Michael Isikoff of NBC News reports that undisclosed donors to American Crossroads GPS, a 501(c)(4) “social welfare” organization founded by Karl Rove and former Republican National Committee chair Ed Gillespie, came from a small group of private equity and hedge fund managers:

A substantial portion of Crossroads GPS’ money came from a small circle of extremely wealthy Wall Street hedge fund and private equity moguls, according to GOP fundraising sources who spoke with NBC News on condition of anonymity. These donors have been bitterly opposed to a proposal by congressional Democrats — and endorsed by the Obama administration — to increase the tax rates on compensation that hedge funds pay their partners, the sources said.

Crossroads GPS spent almost $17 million supporting Republican candidates or opposing Democratic candidates for office. Of the eighteen candidates it spent money for or against, in fourteen cases those candidates won or were defeated with the help of GPS money, four won or lost despite GPS spending on their opponents and two races are still yet to be determined. Crossroads GPS, in a memo released to the press, suggested that much less than half of its funds were devoted to electioneering, meaning that much more than $17 million has or will be devoted to its “social welfare purpose,” a “sustained advocacy effort.”

Hedge fund managers pay a 15 percent income tax, as opposed to as much as a 35 percent income tax paid by some Americans, since their income — investment performance — is taxed as capital gains. A hedge fund manager typically charges a two percent management fee and twenty percent of profit gains. The House has passed a bill closing this loophole but it so far has failed in the Senate. (Not only Republicans oppose this tax; New York Sen. Chuck Schumer has opposed it, too, as his state has many hedge funds.)

(Photo: Flickr Creative Commons/David Paul Ohmer)