Them” rollout and was featured in an opinion piece by Marklein, opinion piece by Marklein, who was one of the aforementioned recipients of the MMAC fact sheet.
Robert Baade, a sports economist at Lake Forest College in Illinois, says these job figures are pure baloney.
“Ten thousand jobs?” Baede told the Milwaukee Journal Sentinel. “It can’t be true. Once the construction phase is over, there is nothing new. All the Bucks are doing is changing the location of the building.”
Tim Sheehy, president of the MMAC — who sits on the board of directors of the right-wing Wisconsin Policy Research Institute (WPRI) and formerly worked and lived in the basement of U.S. Rep. Jim Sensenbrenner, R-Wis. — defended the study when asked about it via email by Truthdig.
“Professor Cross applied his experience and expertise to look at the potential impact of development around the new arena, which was a different perspective than our past economic impact studies,” Sheehy stated. “His study, its methodology and its results stand on their academic merits. MMAC did not request, nor did we have any input on how the report was conducted, nor did we preview its results.”
Sheehy also confirmed that the MMAC funded the study, though he did not say how much money it provided. Neither Pennington-Cross nor the deans of Marquette’s Business School responded to a request for comment on the study and whether it violated principles of academic integrity. Marquette spokesman Christopher Stolarksi said they were all “on vacation” and not responding to emails at the time this article went to presswas published.
“MMAC is confident Marquette University has strong standards of academic integrity and that its faculty are not fond of throwing their ‘academic integrity’ out the window on minor pieces of research, or on any research for that matter,” Sheehy remarked via email.
One of Play It Forward’s non-MMAC members once went “ off message” on the MMAC group’s petition-hosting website and actually condemned its ally Mayor Barrett for not showing enough public support for the arena. The MMAC corporate creators and funders of the campaign, along with Barrett (calling himself an “honest broker”), immediately condemned the petition and distanced themselves from it.
That petition letter no longer exists on the Play It Forward website.
Promoting a Push Poll
The MMAC also funded and promoted what critics called a “push poll,” also housed on Baas’ Scribd page housed on Baas’ Scribd page and on the MMAC website. It concludes that 67 percent of residents “express broad support for both the arena and current funding options under discussion,” as explained in an MMAC press release.
The poll, also critiqued by academics in a Milwaukee Journal Sentinel article, was conducted just two weeks after a Marquette University School of Law poll concluded the opposite: fierce public opposition to subsidizing the arena. The Marquette poll showed only 9 percent of Wisconsin residents supporting public subsidies for the arena.Though the MMAC funded the poll, it did not actually conduct it, a job left to GOP polling firm the Tarrance Group. Tarrance also did polling for Walker’s 2012 recall election, his 2010 gubernatorial election and his 527 organization called “Our American Revival” and they now work directly for his presidential campaign.
Records obtained via Wisconsin’s Public Records Law by Truthdig from the office of Majority Leader Fitzgerald reveal that his office, the Republican Assembly Campaign Committee and the MMAC coordinated the media rollout for the poll with the popular right-wing media radio talk show host Charlie Sykes, described by watchdog group Media Matters as the “ next Glenn Beck.” Sykes was given the poll first and permitted permission to be as the first one to break the embargo.
Sykes’ wife, Janet Riordan, works as director of community programs at the Bradley Foundation, whose namesake is also that of the Bradley Center arena.
Walker’s presidential campaign chairman, Michael Grebe, is president and chief executive of the Bradley Foundation and was also on the board of directors of the WPRI. Sykes edited the WPRI’s now-defunct newsletter, Wisconsin Interest, itself funded by the Bradley Foundation.
Grebe — who has known Walker since his days as a pre-dropout student at Marquette University — also formerly worked at the law firm representing the Bucks on the business side of things, Foley & Lardner, where he is currently listed as a retired partner.
An email obtained via Assembly Leader Vos’ office shows that MMAC lobbyist Baas blasted out a press release on the poll’s results to Wisconsin legislators’ offices.
An Interlocking Directorate
Several Bucks local minority investors concurrently sit on the MMAC board of directors: MMAC Board Chair and Bradley Center Board Chairman Ted Kellner, WE Energies Chief Executive Gale Klappa, Hammes & Co. CEO Jon Hammes, Palermo Villa Inc. CEO Giacomo Palermo, and Generation Growth Capital Managing Director Cory Nettles.
Both Kellner and Klappa also sat on an MMAC internal panel created in October 2013 that studied “funding for Milwaukee’s cultural and entertainment assets, including a multipurpose downtown arena.” Also on the study panel: Walker presidential campaign chief Grebe.
Others may also be part of the Bucks-MMAC interlocking directorate, but several minority investors have chosen to conceal their identities, according to the Milwaukee Business Journal.
Walker, GOP Leadership Supportive; Kochs Skeptical
There’s an interesting twist here involving the Koch Brothers, generally allies of Walker and supporters of his economic agenda. Despite the assumption that their agendas are identical, on a new Bucks arena the Koch-funded advocacy group Americans for Prosperity (AFP) says it opposes construction of the facility.
Recently named AFP Director Eric Bott appeared on Wisconsin’s version of “Meet the Press,” “UpFront With Mike Gousha,” to speak about why his organization opposes a public tax subsidy for the arena, saying, “What we have here is a situation where the government is trying to socialize risks and privatize profits … and it’s not a proper way to use tax dollars.”
But Bott also confirmed with Gousha that AFP has no intentions toward primary GOP candidates who support the arena, nor will they punish one of the biggest beneficiaries of the group’s largesse, Scott Walker.
Other Republican representatives, such as Rep. Dean Knudson and Sen. Steve Nass, have also questioned the merits of the deal. Nass went so far as to call the nature of the deal akin to “blackmail” in a press release issued by his office.
Meanwhile, Wisconsin Legislature GOP leadership in the Wisconsin Legislature remains firmly supportive of the arena deal, and records obtained and reviewed by Truthdig show that both Assembly Majority Leader Vos and Senate Majority Leader Fitzgerald were involved behind the scenes in drafting the bill with Bucks lobbyists and attorneys.
A document obtained from Vos’ office via the Wisconsin Public Records Law outlines getting public funding for the arena — along with subsidizing the pro-charter school and anti-union Teach for America, supporting pro-charter school legislation and backing anti-union right-to-work legislation — as among his top legislative priorities for the 2015-16 Legislature.
‘Nothing Unites Folks Like Sports’
During the Wisconsin Senate’s full-floor session to discuss and vote on SB 209, Democratic Sen. Chris Larson said, “They say nothing unites folks like sports, and this vote we’re about to take proves that … and I think we’ve done a solid job doing that in the past few weeks, making sure we are rallying round our home team and coming up with the best deal to keep our home team our home team.”
It’s a perfect metaphor for what happened in Wisconsin. But whether it’s a good thing won’t be known for a while.
Steve Horn is a Madison, Wis.-based investigative journalist and writer for DeSmogBlog.com. His writing has appeared in Vice News, Al Jazeera America, Wisconsin Watch and other outlets. Follow him on Twitter: @SteveAHorn
Michael Arria is a journalist living in New York City. He is the author of “Medium Blue: The Politics of MSNBC.” Follow him on Twitter: @michaelarriaWait, before you go…
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