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By Chuck Nowlen
They all warned me that Bill Gerrard would never grant an interview for a magazine profile. “It’s not good for a lobbyist to get his name in the paper,” said one prominent state Democratic legislator, one of many heavy hitters -- including Governor Tommy Thompson and right-hand man James Klauser -- who consider Gerrard a longtime personal friend.
Besides, the insiders told me, why talk to the press when you're still battling a five-year-old influence peddling case that could conceivably bring your most powerful buddies down?
“He’s an old fox,” said the legislator “I’m sure he’s already been on phone to all his friends telling them not to talk to you either.”
And so I was a little surprised when Gerrard telephoned personally last December about my written request for a question-and-answer session. “Good morning Chuck! How ya doing today? ... That’s good, glad to hear it!” he boomed, apparently quite sincerely, even though he’d never met me in his life.
“Listen I’d love to accommodate you, but I’ve got a problem,” he said, sounding very much like “Uncle Bill,” the nickname he’s known by in nearly every nook and cranny of Wisconsin’s corridors of power. “I’ve got to be out of town for the next few weeks, and if I’m going to see you, I’d like to spend some time -- you know, I don’t want a rush job.”
He eventually concluded: “So why don’t you call me in January? ... My best to you and your family, and have a merry Christmas, okay?”
Well, the first 10 days of the year came and went; and despite my follow-up inquiry at the 11th hour of this month’s story deadline, I never heard back from him.
Still, I have to admit that I couldn’t summon up many hard feelings, especially after finding other sources (some on the record; many off) who gave me a fairly detailed account of the way Bill Gerrard operates. And, anyway, don’t you have to sort of admire a guy who gives you one of the nicest bum’s rushes you’ve ever had in your life?
“I can’t think of another person who’s liked by so many Democrats and Republicans alike,” says Madison attorney Bill Dixon, a former Democratic state Banking Commissioner who’s no stranger to insider politics himself. “If legitimately bad things can be verified about Bill Gerrard while you are working on your story, then I’ve totally lost my ability to judge integrity.”
Dixon, who met Gerrard when they both worked for Gerrard’s onetime business associate, former Governor Patrick Lucey, is joined in his praise by Republican state Administration Secretary James Klauser: “Bill Gerrard is a very caring man. He’s worrying about people all the time … and I know he goes out of his way to help people, sometimes when they don’t even know it.”
Klauser, by the way, lives in the same condominium complex as Gerrard and is involved in what some think could become a bombshell influence-peddling suit filed by former state Investment Board Director Marshall Burkes. Burkes is seeking civil damages for his 1989 firing, which he insists came because he fought Gerrard’s efforts to sway Investment Board decisions through Klauser and other friendly board principles. Gerrard and others, of course, see it far differently.
“Unfortunately, libel laws don’t apply in court proceedings; you can say whatever you want to about someone in that arena,” Klauser says, calmly dismissing the Burkes case as “something that will work itself out.”
“Bill is a friend, but we do differ on things; we scold each other on things,” Klauser adds.
“And he WILL scold me, which is often good for me because lot of people won’t do that. … And we both know the appropriate lines that shouldn’t be crossed.”
We’ll get further into the Burkes case later. Meanwhile, another Gerrard chum, former state legislator and UW Regent Herbert Grover, describes Gerrard as a man who offers genuine “personal friendship, as opposed to the stereotypical lobbyist.” Gerrard’s also extremely devoted to his six grown children, one of whom died suddenly of heart failure in 1993. That devastated Gerrard, according to many sources, prompting him to partially tame what was once a break-neck, workaholic’s passion. His own health problems were also a factor.
At the same time, Grover acknowledges that Gerrard remains “a heat-seeking missile in authority and relationships. He knows where the power exists, and he uses it through concerted influence, and give-and-take.”
Of course, you don’t get to where Bill Gerrard is without rubbing a few people the wrong way. And one former associate -- no political bit player in his own right -- finds Gerrard’s pat-on-the back, good-old-boy style downright offensive.
“I think he’s a legend in his own mind,” said the source, emphasizing that his wife now avoids public functions where Gerrard might be present. “He’s an in-your-face, bombastic, grandstanding kind of guy who won’t hesitate to break right in if you’re standing there talking with a group of people. I mean, he definitely knows all the players around, and he may have his good points; but I’ve never been the recipient of any of them. … Let’s put it this way: He’s not on my Christmas card list, that’s for sure.”
