How Legal Loophole Allows Massive Campaign Donations
Wisconsin ended $10,000 cap, allowing individual donors to give millions.
Wisconsin State Capitol. Photo by Dave Reid.
Before 2015, the most a person could give in annual political donations in Wisconsin was $10,000.
What changed? A monumental 2014 U.S. Supreme Court decision you’ve probably never heard of: McCutcheon v. FEC, in which the high court ruled that annual caps on total political donations from one person are unconstitutional. Wisconsin Republicans, who control the legislature, acted quickly after the McCutcheon case, removing the $10,000 limit that had been state law.
That has created an ever-increasing flood of cash into the bank accounts of state political candidates, even for lower offices like legislators, in huge amounts never seen before. That money pays for, among other things, political ads that saturate the airwaves and jam mailboxes with fliers.
Billionaires are among the most active donors in this post-McCutcheon world.
For example, Reid Hoffman, the co-founder of LinkedIn, has given more than $7.5 million to the Democratic Party of Wisconsin in 2024 alone. Diane Hendricks, co-founder of the huge building materials company ABC Supply headquartered in southern Wisconsin, gave the Republican Party of Wisconsin more than $6.5 million this year. Illinois Gov. J.B Pritzker and George Soros gave the state Democratic Party more than $2 million and more than $1 million in 2024, respectively
“This is the Looney Tunes world that we’re living in right now,” said Nick Ramos, executive director of the Wisconsin Democracy Campaign, a nonprofit that tracks campaign finance spending in the state. “Everyone knows the game. It’s created this glorified money-laundering operation.”
While donations to Wisconsin political parties can be made without limit since the McCutcheon decision, a cap on donations directly to state candidates remains in place. But that cap has workarounds that billionaires and the parties have exploited.
A person can only donate a maximum of $2,000 to a candidate for state Senate. But that same person can donate $1 million to a political party in Wisconsin, and the party can give that $1 million to the candidate. It’s a loophole for avoiding direct limits to candidates.
Fallout from the McCutcheon ruling is similar to that from the much more widely-known Citizens United case, a 2010 U.S. Supreme Court decision that allowed corporations and unions to make unlimited independent expenditures in elections.
But in Wisconsin, “McCutcheon had a much greater impact than Citizens United did,” said Mike Wittenwyler, a Madison-based lawyer who has specialized in political law for the last two decades.
Wisconsin Democrats have proposed legislation to close that loophole by placing limits on donations to and from political parties, the Republican-controlled legislature has, so far, ignored those bills.
So in an example of beating someone at their own game, Democrats are using the lack of limits to swamp the GOP in a campaign finance system Republicans helped create. In recent years, left-leaning donors have overwhelmed right-leaning contributors in Wisconsin, leading to a massive fundraising advantage.
In 2024, the Democratic Party of Wisconsin raised nearly $57 million for the election, almost double that of the state GOP, which raised about $29 million. Democrats used much of it to blast Republican candidates with negative advertising on the airwaves and through the mail.
Democrats hope to take back the state legislature in 2026 for the first time in more than a decade. But if they do, will they still want to close a loophole they have turned in their favor?
“My biggest hope is that we will elect some people with some backbone who get to the negotiating table and deliver some bills that make sense and really scale back what has become an absolute monster,” Ramos said. “In this horror movie, it doesn’t look like the heroes are stopping it right now.”
The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.
This article first appeared on The Badger Project and is republished here under a Creative Commons license.
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