Posts Tagged ‘American Crossroads GPS’

Reports: Interest groups playing expanded role in 2012 elections

Posted on: February 3rd, 2012 by The American Independent No Comments

Broadcast media still dominates the world of political campaign ads, which are financed more than ever by interest groups that will play an increasing role in the 2012 presidential election, according to media reports issued this week. (more…)

American Crossroads president says it operates like a hedge fund

Posted on: January 4th, 2011 by Luke Johnson 1 Comment

The Los Angeles Times explores the prospects for campaign finance reform after Sen. Russ Feingold (D-Wisc.) lost his re-election in November and now that more Republicans are in Congress. (At Monday’s Republican National Committee chair debate, when asked what the biggest mistakes of Republicans over the past ten years were, former Bush administration official Maria Cino said the McCain-Feingold Act, to huge applause.)

Steven Law, president of American Crossroads, is quoted by the LA Times as saying:

“We operate like a hedge fund,” said Steven Law, a former aide to Senate Minority Leader Mitch McConnell (R-Ky.) and president of American Crossroads, a nonprofit group that funds political ads. “We look for opportunities where we can invest and make a difference.”

Ironically, a November NBC News report suggested that donors to American Crossroads Grassroots Policy Strategies, a 501(c)(4) “social welfare” group that does not disclose its donors under tax law, were 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 was very successful this past election cycle, winning in 15 of the 20 races it made independent expenditures in.

Crossroads GPS donors revealed, sort of

Posted on: November 4th, 2010 by Luke Johnson No Comments

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)

DNC Chair to American Crossroads: Release your donors

Posted on: October 8th, 2010 by Luke Johnson 1 Comment

The groups formed by Bush White House Senior Advisor Karl Rove and former Republican National Commitee Chair Ed Gillespie — American Crossroads and its 501(c)(4) spinoff, American Crossroads GPS — have begun to draw the attention of President Obama, who called outside groups “a threat to our democracy” on Thursday.

Now, Democratic National Committee Chair Tim Kaine issued a statement asking the GPS group to reveal its donors (American Crossroads is a 527 group and therefore discloses its donors) while a top GOP lawyer representing GPS sent out a six-page letter to the media alleging a “coordinated effort to chill the First Amendment rights of center-right independent organizations like Crossroads GPS.”

Of course, the groups have helped erase the DNC’s advantage in fundraising, as American Crossroads and American Crossroads GPS have spent almost $18 million in the midterms thus far. Kaine wrote in a press release daring Rove to release his donors if the claim that he has no involvement in the group is true:

“The President raised a serious issue with the American people about the corrupting influence of corporate and foreign money in American elections through groups like the Chamber of Commerce and Karl Rove’s Crossroads GPS which don’t have to disclose their donors.

“Despite multiple confirmed accounts of American Crossroads and Crossroads GPS being conceived in his own home, promoting the group extensively in the media, and raising funds for it, Karl Rove claims that he is not helping to fund these groups.  Despite this undeniable evidence of Mr. Rove’s extensive participation in the founding, financing and execution of American Crossroads and Crossroads GPS, Mr. Rove has gone further and accused the President of being misleading.

“These are serious accusations – accusations that we would think Mr. Rove would be willing to back up with incontrovertible evidence.

“So, our message to Mr. Rove is – Prove it.  Disclose immediately a complete list of donors to American Crossroads and Crossroads GPS, and the amount and date of their donations, for public scrutiny.  If Mr. Rove has nothing to hide this shouldn’t be a problem.”

Tom Josefiak, former chief counsel of the RNC and chief counsel to Bush-Cheney ’04, represents American Crossroads GPS. Josefiak sent out a six-page letter to the media insisting they have done nothing improper. The letter is tendentious — it uses “Democrat” as an adjective, calling conservative anti-campaign finance regulation group the Center for Competitive Politics, “a highly respected campaign finance policy organization.”

But the letter argues that the “primary purpose” of GPS — which cannot be electoral politics in accordance with tax law — cannot be measured until the end of the year. Crossroads GPS — as it is a 501(c)(4) group with undisclosed donors as opposed to a 527 group — will not be required to report anything to the IRS until as late as November 2011.

Count on the issue of secret donors not being resolved before the election.

**Full Disclosure: The American Independent and other news organizations, including the Huffington Post, Los Angeles Times and Politico, have run corrections that Rove “runs” the group.

