Three Billionaires Are Spending a Fortune to Re-elect Ron Johnson
The donors behind Wisconsin Truth PAC reaped millions from a tax break that Johnson helped usher into law.
By Donald Shaw and David Moore, Sludge
Three billionaires who have benefited from tax cuts pushed through by Wisconsin Republican Sen. Ron Johnson are funding a super PAC that is spending millions of dollars attacking the senator’s Democratic opponent.
The $22 million that Wisconsin Truth PAC has spent so far places it as the sixth highest-spending super PAC in the midterms cycle and the highest-spending single race-focused super PAC, according to OpenSecrets. The group was formed earlier this year by Republican consultants to back Johnson in the battleground race.
Building materials company CEO Diane Hendricks has contributed at least $6.5 million so far this year to the Wisconsin Truth PAC. Shipping and packaging supplies company CEO Richard Uihlein and his wife Elizabeth have given the PAC at least $3.5 million. Those figures are as of the most recent disclosures covering through the end of July, so it is possible they have donated more or that additional wealthy donors have contributed to the PAC since then.
Since May, Wisconsin Truth PAC has spent $12.8 million on running ads that oppose Democratic candidate Mandela Barnes, the lieutenant governor of Wisconsin, and $9.2 million on ads that support Johnson. In its anti-Barnes spots, the PAC paints Barnes as oblivious to the economic suffering of the middle class and claims that he supports increasing their taxes. The ads also claim that Barnes supports radical policies and tries to align him with the group of House progressives known as “The Squad.”
Tax Break Used by Billionaire Donors
In late 2017, with Republicans holding a slim majority in the Senate, Johnson pushed to add provisions to the Tax Cuts and Jobs Act that would expand tax breaks for “pass-through” companies, according to a ProPublica investigation. Saying he would withhold his vote, emails and meeting schedules reviewed in the investigation show Johnson pressing for the tax cuts for businesses that pass along income to their owners and aren’t subject to corporate taxes. When the provisions were included, Johnson took credit for the change on a conservative Milwaukee area talk radio show—saying, “obviously this is near and dear to my heart”—and voted yes to help usher the GOP tax bill into law.
The tax cuts have massively benefited the Uihleins and Hendricks, among other wealthy individuals. The Uihleins and Hendricks were able to bank $215 million in deductions in 2018 alone from the provision, and it could end up saving them more than a half a billion dollars over its eight-year life, according to ProPublica’s analysis.
Johnson had already benefited from the billionaires’ political contributions before he pushed to cut their taxes. The Uihleins and Hendricks contributed about $20 million to groups that backed Johnson’s 2016 re-election, ProPublica found.
A 2018 congressional report estimated that by next year, the vast majority of the pass-through deduction would go to those earning over a million dollars a year.
Johnson Profited From Tax Provision He Pushed
Johnson’s plastics company Pacur LLC directly benefited from the expanded tax break, he acknowledged to supporters at an event this year. Just months after securing the provision, which had the effect of making pass-through companies more valuable, Johnson initiated a process of selling his ownership stake in Pacur. When the sale of his shares went through on March 2, 2020, at the start of the coronavirus pandemic in the U.S., Johnson’s stake brought in between $5 million and $25 million, according to his financial disclosure—a hefty increase from the between $1 million and $5 million he had reported his shares as being worth in 2017.
With Wisconsin Truth PAC’s TV commercials blaring in living rooms, the cost of the ad barrage rivals the total amount spent by the candidates combined through the first half of this year. Other than the super PACs aligned with congressional leaders, only two outside spending groups have spent more this cycle for conservative candidates, according to OpenSecrets: the anti-tax Club for Growth, co-founded by Heritage Foundation economist Stephen Moore; and the Tea Party-tied Americans for Prosperity, which received seed funding from industrialists Charles and David Koch.
The only other disclosed donors to Wisconsin Truth PAC are the conservative Carry the Torch PAC, funded almost entirely with $300,000 from a group founded by Missouri businessman John Brunner, and Texas oil and gas company founder Jan Rees-Jones.
The Uihleins have also donated at least $308,700 to Ron Johnson Victory so far this year, according to FEC records. Ron Johnson Victory is a joint fundraising committee that splits its funding between multiple groups backing Johnson re-election, including his campaign, leadership PAC, the National Republican Senatorial Committee, and the Republican Party of Wisconsin. Hendricks has given Ron Johnson Victory $23,100 this year.
Earlier this year, Johnson stood up for “most of” an economic agenda proposed by Florida Republican Sen. Rick Scott that would raise taxes on nearly half of Americans while opening the door to drastic overhauls of Social Security and Medicare.
Hendricks, who is undertaking a yearslong effort to remake the city of Beloit, was a leading campaign funder of former Republican Gov. Scott Walker, who signed legislation weakening labor unions. The conservative megadonor Uihleins were reported by the New York Times to be the chief financial backer of groups involved in labor cases before the Supreme Court, including 2018’s Janus v. AFSCME. In her regular “From the President” columns in newsletters to Uline employees, Elizabeth’s letter took on “expensive government programs like healthcare” and mentioned that her household favors Fox News.