Source: Secret probe on Wisconsin conservative groups tied to Walker sparked by prosecutor’s 'hyper partisan' bias

FILE: Jan. 17, 2012: Protesters including labor union supporters at a rally at the Wisconsin State Capitol in Madison, Wisc. (AP)

The anonymous source who helped exposed the Milwaukee District Attorney's secret probes on GOP Gov. Scott Walker and his political supporters is purportedly a former employee and self-proclaimed friend of the prosecutor upset over the prosecutor's "hyper-partisan" bias, according to several published accounts.

The source in the so-called "John Doe" probes that have loomed over Wisconsin politics for roughly four years has been identified as Michael Lutz -- who after retiring as a police officer was an unpaid employee in Democratic District Attorney John Chisholm's office and later opened a law practice.

Chisholm revealed in a 2011 conversation that he started the investigation because he wanted to "stop" Walker's successes in reducing a budget shortfall by scaling back collective-bargaining agreements for state employees. And Walker's efforts made Chisholm's wife, a teachers-union boss, weepy, Lutz told a reporter hired by the conservative group America Media Institute, which first published a story Sept. 19.

Milwaukee Journal Sentinel political columnist Dan Bice told FoxNews.com on Wednesday that he also spoke to Lutz, who did not deny he was the key source named in the institute’s story.

"When I heard he was the source, I was interested in his story," said Bice, adding Lutz has been a long-time tipster in the Wisconsin political scene.

The John Doe probe is in fact the second of two related to Walker.

The first started in 2010 and focused on Walker aides and associates when he was Milwaukee County executive.

That probe has been closed, but the work was in large part the starting point for the second, ongoing probe that started in 2012.

The new probe largely centers on the type of political activity being done by the conservative groups and whether that work required them to follow state laws that bar coordination with candidates, requires disclosure of political donations and places limits on what can be collected.

The secret probes purportedly included armed law-enforcement officials conducting pre-dawn searches on the investigation targets.

Under Wisconsin law, third-party political groups are allowed to work together on campaign activity and engage in issue advocacy, but they are barred from coordinating that work with actual candidates.

Prosecutors have said in court filings that Walker and his top aides illegally raised money and coordinated campaign advertising and other activity with Wisconsin Club for Growth, the state Chamber of Commerce and more than two dozen other conservative groups during the failed 2011 and 2012 efforts to recall Walker for his dealings with the union contracts.

Prosecutors argued the groups’ efforts should have made them subject to state campaign finance laws.

Also on Wednesday, a federal court overturned a lower court's ruling halting the second investigation.

The ruling by the 7th U.S. Circuit Court of Appeals in Chicago is a defeat for Walker and conservatives who argued the investigation is a partisan witch hunt designed to chill political speech.

Walker is running for re-election this fall against Democrat Mary Burke and is considering a 2016 run for president.

The investigation has purportedly hurt fundraising efforts for Walker’s re-election bid, with top target Wisconsin Club for Growth neither raising nor spending a single dollar on the race.

The race is essentially deadlocked with about six weeks remaining, according to an averaging of polls by the nonpartisan website RealClearPolitics.

A source told FoxNew.com on Thursday that the investigations have at least achieved their goal of putting a chilling effect of political speech, calling the effort “pure genius.”

He also confirmed that Lutz was the source for the story, which now appears to be part of a counter effort to discredit Chisholm and thwart a potential 2016 re-election effort.

Lutz went to law school after retiring and works in private practice. He purportedly worked for about a year in Chisholm’s office as an unpaid employee while in law school.

Even with the ruling Wednesday, the investigation won't be able to resume immediately.

A state judge overseeing the probe also effectively stopped it in January when he issued a ruling quashing requested subpoenas, saying he did not believe anything illegal had transpired. That ruling is under appeal.

The 7th Circuit said that state courts are the proper venue to resolve legal issues with the case.

In February, Wisconsin Club for Growth and Director Eric O'Keefe filed a federal civil rights lawsuit to halt the latest investigation, which is called a John Doe probe because it is being done in secret.

They argued it was a violation of their First Amendment rights and an attempt to criminalize political speech.

No one has been charged in the latest probe, and prosecutors have said Walker is not a target.

A federal judge in May sided with the group and issued a temporary injunction blocking the investigation. The appeals court overturned that ruling, calling it an abuse of discretion.

The Wisconsin Club for Growth argues that coordinating with candidates on issue advocacy -- communications that don't expressly ask a voter to elect or defeat a candidate -- is legal and not subject to regulation by the government.

The Associated Press contributed to this report.