by Kim Barker, ProPublica
One of the most talked-about “dark money” groups of the election released its tax returns yesterday, showing it raised almost $77 million from fewer than 100 donors over 19 months. Most of the money spent in its first year went directly to political ads or grants to other groups.
The returns are the first glimpse showing how much money has been raised by Crossroads GPS, launched by GOP strategist Karl Rove in mid-2010.
By choosing to include the number of donors and the amounts of some of its larger donations, including one of $10.1 million in the first year and another of $10.1 million in the last seven months of 2011, the group was somewhat more transparent than the IRS requires.
Still, Crossroads GPS, also known as Crossroads Grassroots Policy Strategies, retained plenty of mystery — namely, their donors’ identities.
There are no donor names, no clues as to whether they are individuals, companies or trade groups, and no hint as to whether there are repeated donors from year to year.
Nonprofits like Crossroads GPS, classified by the IRS as “social welfare” organizations, are not required to disclose their donors, even if those organizations spend money on political ads. That is why they are sometimes referred to as “dark money” groups.
Yesterday, two campaign-finance watchdog groups again called for the IRS to investigate the tax status of Crossroads GPS. Critics have complained that the group and others like it use the IRS social-welfare status as a fig leaf to be able to hide the names of donors. The IRS says a social-welfare nonprofit, or 501(c)4, must have social welfare as a “primary purpose” but has never defined what that means. Most groups interpret this to mean social-welfare nonprofits can spend up to 49 percent of their money on politics.
Crossroads GPS spokesman Jonathan Collegio responded to critics by sending an email message with the subject line “Snarky comments” that pointed out that some of the group’s critics are nonprofits that also don’t disclose their donors. In another email, he compared what the group does to how environmental and labor groups have operated for decades.
Although similar nonprofits engaged in politics in past elections, their use exploded in 2010, particularly in tandem with super PACs, taking advantage of federal court rulings that paved the way for a new role for outside-spending groups in elections.