One thing nobody can dispute, though, is that few, if any, private citizens enjoy the network of friends and access to power that the 70-year-old Gerrard has cultivated over the years. The founder of one of the state’s largest real estate firms in his home town, LaCrosse, Gerrard served on the state Real Estate Examining Board from 1947 to 1969 as an appointee of former Republican Governor Vernon Thompson. He was chair of the state Democratic Party from 1971 to 1975 and headed Jimmy Carter’s 1980 fund-raising campaign in Wisconsin. He is also the only UW regent ever appointed by governors from different political parties. (Lucey and Lee Dreyfus.) Gerrard’s last regent term ended in 1989.
“He’s politically ecumenical,” chuckles Grover, while the legislator quoted at the beginning of this story laughs: “He’s in it for the cash; he just loves the action. … I don’t think you can place Bill Gerrard or Pat Lucey or Tommy Thompson, for that matter, in the category of ideologues.”
Or, as former Democratic state Assembly Speaker Tom Loftus once quipped when asked about Gerrard’s political affiliation: “He’s a member of the INCUMBENT party.”
In his 1990 campaign for governor, Loftus would later hold up alleged Gerrard-Klauser links to the firing of Marshall Burkes as part of the “shadow of government” that Loftus claimed had developed under the Thompson administration.
And while that may have been inflated campaign rhetoric (Loftus declined an interview request), it’s hard to argue about Gerrard’s mastery of private arm-twisting in recent years. A millionaire many times over, he was the highest-paid lobbyist in the state last year, earning about $170,000 (or about $1,000 an hour) during the first seven months of 1994 alone. The second-place finisher during that time period earned about $464 an hour.
Gerrard’s clients included one of Klauser’s bread-and-butter former lobbying accounts, the Wisconsin Chiropractic Association ($15,000 for about 14 hours of work during the first half of 1994); Ashley Furniture Corp., of Arcadia ($10,000); and GTECHY Corporation, of Rhode Island ($6,000 a month, plus about $3,400 in expenses for five hours of work on a single legislative proposal).
He also got $46,000 from Philip Morris Inc. during the first half of 1994 as part of a powerful coalition that beat back several proposed new anti-smoking measures in Wisconsin. According to a report by the Milwaukee Journal, Gerrard’s take in that battle was more than the COMBINED lobbying budgets of three non-profit anti-smoking agencies working against him.
“That’s by far and beyond by a multiple of eight or nine what even the most highly paid attorney in Madison gets,” Michael Pritchard, executive director of the Wisconsin Center for Public Representation, noted in a September Journal interview.
In the process of all this, Bill Gerrard has pulled one or two strings on everything from forming a new bank in his hometown to the hiring of a new UW System president in the 1980s. He is credited with clearing hurdles for a new public-TV tower in LaCrosse in 1973 and for chiropractic coverage in state-employee health insurance a decade or so later. He also apparently had a hand in the emergence of dog racing in Wisconsin, reportedly jumping ship on a potential Chicago candidate for the Kenosha track license after the company refused to hire him as their representative. Gerrard reportedly later worked for the Alabama company that got, then eventually surrendered, the contract.
Then there were all the deals for Gerrard’s private real estate clients, including more than $68 million in state Investment Board contracts during the late 1980s. In all, Gerrard was the driving force behind about $120 million in state contracts during Tommy Thompson’s first term alone, according to a 1990 Milwaukee Journal profile.
How does he do it? Political acumen, hard work and almost 40 years of close personal contacts, surely. But the experts say lobbyists and real estate brokers don’t stick around for long if these assets aren’t built on something more solid.
Phil Dyer, a retired executive at LaCrosse’s KTY Radio, where Gerrard sold ads in the early 50s, notes that personal loyalty has been at the foundation of Gerrard’s dealings throughout his career. One example was his early jump onto Dreyfus’s bandwagon in 1978, Dyer recalls. His starting-gate support of Tommy Thompson was another.
“Now tell me what Bill could possibly have gained when, really, there weren’t many who gave either Dreyfus or Thompson much of a chance at that point,” Dyer says. “Bill’s no Johnny-come-lately, that’s for sure. He doesn’t wait until the guy’s ahead to give him his support and stick with him.”
He was even loyal to certain private alliances in the face of opposition from his boss Pat Lucey during the party-chairman years. The grandson of the man who founded a major LaCrosse-based trucking firm, Gateway Transportation, Gerrard actively supported allowing 65-foot trucks on Wisconsin highways in the early `70s, a cause that a Wisconsin State Journal columnist referred to at the time as “among the most hated” by Democratic liberals. A devout Catholic, Gerrard also pushed the Wisconsin legislature for state aid to parochial schools when the official party line was firmly against it.
Gerrard was equally as steadfast in his support of incumbent Jimmy Carter when the former president looked like he couldn’t get elected peanut inspector in Plains, Georgia.
