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Scott Walker's big win delayed by federal appeals court

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May 3, 2014: Wis. Gov. Scott Walker speaks at the Republican party of Wisconsin State Convention in Milwaukee.

A federal appeals court on Wednesday blocked a judge's ruling that halted a probe into Wisconsin Gov. Scott Walker's 2012 recall campaign, a setback for the potential 2016 presidential hopeful.

A three-judge panel of the 7th Circuit Court of Appeals in Chicago also said prosecutors could not be ordered by U.S. District Judge Rudolph Randa to return or destroy evidence they had gathered during the nearly two-year-old investigation.

The probe has dogged Walker as he runs for re-election this year and eyes a possible 2016 presidential bid. The Wisconsin Club for Growth, a conservative group with close ties to Walker, filed the civil lawsuit against prosecutors to stop the investigation that began after Walker won a recall election in 2012.

Prosecutors have been operating under the theory that the club and 28 other conservative organizations illegally coordinated with Walker's campaign during the state's partisan recall elections of 2011 and 2012. It has since blown up into a five-county investigation through the cooperation of the Government Accountability Board, the state's election and campaign watchdog, according to Randa's filing.

Wednesday's victory for investigators may be short-lived.

While the appeals court said the Tuesday injunction was in error, it said the judge could reinstate his order by determining that a separate appeal by prosecutors is frivolous. Prosecutors, including Milwaukee County District Attorney John Chisholm, had argued that they were immune from being sued by the Club for Growth.

If the judge determines that appeal is frivolous, the stay could be lifted, although prosecutors could ask for another one, the appeals court said.

The Club for Growth's attorney declined comment. The attorney representing prosecutors did not immediately respond to a request for comment.

The granting of the stay is the latest twist in the ongoing drama of the investigation that has largely been conducted in secret. The setback for Walker and his supporters came roughly 24 hours after the ruling in their favor, which they hailed.

"Obviously the reason this witch hunt was launched was to impugn the integrity of the governor and he has been completely vindicated," said Mark Graul, a Republican strategist who ran President George W. Bush's re-election campaign in Wisconsin.

The Tuesday ruling will help to silence Walker's critics who tried to use the investigations against him, said Mike Maistelman, a Milwaukee attorney who represented Democratic and Republican elected officials in a variety of cases.

"Walker and his spin doctors around him are going to say this was a political endeavor, and that argument was backed up by the federal court," Maistelman said.

Walker, speaking to reporters following an event in Milwaukee before the stay was issued, said he hadn't read the judge's ruling and didn't have much to say about it. He said he expected the case would continue on appeal and he'd do his best not to let it distract him.

"I don't think there's any elected official in America who's been more scrutinized than I have," Walker said. "This is just another stage in that. But we tried not to lose sight of our larger charge."

His expected Democratic opponent for re-election, former Trek Bicycle Corp. executive Mary Burke, had no immediate comment.

Walker made a national name for himself by taking on public sector union collective bargaining in 2011. The following year, he became the first governor in U.S. history to win a recall election — despite the first investigation being an issue during the campaign.

That investigation lasted three years and ended in 2013 with six convictions, including three of his former aides. Walker was interviewed but never charged.

Under Wisconsin law, prosecutors can launch John Doe investigations that are overseen by judges and conducted largely in secret.

Walker's political opponents have been keeping a close watch on the second probe, which has taken on even greater significance as Walker considers a 2016 presidential run.

The investigation focused on alleged illegal coordination between and among Walker's recall committee and "all or nearly all right-of-center groups and individuals in Wisconsin who have engaged in issue advocacy from 2010 to the present," according to Randa's ruling.

Randa, who was appointed by President George H.W. Bush in 1992, issued a preliminary injunction in favor of the Wisconsin Club for Growth, finding that the investigation an infringement on the conservative group's free speech rights.

One of the targets of the investigation is Walker campaign adviser R.J. Johnson, who allegedly controlled a "hub" of issue-ad groups in 2011 and 2012 in coordination with Walker's campaign. Johnson did not immediately return an email or message left on his cellphone Wednesday.

Despite the ruling, Democrats won't necessarily stop trying to use the investigations to taint Walker, said Patrick Guarasci, a Democratic consultant and fundraiser.

"There is enough for both sides to make use of the investigation for their own political ends, but the everyday person is going to be very confused by the back and forth on this issue," Guarasci said. "Maybe that was the objective of the Walker side all along — to cause confusion."

Watchdog.org and The Associated Press contributed to this report.