ProPublica has investigated Karl Rove’s Crossroads GPS organisation, finding that the group told the IRS it wasn’t planning to try to influence elections.The group spent at least $70 million on the 2012 election.
Crossroads Grassroots Policy Strategies filed for tax-exempt status in 2010, enabling it to obscure the identities of its wealthy donors.
In order to achieve the status of a social welfare nonprofit, the group said that any money it spent on elections would be limited and would not constitute the primary purpose.
The reality is that Crossroads GPS spent a fortune on campaigns in 2012.
Crossroads GPS spent $70 million on ads and phone calls urging voters to support Republican candidates.
GPS is affiliated with American Crossroads, a Super PAC that spent $105 million on the 2012 election.
The main issue with Crossroads GPS is that there is a substantial difference between what they did and what they told the IRS they were planning to do in order to acquire tax-exempt status.
Here is the breakdown of what Rove’s group told the IRS in order to gain tax exempt status:
- 20 per cent spent on researchOn how demographic groups respond to current policy issues What priorities and concerns they have Policy research on issues
- On how demographic groups respond to current policy issues
- What priorities and concerns they have
- Policy research on issues
- 50 per cent spent on public educationIssues include national debt, government spending, health care, immigration, energy and pension reform Methods include paid advertising, statements in news articles, and online policy information
- Issues include national debt, government spending, health care, immigration, energy and pension reform
- Methods include paid advertising, statements in news articles, and online policy information
- 30 per cent spent on influencing legislationBuilds grassroots efforts to influence policy making Encourages citizens to engage in grassroots advocacy Does this through paid advertising, mailings, emails, web based tools
- Builds grassroots efforts to influence policy making
- Encourages citizens to engage in grassroots advocacy
- Does this through paid advertising, mailings, emails, web based tools
Crossroads GPS indicated it would spent 20 per cent on research. Of the $64.7 million spent between June 2010 and December 2011, ProPublica reports that the organisation spent only $1.4 million on “research,” or 2 per cent.
Most of the electoral spending would be accounted for under the 50 per cent for public education. If it turns out that they reported that inaccurately — that influencing elections was more than just a partial focus — that has severe implications for Crossroads.
The IRS will next look at reports from Crossroads in November 2013. If, after looking at the financial reports from the 2012 election, the IRS decides Crossroads GPS acted inappropriately, it’s very possible they will strip the tax-exempt status.
Were they to strip the status, Crossroads would have to pay taxes on the millions they’ve spent. But even more importantly, they would have to release donor information, a huge win for transparency advocates.
Business Insider Emails & Alerts
Site highlights each day to your inbox.