Presumably, Gerrard could have easily found favor in the 1980 Ted Kennedy challenge: Kennedy after all, was often recruited for Democratic fund raisers during Gerrard’s four years as party chair.
As it was, when Gerrard traveled to New York as a Carter delegate to the Democratic National Convention, he was a point-man opponent of a move to free up delegate voting allegiances based on election-primary results -- even as the former president’s chances of beating Ronald Regan appeared almost astronomical. Carter, meanwhile, was preparing a convention-crowning acceptance speech in which he blundered Hubert Humphrey’s name as “Hubert…Horatio…HORNBLOWER!”
Herbert Grover also remembers Gerrard insisting on driving him to the Mayo Clinic one day when Grover told him he wasn’t feeling well. (Gerrard is a frequent Mayo Clinic visitor himself, with heart problems and an abdominal aneurysm.) Klauser, too, reports that Gerrard habitually “scolds” his closest friends about taking better care of their health.
“There are a lot of lobbyists who come into an office waving a campaign check, but Bill walks in the door saying, ‘How are you, pal? How’s your wife? How’s your family?’ – and he really, sincerely means it,” says one high-level Democratic operative. “So, is Bill Gerrard a phony? Absolutely not. He gains entrée because he’s Bill Gerrard. He’s been around for 20 years; he knows the game better than anybody else; and he knows almost everybody you can think of. More important than all this though: Bill gains entrée because you know that if he says something, you can count on it.”
“He’s fast; he’s flamboyant; and if he can outwit you, he will,” adds Republican Bill Kraus, who ran Dreyfus’s campaign. “But there’s also no question about his word. If he says he will do something, he will.”
And while Gerrard’s reputation for integrity has remained intact over most of his two-decades-plus career (including a massive state Ethics Board lobbying probe a few years ago), he has had a few close calls:
*In 1975, he was questioned about his involvement – as a onetime Real Estate Examining Board chair – in the dismissal of board action against developer Jeffery DeGaynor, who also happened to be a big Lucey contributor. Gerrard insisted that DeGaynor’s clearance was purely coincidental.
*In 1978, Gerrard almost single-handedly got a bill through the legislature that would have allowed state industrial revenue bonding for hotel and motel developments near medical centers. Championed by Assembly Speaker William Bablitch (now a state Supreme Court justice), the bill was represented as a boon for the Marshfield Clinic in Bablitch’s district, but in fact it pertained mainly to a Gerrard project in LaCrosse. Gerrard failed to disclose his financial interest to either Bablitch or acting Governor Martin Schreiber until the eve of the bill’s signing – although he swore that he thought he’d mentioned it earlier. When Schreiber found out, he abruptly vetoed the bill, with Bablitch insisting that he’d been “used.”
*In 1987, Gerrard (again, “almost single-handedly,” according to one local newspaper) spearheaded a special session of the state Legislature in which an anti-takeover law was passed to prevent an Australian company’s buyout of the LaCrosse-based G. Heilman Brewing Company. The law boosted Heilman’s stock, and four days later, the brewery accepted an even higher bid from the Australians. “Boy, were we suckers,” said Madison state Rep. David Travis at the time. “Never before in the history of the state Legislature has state government allowed itself to be so cynically maneuvered by one business for its own gain.”
Most politicos agree that it’s almost impossible for a player of Gerrard’s stature to escape some rough spots along the way. (“It’s tough to swim the English Channel without encountering some tide,” says Grover.) But, according to some observers, the Marshall Burkes case could conceivably grow into a tidal wave that sinks both Gerrard and, potentially, Tommy Thompson’s aspirations for higher office.
The major figures in the dispute are fired executive director Burkes; Gerrard; former board member Ed Hales, Gerrard’s attorney and longtime confidant who also served with him on the Board of Regents; Investment Board member Klauser; and Klauser’s former board-alternate Nick Hurtgen, a LaCrosse native who is also Gerrard’s nephew.
Be forewarned: It’s a monster of a case to review. (There are five years of records in two offices at Madison’s City County Building.) Basically, it all boils down to this – and we’ll start with Burkes’ side: Gerrard’s close association with Hales, Klauser and Hurtgen gave him inside access to privileged Investment Board information, greasing the skids for Gerrard’s clients and netting Gerrard a huge chunk of cash. Toward the end of the dispute (Burkes was fired in June, 1989), Burkes insisted that Gerrard dodged efforts to keep him at arm’s length, ultimately seeking Hales’s, Hurtgen’s and Klauser’s help in getting Burkes dismissed.