(Photo: Flickr CC/Obama-Biden Transition Project)

Potential for IRS investigation into ‘Social Welfare’ groups makes donors nervous

Posted on: October 6th, 2010 by Patrick Brendel No Comments

Yesterday, when the Campaign Legal Center filed a complaint with the IRS against the 501(c)(4) group Crossroads GPS, alleging that it was abusing its tax-exempt status because its “primary purpose” was election related, GPS spokesman Jonathan Collegio dismissed the complaint as politically motivated:

“This is a baseless complaint, filed by a partisan group that fundraises off of the baseless complaints they file,” Collegio said. “Crossroads GPS carefully and cautiously follows all laws governing 501(c)(4) organizations. Meanwhile, liberal groups spent more than $400 million in undisclosed campaign money in 2008 alone, with nary a peep of protest from liberal lobbyist Fred Wertheimer.”

Today, Mike Allen reports that some potential corporate donors aren’t as sanguine about the potential investigation:

One of the city’s best connected Republicans e-mailed us: “We are telling all of our clients, do not give a cent unless you accept the possibility that one day your contribution will be well be public. … i do not think you will see many blue chip companies, this is more for the wealthy.”

Because donations are not disclosed, the question of how much corporations are donating to groups like Crossroads GPS remains a guessing game. Indeed, one of the biggest draws of 501(c)s is the anonymity they can grant donors, which implies that corporations, especially those with a large direct consumer base, would choose them as their preferred outlet of giving. That a potential IRS investigation would have a chilling effect on such donations seems unlikely — lots of requests are filed with the IRS that simply go unanswered and uninvestigated — but certainly possible.

For what it’s worth, Collegio also emailed Allen with the subject line, “interestingly,” to say that “Despite the left’s coordinated … attacks, we received more new ‘likes’ on facebook today than on any day in our history.”

(Photo: FreeFoto.com/Ian Britton)

Crossroads, Crossroads GPS release new ads in Florida, Colorado

Posted on: October 5th, 2010 by Luke Johnson No Comments

Two groups conceived by former Bush White House Senior Advisor Karl Rove and former RNC chairman Ed Gillespie have new independent expenditure ads opposing Sen. Michael Bennet (D-Colo.) and supporting Florida candidate for U.S. Senate Marco Rubio (R). The ads appear the same day as campaign finance watchdog organizations wrote a letter to the IRS asking them to investigate the 501(c)(4) tax status of one of those groups, American Crossroads Grassroots Policy Strategies (GPS). (more…)

DC: American Crossroads backed almost entirely by billionaires

Posted on: September 28th, 2010 by Paul No Comments

The latest FEC filings from American Crossroads continue to tell a similar story: the nonprofit political spending group is funded almost entirely by billionaires. Salon did the math yesterday and calculated that in August the group took in approximately $2.6 million in total, and that a full $2.4 million — or 91 percent — came from just three billionaire beneficiaries:

We’ve previously reported that the group is getting a staggering amount of support from billionaires, several of whom made their fortune in the energy industry and live in Texas. Last month Trevor Rees-Jones, president of Dallas-based Chief Oil and Gas, contributed another $1 million to American Crossroads, on top of the $1 million he gave earlier this year. Fellow billionaire Robert Rowling, CEO of the company TRT Holdings, also gave Crossroads his second $1 million donation in August.

The only new name on the list is American Financial Group, a Cincinnati-based firm owned by nonagenerian Carl Linder. Forbes put Linder’s net worth at $1.7 billion this year, a fortune built up through the growth of United Dairy Farmers. He previously owned Chiquita and currently owns a stake in the Cincinnati Reds. American Financial Group gave American Crossroads $400,000 last month.

Another new billionaire to add to the list of Crossroads backers is Jerry Perenchio of Bel Air. He is worth $2.1 billion, the bulk of which was made off the sale of Spanish language TV station Univision, according to Forbes. He is a major Republican donor who was co-chair of John McCain’s national finance committee. Perenchio gave American Crossroads $1 million in July.

Of course, the groups’s sister organization, a 501(c)4 called American Crossroads GPS, has quite possibly been raising even more. Because the group is only required to file with the IRS, however, we may never know the sources of its funding.

(Photo: Flickr Creative Commons/zzzack)