POLITICS
05/10/2016 09:07 am ET Updated May 10, 2016

Two Of America’s Richest Men Secretly Tried To Sway Montana’s Judicial Elections

In the post-Citizens United world, these billionaires have found a new way to attack a state law they don't like.
A public defender running for state justice was attacked for being a public defender.
Fotosearch via Getty Images
A public defender running for state justice was attacked for being a public defender.

WASHINGTON -- Ed Sheehy was driving home one day in the middle of his 2012 run for a Montana Supreme Court seat when he received a call from a local newspaper reporter. The reporter wanted to read Sheehy the transcript of a blistering new radio ad.

“Fortunately, I pulled over before he did,” Sheehy recalled for The Huffington Post.

The ad assailed Sheehy’s work as a state public defender in a high-profile death penalty case several years earlier, arguing that it showed the lawyer had “activist values” unsuitable for the state’s highest court.

At the time, Sheehy was one of only a few public defenders in Montana who could take a capital case; he had all the pertinent qualifications and had already handled eight capital cases. He was assigned to defend Tyler Miller, who had been charged with, and ultimately pleaded guilty to, murdering his former girlfriend and his daughter on Christmas Day 2010. Sheehy sought a life sentence for his client. “That was an argument I had to make,” Sheehy said, noting that public defenders are duty-bound to use all available arguments to aid their client’s defense.

But the ad spun that case as evidence that Sheehy was some sort of bleeding heart liberal. “It was a slap in the face for victims’ families and justice,” intoned the ad’s female narrator. “Now Ed Sheehy wants to take his activist values to the Montana Supreme Court.”

Sheehy was dumbfounded. “Before 2012, nothing like that had ever happened in a judicial race in Montana,” he said.

Montana’s judicial elections are officially nonpartisan -- candidates do not have a D or R next to their names. Moreover, the candidates are bound by a code of conduct requiring them to be "scrupulously fair and accurate in all statements."

Even more surprising than the appearance of the anti-Sheehy ad was its source: not his main competitor and the ultimate victor in the judicial race, Laurie McKinnon, but a brand-new, little-known conservative nonprofit group. Called the Montana Growth Network, it had some big money behind it.

Billionaire Charles Schwab was the man behind a huge donation to the Montana Growth Network.
Justin Sullivan/Getty Images
Billionaire Charles Schwab was the man behind a huge donation to the Montana Growth Network.

Spending to sway judicial elections has been increasing across the country for nearly two decades, but it soared after the Supreme Court’s 2010 Citizens United decision, which served to legalize unlimited electoral spending by corporations, unions and individuals. The court’s decision led to the overturning of Montana’s Corrupt Practices Act, which banned direct and indirect corporate political spending in the state. The Montana law had been passed in 1912 after powerful mining corporations, like the Anaconda Copper Mining Company, essentially took over the state’s political institutions, particularly the judiciary.

Montana is one of many states where funds have poured into judicial races from groups unaffiliated with judicial candidates -- the kind of supposedly independent spending that Citizens United empowered. As the amount of money has increased, so too have the nasty attacks.

“What we’ve been seeing over the past 15 years is interest groups paying increased attention to state courts,” said Alicia Bannon, senior counsel for the democracy program at the nonprofit Brennan Center for Justice.

While the influx of money, particularly post-Citizens United, has had profound effects on all kinds of political campaigns, it’s particularly troubling in those judicial races. “Judges are hearing cases involving campaign contributors, and it does create troubling conflict concerns,” Bannon said.

This was certainly the case in Sheehy’s 2012 race, although the public didn’t know it at the time.

The Montana Growth Network was launched that year by Jason Priest and Ed Walker, then both Republican state senators. It went on to spend $900,000 on the state Supreme Court race, more money than the Sheehy and McKinnon campaigns combined. Because the group was organized as a 501(c)(4) nonprofit under the federal tax code, it was not required to disclose its donors. Any interest those donors had in the race was obscured, as was any potential conflict that the group’s favored candidate, McKinnon, might later face on the bench.

Three years passed before the identities of the billionaire businessmen funding the ads came to light, following an investigation by Montana’s Commissioner of Political Practices. The December 2015 probe found that the Montana Growth Network had violated state election laws and forced the nonprofit to disclose its funders.

The largest portion of the group’s money came from two of America’s richest men. San Francisco billionaire Charles Schwab, the founder of the eponymous discount brokerage firm, donated $300,000. James Cox Kennedy, the Atlanta-based chairman of media giant Cox Enterprises, gave $100,000. Schwab is worth a reported $6.4 billion, while Kennedy is worth $10.2 billion -- ranking both of them among Forbes’ wealthiest 400 Americans.

If they can’t win in court, they’ll change the court. They’ll change the justices that make the decisions. John Gibson, president of the Public Land/Water Access Association

The probe also revealed that the two billionaires had a direct stake in a case moving through Montana’s courts at the time of the 2012 election. While neither are residents of Montana, they both own large estates there. The two properties include streams and rivers to which the owners would like to restrict access. But Montana has some of the most liberal laws for recreational waterway use in the country: The state’s 1972 constitution allows broad public access to those waterways.