A few salient details – again, starting with Burkes’s claims:
Court records indicate that Burkes – hired in late 1987 – was a bit leery from the get-go of Gerrard’s influence on the Investment Board, which at the time handled about $20 billion, including one of the 25 biggest retirement accounts in the world.
The two were introduced by board member Hales for the first time in November of ’87, at which time Burkes says Gerrard “immediately began dropping the names of all the high-level officials he knew.” Later, at a January ’88 Madison Club luncheon, Gerrard referred to Burkes as a potential breath of fresh air compared to Ken Codlin, Burkes’s predecessor. Codlin “just didn’t have it,” Gerrard insisted in his characteristically loud style; he was sure Burkes would be different.
Over the next couple years, Burkes said he worried about Gerrard’s tendency to buy drinks for the crowd at Investment Board receptions and other state events. At one, Gerrard also allegedly offered Burkes’s wife a job at the UW. After another, he gave Burkes a down coat from the LaCrosse-based Company Store (a firm that would later figure prominently in Burkes’s demise) and “appeared offended” when Burkes insisted on paying for it. And after still another meeting, Gerrard gave Burkes two tickets to the Purdue-Wisconsin football game, later returning Burkes’s check for the ticket’s face value.
A turning point in the affair came when the board approved a multi-million-dollar bailout for the Company Store – after the firm’s bank gave a thumbs-down to refinancing. When the Company Store still reported a $6 million loss after the bailout, Burkes was furious and accused Gerrard of getting confidential related information from his pals, intimidating board staff and hiding the loss from other trustees.
During all of this, Burkes said Gerrard got into the habit of bypassing normal investment-consideration channels (especially the required project evaluations by independent outside advisers). He also waltzed freely into Investment Board staff offices to discuss project proposals, sometimes speaking directly to board members about his clients instead.
Burkes also claimed that Gerrard had received or was scheduled to receive more than $900,000 in finders fees for projects approved over the years. Although the fees were paid by the clients, not the board, Burkes insisted that the board consider “full disclosure” of such fees – a move that drew the ire of Hales, who said it was “none of the board’s business” and reportedly warned Burkes that it would “hurt his future.” At the regular June 1989 Investment Board meeting, Burkes’s full-disclosure initiative died for lack of a second.
After that, Burkes launched into an attack on the board’s strategy for salvaging the Company Store bailout. He also had a June 13 meeting with Gerrard, asking him to provide full fee disclosure and reduce the amount of future fees on his own. Gerrard replied that he would discuss it with one of his associates and get back to him. He never did.
Shortly after that meeting, Burkes claims he got a call from Board Chairman Eugene Martin, who told him he was “getting his tit in a wringer” in challenging Gerrard and his powerful friends on the panel. State Senator Gary George then phoned to warn that the Hales, Gerrard, Klauser and Hurtgen ties “go back 20 years.”
Less than a week later – the day after Burkes had a “whistleblower” meeting with state Attorney General and Auditor officials, worrying about retribution for criticizing Gerrard and company – Burkes got a call in California notifying him that he’d been fired. In the aftermath, it was also discovered that Hales had been paid by Gerrard for some legal work in certain investment deals, but had failed to abstain during board votes on Gerrard’s proposals.
If Burkes portrays Gerrard and his board acquaintances as a nest of favor-trading snakes, court documents submitted by the defense paint Burkes as a paranoid power freak who deserved firing and who twisted the facts to save his own skin. In one court document, for example, board member Richard Lillie (a retired physician) worried that Burkes might be “mentally unstable” after he burst into tears when the board rejected one of his pet agricultural projects in early 1989. Lillie also claimed that Burkes had ordered Lillie to talk only to HIM – and not even to other trustees – about the project, which Burkes had represented as the brainchild of “some old friends” of his own.
Following that meeting, other board members talked to Burkes’s eventual successor, Patricia Lipton, about the fact that Burkes’ support was “quickly eroding.” Despite some informal pressure to get Burkes to change his behavior (his interpersonal skills were criticized in a preliminary 1988 job performance evaluation), Lillie again concluded at a May ’98 meeting that Burkes was “unstable and paranoid.” In addition to the weeping incident, poor budget preparations and a lack of regular staff meetings, Lillie specifically mentioned:
*Burkes’s role in the selection of an independent international manager for certain board investments. According to documents, Burkes refused to consider a Ft. Lauderdale firm because he didn’t want to sign travel vouchers to a city with the reputation as “a playground.” At the same time, Burkes rejected a Chicago bank because “it didn’t sound international enough.”
