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Defying the Odds

Defying the Odds
New book about the 2016 election.

Thursday, April 19, 2012

Crossroads GPS: Whence the Money Came, Where It Went

Danny Yadron writes at The Wall Street Journal:
Crossroads GPS, the well-connected conservative advocacy group, raised $76.8 million from fewer than 100 donations in its first 19 months in operation, according to tax forms the group released Tuesday.
It’s the first time the nonprofit, co-founded by Republican operative Karl Rove, has released such data. The documents showed that Crossroads received two dozen donations for $1 million or more, as well as two for $10 million apiece between June 2010, when the group was founded, and the close of 2011.
Open Secrets reports that Crossroads GPS spent about $16 million on express advocacy in 2010, along  with another million on electioneering communications.
The sum of those two figures may not be all that Crossroads spent on politics in the 2010 cycle, though, since some spending -- depending on when and where it occurred, and in what form -- wouldn't necessarily be reported to the FEC or the IRS.
And, being careful to keep its spending on politics below 50 percent of its overall spending, Crossroads GPS gave grants to a dozen other 501(c)(4) organizations, including such groups as National Right to Life Association, American Action Network and Americans for Tax Reform. For each one, Crossroads listed "social welfare" as the purpose of the grant.
Five of the grantees spent more than $1 million on political ads in 2010. Americans for Tax Reform, for instance, received $4 million from Crossroads GPS, and spent $4.1 million on ads promoting or attacking candidates that year. The Center for Individual Freedom, a group that originally had ties to the tobacco lobby, got a $2.75 million gift from Crossroads, and spent $2.5 million on electioneering communications that benefited Republicans.

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Crossroads is careful to say in its IRS Form 990 that the grants couldn't be used for the kind of advertising that expressly promotes the election or defeat of a candidate.
"Grants are accompanied by a letter of transmittal stating that the funds are to be used only for exempt purposes, and not for political expenditures, consistent with the organization's tax-exempt mission."
But money is fungible, and walling off a Crossroads grant for some specific purpose frees up other funds that can be used for other purposes, such as political ads.
Kenneth Vogel wrtites at Politico:
Crossroads’s role as a funder of the right was intended to mimic — and help offset — the millions of dollars that labor unions for years have directed to an array of liberal groups that help Democrats, including environmentalist and gay-rights outfits and, more recently, Democratic super PACs.
“The unions have spent literally hundreds of millions of dollars in this way,” asserted Crossroads spokesman Jonathan Collegio. Crossroads is merely taking “a page out of the unions’ playbook by supporting philosophically aligned groups that share many of the same policy goals and have complementary assets,” he told POLITICO, adding that the “cross-fertilization of like-minded groups is critical to building an infrastructure for long-term policy change.”
The extent of Crossroads’s money role was revealed Tuesday when Crossroads Grassroots Policy Strategies – the shadowy nonprofit sister of the better known American Crossroads super PAC — released its tax filings for 2010 and 2011.
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Some of the groups that received GPS funding directly participate in the so-called Weaver Terrace Group strategy sessions held regularly in Crossroads’s downtown Washington offices, where groups coordinate advertising strategy for different races across the country.
American Action Network, which accepted $500,000 from GPS in 2010, is a core member. Other attendees include NFIB; Americans for Tax Reform, which accepted $4 million from GPS; the 60 Plus Association, which accepted $50,000 from GPS; as well as the Republican Jewish Coalition. That group shares a pair of board members with American Action Network — former Minnesota Sen. Norm Coleman and veteran fundraiser Fred Malek — and in 2010, it donated $4 million each to Crossroads GPS and American Action Network, according to its tax filings.