“The stream access law allows public access to the stream to do whatever you want to,” said John Gibson, president of the Public Land/Water Access Association, a volunteer organization. “You can go down there and throw rocks or wade or swim or float or whatever, inner-tube, trap, whatever you want to do under high water mark. A lot of people simply just go down there and play -- kids do in the summertime.”

Schwab and Kennedy don’t like that law -- at least as it applies to their land. They’ve spent more than a decade challenging it in court, sometimes with the support of other wealthy out-of-state landowners. By 2012, they had already lost at least three cases before the Montana Supreme Court.

In the mid-2000s, Schwab and a handful of other rich landowners sought to restrict access to a slough that ran off the Bitterroot River, arguing that the extensive work they had done to channelize and irrigate the slough meant it no longer qualified as a natural waterway -- a prerequisite for the open access granted under state law. In 2008, the state Supreme Court ruled unanimously against Schwab and the other landowners.

Kennedy has been in and out of court attacking the law since 2000. His more recent challenges have revolved around whether the two barbed wire fences he put up at bridges along the Ruby River and a third on nearby Seyler Lane, all three of which are on his property, are illegally preventing public access to the water. The Public Land/Water Access Association filed suit to try to force Kennedy to remove the barriers.

Two wealthy men tried to cut off public access to waterways that ran across their property.
Rebecca Stumpf/Wonderful Machine via Getty Images
Two wealthy men tried to cut off public access to waterways that ran across their property.

In 2008, a judge ordered the barriers blocking the Ruby River bridges to be removed, but not the Seyler Lane fence. The Public Land/Water Access Association appealed on the Seyler Lane issue, and the case eventually went to the state Supreme Court. That court ruled in favor of the open-access advocates, directing that Kennedy’s blockades be removed. The billionaire then countersued, challenging the constitutionality of the entire stream access law.

This was the state of the legal battle when Kennedy donated $100,000 to the Montana Growth Network in a bid to shape the membership of the high court.

“If they can’t win in court, they’ll change the court,” said Gibson, of the Public Land/Water Access Association. “They’ll change the justices that make the decisions, and that’s ongoing.”

A spokesman for Kennedy provided a written statement on his behalf to The Huffington Post. “Jim Kennedy is a strong advocate for democracy, and in no way would attempt to interfere with the results of an election,” said the statement, which also noted that Kennedy has been “an active part of the Montana community for nearly two decades” and referenced his many contributions to Montana nonprofits.

Schwab did not respond to a request for comment.

But the situation looks fairly clear to Bruce Farling, executive director of Montana Trout Unlimited, a conservation group that has worked to defend the stream access law against these challenges.

“Those guys wrote big checks to this outfit [Montana Growth Network] to write big checks to [support] McKinnon, and I can’t think of any other reason they would be interested in that race other than the fact that their stream access cases have shown up before the Montana Supreme Court,” he said.

One of two $50,000 checks written by James Cox Kennedy to the Montana Growth Network.
Montana Commission of Political Practices
One of two $50,000 checks written by James Cox Kennedy to the Montana Growth Network.
A $200,000 check written by Charles Schwab to the Montana Growth Network.
Montana Commission on Political Practices
A $200,000 check written by Charles Schwab to the Montana Growth Network.

McKinnon went on to win the 2012 race by a margin of 56 percent to 44 percent. She took a seat on the state Supreme Court as Kennedy’s constitutional challenge was underway. Although the court ultimately upheld the stream access law by a 5-2 vote, McKinnon -- who declined to comment for this story -- was one of the two justices who sided with Kennedy.

While their interest was the most obvious, Kennedy and Schwab were not the only 2012 donors to the Montana Growth Network that might have had business before the state’s highest court. Oil and gas companies operating in Montana -- including Continental Resources, Boich Companies, Great Northern Properties and Shale Exploration -- all donated to the nonprofit. None of the companies responded to requests for comment.

The U.S. Chamber of Commerce donated $100,000 to the Montana Growth Network in 2013 to support its efforts in legislative races.

After its involvement in the 2012 judicial race, however, the Montana Growth Network suffered some serious setbacks. Two board members resigned the following year, citing differences over the group’s direction. Cofounder Priest pleaded guilty to charges of assaulting his wife and daughter in 2014. And the 2015 ruling from the state’s Commissioner of Political Practices effectively ended the group’s operations.

Still, a string of elections influenced by “dark money,” including the 2012 judicial race, sparked Montanans’ concerns about money flowing into local politics from unknown sources. Bipartisan legislation requiring groups like the Montana Growth Network to disclose their donors went into effect in 2015.

Sheehy, meanwhile, is back at work as a public defender. He threw his hat in the ring for another open seat on the state Supreme Court in 2014, but that didn’t pan out. He said he’s concerned about the future of his state’s democracy, now that he sees who has been funding attack ads. He is especially worried that the new post-Citizens United campaign spending dynamic will send Montana back to the days when major corporations and the rich men behind them ran the state.

“When Montana passed its Corrupt Practices Act, it was designed to get corporations out of the judiciary -- because where I work now in Butte, which is my hometown, the Anaconda Company controlled the judges that were on the bench,” Sheehy said. “That was the idea, to let people have a right to a true, fair trial.”

The surreptitious campaign to defeat him four years ago suggests that right has already been degraded.

CONVERSATIONS