Wednesday, November 20, 2013

POLITICS - The Money Trail, How 'Crossroads' Buys Elections

"Crossroads’ Tax Return Shows Big Donors, But Doesn’t Name Them" by Kim Barker, ProPublica 11/18/2013


The dark money giant Crossroads GPS, launched by Republican strategist Karl Rove, told the IRS it raised almost $180 million in 2012, including one donation of $22.5 million, another of $18 million and another of $10 million.  Fifty donations were for $1 million or more.  Because the group is a social welfare nonprofit, none of the donors have to be made public.

The details come from the group’s 2012 tax return, which Crossroads made available today at their Washington office.  We picked up a copy and you can see it here.

Crossroads raised more than twice as much in 2012 as it collected in 2010 and 2011 combined.

The group also reported spending almost $75 million on direct and indirect campaign activities.

Crossroads GPS, also known as Crossroads Grassroots Policy Strategies, is the largest social nonprofit active in elections.  The group was created after the Supreme Court’s 2010 Citizens United ruling opened the door to unlimited corporate and union spending on elections, to super PACs and to hundreds of millions of dollars in anonymous money.

In Crossroads’ application for nonprofit status in 2010, the group told the IRS that while it planned to spend money on elections, “any such activity will be limited in amount, and will not constitute the organization’s primary purpose.”

In the 2012 cycle, Crossroads told the Federal Election Commission it spent almost twice as much on political ads as the next most active social welfare nonprofit, Americans for Prosperity, backed by conservative billionaire brothers Charles and David Koch.

Crossroads is in the crosshairs of campaign finance watchdogs, who have criticized social welfare nonprofits for exploiting loopholes in tax and election rules to be able to pour millions from undisclosed donors into campaigns.  Democrats have also targeted Crossroads for special attention.  In 2012, the lawyer for President Barack Obama’s reelection campaign asked the FEC to force Crossroads to register as a political committee and disclose its donors.  (So far, that hasn’t happened.)

“There is no way in the world that $20 million-plus contributions, $10 million-plus contributions, that are funding campaign ads should be kept secret from the American people,” said Fred Wertheimer, the president of Democracy 21, who has worked to rein in outside spending in politics for decades.

Social welfare nonprofits are allowed to spend money on elections, but they are also supposed to be able to prove that social welfare is their primary purpose.  ProPublica has focused extensively on how many of these groups have poured much of their resources into political races.

Tax returns are one of the few places in which groups are required to detail both their revenues and expenditures and justify their social welfare mission.  But the returns are often filed more than a year after an election.

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