Pro-GOP group Crossroads GPS to IRS: ‘Limited’ money would go to political activity

Brendan James

Voters in presidential swing states couldn't miss the TV ads run by Crossroads GPS, a nonprofit linked to Republican strategist Karl Rove. Many of the ads were aimed at unseating President Barack Obama, with some telling voters "Obama donors and insiders line up for handouts" and others urging them to "take away Obama's blank check."

But according to a copy of the group's 2010 IRS application obtained by ProPublica, the outfit was supposed to be dedicated chiefly to social welfare and research. Its form stated that "[political activity] will be limited in amount, and will not constitute the organization's primary purpose."

Groups organized under the so-called 501(c)(4) provision of the federal tax code are allowed to shield the identity of their donors and potentially earn tax-exempt status. Several watchdog groups and officials, including Illinois Democratic Sen. Dick Durbin, have called for an investigation into Crossroads GPS' finances.

In June the Obama re-election campaign asked the Federal Election Commission to force Crossroads GPS to register as a political action committee and disclose its donors because of the extent of its political activity. The FEC has not ruled on the request.

The IRS is still reviewing the application and has not yet granted Crossroads GPS tax-exempt status. But the application—partly redacted—has renewed questions about whether Rove's outfit remained true to its declared purpose.

FEC reports show Rove's group spent $70 million on phone calls and ads supporting Republicans. About $50 million more was spent outside the FEC's reporting window targeting Obama, ProPublica said. The goup's sister political committee, American Crossroads, spent $105 million on ads.

ProPublica says it obtained the document from a public-records request to the IRS.

The fate of Crossroads GPS is only one piece of a larger debate over whether the Supreme Court's controversial 2010 Citizens United decision easing restrictions on political spending has allowed regulatory loopholes between the IRS and the FEC to be exploited.