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.

About 150 of these nonprofits reported spending more than $254 million
in 2012 on ads, phone calls and mailings. Most of that money
— more than 85 percent — was spent by conservative groups.

Crossroads GPS and its sister super PAC, American Crossroads, provide a blueprint of how these outside-spending
groups work. The Rove juggernaut gives potential donors the option of giving to
a super PAC, which has to report its donors, or to a social welfare nonprofit,
which doesn’t.

Some people and corporations prefer the anonymous option.
American Crossroads, for instance, raised about $117.5 million in the 2012
cycle, according to the FEC, as opposed to the $180 million Crossroads GPS
collected.

Both super PACs and social welfare nonprofits can accept
unlimited contributions, unlike candidates and regular political action
committees.

The Wall Street Journal first reported an
early look at Crossroads GPS’s tax return last Thursday. (ProPublica initially asked
for a copy of the group’s tax return on Thursday morning, but Jonathan Collegio, the group’s spokesman, said, “It’s not available
yet.” He also said it wasn’t available on Friday, the deadline for filing the
return. On Monday, Collegio said the return was
available for pickup.)

In a cover letter
accompanying the tax filing, Collegio positioned the
group as a balance to unions and other liberal groups. “Crossroads GPS serves
as a counterweight to well-funded labor unions and other far-left advocacy
groups that promote more government, more regulation and higher taxes,” Collegio wrote.

He also pointed out that the group didn’t just get big
contributions. It also had 1,254 small donors, who gave less than $5,000 each. (That
works out to $348,361, or .2 percent of Crossroads total
revenue.)   

On its tax return, Crossroads justified its social welfare
mission in part by saying it spent more than
$74 million on public communication and building “grassroots to influence
policymaking outcomes through grassroots mobilization and advocacy.” It also
said it spent more than $3.2 million on research and handed out more than $35 million
in grants, mainly to similarly aligned social welfare nonprofits active in
politics.

Of those grants, Crossroads gave $26.4 million to Americans for
Tax Reform, and $2.15 million to the Center for Individual
Freedom. It told the IRS that these grants were not supposed to be spent on elections.

In the group’s statement, Collegio
said the group had a ratio of 60.2 percent of social welfare spending to 38.8
percent of political spending in 2012. (It is not clear where the missing 1
percent went.)

Among the things Crossroads appears to have counted as part of
its spending on social welfare are tens of millions
on ads criticizing Obama
in swing states in 2012.

Most of those ads stopped short of telling people how to vote and
didn’t need to be reported to the FEC.

 The IRS says it considers
an ad to be political simply if it seems aimed at influencing an election, not
just because of when it runs. But so far, despite promises to crack down on
social welfare nonprofits engaged in too much political activity, the IRS has
taken a hands-off approach to the groups. Its most significant enforcement action so far has been to deny the recognition of one small Democratic
group and its affiliates in 2011.

In May, a scandal
erupted over the IRS targeting the applications of conservative Tea
Party groups for extra review, and since then, it’s not clear how — or if
— the agency is going to tackle the highly charged issue. The battle will
soon move to the courts. In August, Democracy 21, Public Citizen, the Campaign
Legal Center and Rep. Chris Van Hollen, a Maryland
Democrat, filed a federal lawsuit
aiming to force the IRS to block social welfare groups from engaging in overt
campaign spending.

There is another potential hurdle for Crossroads GPS. As of this
month, according to the IRS website, the agency hasn’t yet recognized the
tax-exempt status of Crossroads, which applied for recognition in September
2010. That’s a longer wait than faced by any of the major politically active
social welfare nonprofits applying since the Citizens United decision.