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).
The other, American Crossroads, discloses its donors, while American Crossroads GPS does not pursuant to tax law. The donors to American Crossroads have been billionaires, oil and gas executives, insurance and financial companies.
Since 501 (c)(4) organizations cannot primarily devote themselves to electoral politics, Ben Smith at Politico wrote that it meant, in effect, that Crossroads GPS donors were willing to pay twice as much for secrecy. (In other words, out of every dollar, Crossroads GPS could not spend more than 50 cents on campaigning for or against candidates.)
A Crossroads GPS concept paper (PDF) obtained by Politico listed GPS fundraising goals: $18 million on “issue advocacy,” $15 million on “targeted grassroots advocacy,” $3 million on “issue research,” $2 million on polling and $5 million on list “acquisition and enhancement.”
Despite the tax law limit, two campaign finance organizations wrote a letter to the IRS Tuesday requesting an investigation as to whether the “primary purpose” of Crossroads GPS was indeed election-related. The complaint alleges GPS was “organized to participate and intervene in the 2010 congressional races while providing donors to the organization with a safe haven for hiding their role in funding expenditures to influence the 2010 congressional races.”
The Sunlight Foundation’s most recent data shows the groups have combined to spend over $9 million on electioneering communications for various U.S. Senate races around the country. The groups announced a $4.2 million ad buy Tuesday, which includes the ads in the Florida and Colorado U.S. Senate races.
The $770,000 Colorado ad buy hits Sen. Bennet over a pension bond deal that he did as Denver Public Schools superintendent with JP Morgan Chase that had an exploding interest rate like an adjustable-rate mortgage. The story, reported by Gretchen Morgenson of the New York Times, broke the Friday before Bennet’s primary win against Andrew Romanoff. American Crossroads, a 527 group, is running the ad, and has spent $1,793,207 against Bennet.
A 501 (c)(4) group, American Crossroads GPS, has spent $213,477 against Bennet. The Colorado Senate race has the most independent expenditures — that is, not coordinated with a campaign — of any race this cycle.