Democracy 21 Statement on Rove-Backed Tax-Exempt “Social Welfare” Organization, Crossroads GPS, Which Reportedly Received a $10 Million Secret Contribution for Obama Attack Ads
Crossroads GPS, the brainchild of Republican operative Karl Rove, and a group that claims tax-exempt status as a section 501(c)(4) “social welfare” organization, reportedly received a secret contribution of $10 million dollars to spend on ads attacking President Obama.
According to an April 13 article in The Washington Post:
An anonymous donor has given $10 million to run ads attacking President Obama and his policies, escalating the money race that is defining the 2012 presidential campaign. And in the new, freewheeling environment of independent political giving, the identity of this donor, like many others, is likely to remain a permanent mystery.
The Post article also reported “another donor giving at least $10 million over the past two years” to Crossroads GPS, without the identity of that donor being disclosed.
This latest information is additional powerful evidence that the overriding purpose of Crossroads GPS is to elect and defeat candidates, not to serve as a 501(c)(4) “social welfare” organization.
It is this claimed status as a “social welfare” organization that Crossroads GPS is using to keep secret the donors who are financing tens of millions of dollars spent by the organization for campaign-related ads. Such campaign-related ads, however, do not qualify as “social welfare” activities under IRS standards, which make clear that ads do not have to contain express advocacy in order to be treated as campaign activities by the IRS.
Karl Rove is not known for his “social welfare” activities. He is well known, however, as a long-time political operative working to elect Republican candidates.
It appears clear that the overriding purpose of Crossroads GPS is to elect and defeat candidates, and that it is masquerading as a “social welfare” organization in order to keep secret the donors funding its campaign expenditures.
This is an “emperor has no clothes on” moment.
It is the responsibility of the IRS to tell Crossroads GPS that it “has no clothes on,” and that it does not qualify as a tax-exempt 501(c)(4) “social welfare” organization.
The IRS has failed, however, to carry out its enforcement responsibilities, and as a result the agency is allowing Crossroads GPS to hide the donors financing tens of millions of dollars being spent by Crossroads GPS to influence federal elections.
It is essential that the IRS act to stop the farce that Crossroads GPS is a “social welfare” organization.
Karl Rove and Crossroads GPS are thumbing their nose at the American people. They are injecting secret, multi-million dollar contributions into federal elections in the face of the basic right of citizens to know who is financing campaign expenditures to influence their votes.
This cannot be allowed to continue.
Democracy 21, joined by the Campaign Legal Center, has repeatedly called on the Internal Revenue Service to investigate and take appropriate action against Crossroads GPS.
In letters that our organizations sent to the IRS on October 5, 2010, September 28, 2011, December 14, 2011 and March 9, 2012, we have called for such an investigation and submitted compelling evidence that Crossroads GPS does not qualify for tax-exempt status as a 501(c)(4) “social welfare” organization under the tax laws and the court interpretations of those laws.
Our organizations also have asked the IRS for investigations and appropriate enforcement actions against other organizations that we believe are not entitled to tax-exempt status as 501(c)(4) “social welfare” organizations.
These groups include the pro-Obama organization, Priorities USA, as well as American Action Network, a group founded by former U.S. Senator Norm Coleman, and Americans Elect, a group that has gained ballot access as a political party in numerous states to run a candidate for president but that is claiming to be a “social welfare” organization.
The IRS must act to protect the integrity of the tax laws and the basic right of citizens to know the identity of donors funding campaign-related expenditures.
