Journalism in the Public Interest

Read the Tax Returns From Karl Rove’s ‘Dark Money’ Group (Donors Still a Mystery)

The returns for nonprofit Crossroads GPS are the first glimpse of how much the group, which has spent millions on political ads, raised in 2010 and 2011.


A screenshot from an anti-Obama ad "paid for Crossroads Grassroots Policy Strategies." (Crossroads GPS)

One of the most talked-about "dark money" groups of the election released its tax returns yesterday, showing it raised almost $77 million from fewer than 100 donors over 19 months. Most of the money spent in its first year went directly to political ads or grants to other groups.

The returns are the first glimpse showing how much money has been raised by Crossroads GPS, launched by GOP strategist Karl Rove in mid-2010.

(Here are the full returns, for both 2010 and 2011. We've marked interesting bits. If you spot something we haven't, let us know.)

By choosing to include the number of donors and the amounts of some of its larger donations, including one of $10.1 million in the first year and another of $10.1 million in the last seven months of 2011, the group was somewhat more transparent than the IRS requires.

Still, Crossroads GPS, also known as Crossroads Grassroots Policy Strategies, retained plenty of mystery — namely, their donors' identities.

There are no donor names, no clues as to whether they are individuals, companies or trade groups, and no hint as to whether there are repeated donors from year to year.

Nonprofits like Crossroads GPS, classified by the IRS as "social welfare" organizations, are not required to disclose their donors, even if those organizations spend money on political ads. That is why they are sometimes referred to as "dark money" groups.

Yesterday, two campaign-finance watchdog groups again called for the IRS to investigate the tax status of Crossroads GPS. Critics have complained that the group and others like it use the IRS social-welfare status as a fig leaf to be able to hide the names of donors. The IRS says a social-welfare nonprofit, or 501(c)4, must have social welfare as a "primary purpose" but has never defined what that means. Most groups interpret this to mean social-welfare nonprofits can spend up to 49 percent of their money on politics.

Crossroads GPS spokesman Jonathan Collegio responded to critics by sending an email message with the subject line "Snarky comments" that pointed out that some of the group's critics are nonprofits that also don't disclose their donors. In another email, he compared what the group does to how environmental and labor groups have operated for decades.

Although similar nonprofits engaged in politics in past elections, their use exploded in 2010, particularly in tandem with super PACs, taking advantage of federal court rulings that paved the way for a new role for outside-spending groups in elections.

The IRS doesn't comment on individual groups but is expected to give more scrutiny to politicking social-welfare nonprofits this year, considering the major role the groups are expected to play in the election. Together with its affiliated super PAC, American Crossroads, Crossroads GPS hopes to raise $300 million, primarily to help defeat President Barack Obama and to elect Republicans to Congress.

Crossroads GPS reported 64 donors in its first year, between June 2010 and May 2011, including four who gave $10.1 million, $5 million, $4.5 million and $4 million. There were 32 donors in the last seven months of 2011, including two who gave $10 million and $4.3 million. It's unknown whether any of them were repeat donors.

Between June 2010 and May 2011, Crossroads GPS spent about $42.3 million, including about $15.9 million directly for political ads and another $15.9 million on grants to 12 like-minded nonprofits and trade groups.

The $15.9 million that Crossroads GPS gave in grants coincided with the midterm 2010 elections. The money included $500,000 to the American Action Network, the conservative nonprofit that once shared an office with Crossroads GPS and American Crossroads, and $4 million to Americans for Tax Reform, formed by anti-tax activist and GOP heavy hitter Grover Norquist.

Federal Election Commission records show that these groups, as well as five other grant recipients of Crossroads GPS, spent money on political ads, directly or indirectly, in the 2010 election cycle. The grant money that groups received from Crossroads was earmarked for non-political activities.

In its 2011 filing, which covers the last seven months of the year, Crossroads GPS reported spending almost $22.4 million, including $1.7 million on political ads, including this anti-Obama ad. It gave only one grant, of $50,000, to a charity called the Ethics and Public Policy Center. The organization describes itself as "D.C.'s premier institute dedicated to applying the Judeo-Christian moral tradition to critical issues of public policy."

Is this the only PAC group ? I thought I read where the Obama administration had the benefits of these fundraisers too, I would like to read about them as well. A follow up would be appreciated,

So What

The unions, left-wing special interests are knee-deep in big money to help keep Pres. Obama in office.  The rules are the rules made by a bipartisan Congress.  Lifeblood of any politician is money in this next election is all about money and who has the right to spend it.  Simply put do we accept an ever expanding federal government spending more money we do not have or can we get back to what made this country great individual entrepreneurialism.

I thought get a life.

The point of all this should be that spending all this money on buying politicians should not be permitted. Why not have some bi-partisan campaign finance reform and let that money go toward paying down the deficit instead of complaining about our debt.

Declare a no lobbying zone in DC and perhaps our elected officials will focus more on their work instead of all the add ons to every bill that are pay backs to their friends in the halls of congress and the White House.

Without lobbyists, instead of bills that are thousands of pages long, we could just reinstate prior bills that were simpler, worked for decades and only averaged 30 to 40 pages. That would make everyone’s job simpler and lower the cost of government.

Why isn’t anybody asking the deeper question of how the candidate with the most money wins?  People have opinions settled long in advance, as far as I can tell, and I can’t imagine a smarmy gravelly-voiced “candidate Smith doesn’t use a pooper-scooper when he walks his precious pup” commercial swinging the vote far enough to warrant this kind of spending.

Margret, I half-agree, but I don’t think you’re going far enough.  I say:
- Flood the House of Representatives, because one representative per million citizens is not representation.
- Wipe out Washington, DC, and make the representatives work apart from the herd where they have to look constituents in the eye every day.  And, if a lobbyist wants to visit every town and spend thousands of dollars to court votes across the country, at least it’ll boost local economies.
- Ban any bill that can’t fit on an index card (or fits by using language to be interpreted later) as unreadable, since lawmakers don’t read them.
- With the Internet, volunteers, and aired debates, run all campaigns on pocket change, and throw anybody caught cheating in jail to encourage self-policing.
- Kill the political parties, or at least eliminate them from special treatment in elections - in my area, third-party candidates can’t even file for candidacy until a couple of weeks before Election Day (and it’s against the law to campaign before you’re approved), and you can’t run at all without a party behind you.
- Hold an open review (a trial, basically) for elected officials at the end of each term, disqualifying or punishing any that broke the law, failed to do their jobs, or did lousy jobs while in office.

Some people might think that’s all extreme, but nothing except the review is onerous, and some cases (reducing the number of constituents) should ease others (eliminating campaign expenditures).

Of course, good luck getting that through Congress—five hundred people who are at the same time employees, employers, and union leaders, who also happen to create the rules they abide by.

This article is part of an ongoing investigation:
Buying Your Vote

Buying Your Vote: Dark Money and Big Data

ProPublica is following the money and exploring campaign issues you won't read about elsewhere.

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