*Burkes’s “irrational and autocratic” management style. Other court documents, for example, describe a vindictive Burkes deliberately trying to scuttle the board’s efforts to save the shaky Company Store bailout. A staff member reported that Burkes alienated one bond fide workout investor by insisting on unreasonable financing conditions. When the staffer questioned this, records show, Burkes reminded him of his “probationary” employment status, then intimidated other staff into presenting a rosy workout picture at formal board meetings.
Court documents also point out that only four of 50 Gerrard Investment Board proposals were accepted between 1983 and 1989. All were reviewed fully by staff and went through normal approval channels – in spite of whatever informal discussions Gerrard had in agency offices. The four successful ones involved a single Gerrard client, Lincoln Properties, whose initial 1986 proposal “exceeded expectations” after being approved. Board members considered Lincoln Properties exempt from an “outside adviser” evaluation policy, which went into effect after Lincoln’s initial project.
What’s more, Burkes’s initial finders-fee estimates for Gerrard turned out to be exaggerated by at least $600,000. Burkes had also ignored the fact that the fees were typically split among several partners, with Gerrard getting only a portion of the 1.2 – 2 percent that a board experts admitted was perfectly legal and within industry standards.
Many court documents emphasize that Gerrard’s clients, not the board, paid the fees. And with regard to getting insider information, Gerrard points out that the Investment Board is a state agency subject to open records laws. He just knew better than others what to ask for and where to look.
As far as the drinks, the football tickets, the job offer for Burkes’s wife and the Company Store down coat were concerned, Gerrard offered the following explanations:
*Anxious to make a home-town gathering a success, he bought drinks for some guests at a LaCrosse board reception because the room was full of his closest friends, and they were starting to “queue up” at the bar, rather than talking and mingling. Gerrard added that others bought rounds as well without any objections from Burkes.
*Burkes had expressed interest in attending the Purdue-Wisconsin game, and Gerrard wasn’t going to be using the tickets he got as a regent. He returned Burkes’s check to him because regents’ tickets are free.
*Regents are deluged with job requests and typically refer people to appropriate university departments in response. That, Gerrard said, is the only thing he intended to do for Mrs. Burkes.
*Burkes once admired a similar coat worn by Gerrard and gave him size and color preferences before Gerrard’s usual weekend trip home to LaCrosse. Gerrard says he was anything but offended by Burkes’s payment.
Gerrard didn’t make any bones about his longtime friendships with Hales, Klauser and Hurtgen, either. Quoting state statute, one Gerrard court document says: “This is as it should be. … (Government) representatives are drawn from society and therefore shouldn’t be without all personal and economic interests. … Ethical conduct needs to distinguish between minor and inconsequential conflict … and those that are substantive and material …”
Besides, Gerrard noted, the state Auditor has found no evidence that his friendships had earned him any preferential treatment whatsoever.
Burkes’s lawsuit (which also includes sealed depositions in which both Hales and Gerrard reportedly took the Fifth Amendment) has bounced from Dane County Circuit Court to an appeals court, then to the state Supreme Court and, finally, back to the circuit court. A trial is expected to be scheduled for this fall, but already some observers are choosing up sides.
“There is absolutely no doubt in my mind that there was real corruption there (especially with regard to the Company Store matter),” a source close to the Investment Board now insists. “The question really is whether it can be proved.”
“I mean, there was no way in protecting the board’s fiduciary responsibilities that (the Company Store) loan should ever have been made … and Gerrard was involved up to his neck,” the source adds. “There are definitely felony implications if all this is proven. … And there is no question that Bill Gerrard was involved, along with the current administration.”
Adds yet another source: “I think the stakes are big politically for Tommy Thompson and Jim Klauser. This is not the sort of thing they’d want to take with them in a national campaign.”
That doesn’t seem to faze Klauser, who notes that Gerrard has voluntarily withdrawn from Investment Board activities in the wake of publicity over the lawsuit.
“Is he hurt by all of this? Sure. Anyone gets hurt when their integrity is impugned,” Klauser says. “But, like I said, it’s one of those things that will just have to work itself through.”
Another of Gerrard’s friends, meanwhile, is more pointed: “If anything, Marshall Burkes thought he was above it all and saw Bill Gerrard as a threat to his authority. … I mean, sure, stuff like this goes with the turf. Bill’s very close to the governor and a lot of other people, and he’s built up a huge well of good will around here based on friendship, trust and caring about people. And – you know what? – that pisses people off!”
“But I’ll tell you one thing that I think is significant,” the source adds. “This lawsuit has not affected Bill Gerrard’s reputation, and it hasn’t hindered his influence. Nor has it colored the way insiders at the Capitol look at Bill Gerrard at all.”
In other words, stay tuned.
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