FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 12 February 2016

IRS Grants Nonprofit Status To Dark Money Group Founded By Karl Rove

Special Report from ProPublica

-- this post authored by Robert Faturechi and Derek Willis

Crossroads GPS gets declared a nonprofit five years after applying, meaning that its donor list can remain private.

Karl Rove, founder of Crossroads GPS. (Spencer Platt/Getty)

Donors to the nonprofit group Crossroads GPS, founded by Republican strategist Karl Rove, no longer have to worry about their identities being disclosed. After a five-year wait, the IRS has approved the organization's application for tax-exempt status.

Crossroads had been the most active of the nonprofits that are funneling cash into politics - often called dark money because the original source of the funds may be kept secret if the organizations have social welfare as their primary purpose. During the 2012 cycle, Crossroads reported spending almost twice as much on political ads as the next most-active nonprofit, Americans for Prosperity, which is backed by conservative billionaire brothers Charles and David Koch.

So far, during the 2016 cycle, the Rove group seems to be dormant. It has not filed any reports with the Federal Election Commission since January 2015, and has not reported any TV ad spending with the Federal Communications Commission. During the 2012 campaign, the group didn't start spending on TV ads until July, after Mitt Romney had locked up the GOP nomination.

The IRS decision on Crossroads came in November but was first reported today by the Center for Responsive Politics. Unless new facts arise or circumstances change, past, present and future donors to the Rove group can now feel assured that they will remain anonymous. That gives Crossroads a leg up over other dark money groups that lack IRS approval and could be vulnerable to having that status challenged by the federal government at any time.

Crossroads GPS, also known as Crossroads Grassroots Policy Strategies, was created after the Supreme Court's 2010 Citizens United ruling helped pave the way for unlimited corporate and union spending on elections, super PACs and hundreds of millions of dollars in anonymous money.

As ProPublica previously reported, in the group's 2010 application for nonprofit status, it told the IRS that while it planned to spend money on elections, "any such activity will be limited in amount, and will not constitute the organization's primary purpose." A copy of the Crossroads application was sent from the IRS to ProPublica in late 2012, although under the agency's rules it isn't permitted to release applications from groups that haven't yet earned tax-exempt status.

Critics had argued that Crossroads was spending so much on politics it should be treated instead like a political committee that's required to disclose its donors. In 2013, the IRS became engulfed in a scandal over allegations that it gave more scrutiny to nonprofit applications from conservative groups. One top IRS official, Lois Lerner, was accused of singling out Crossroads and pushing for its application to be denied.

Marcus Owens, the former director of the IRS's Exempt Organizations Division, said that based on what has surfaced about Crossroads' political activity in support of a single political party, he was surprised the group was granted a status reserved for organizations supporting the general public good.

He said:

"Operating for the benefit of one particular candidate or party, it's hard to say that's not private benefit."

Owens said he could envision corporations now being allowed to outsource various business functions to tax-exempt nonprofits.Owens asked:

"Undertaking the marketing of General Motors, for example. Why not? If it's OK to market the principles of a particular party or candidate, why leave it at that?"

Republicans aren't the only ones benefitting from nonprofits that are allowed to keep their donors anonymous. During the 2014 cycle, non-disclosing groups with a conservative viewpoint spent almost $125 million, and those with a liberal viewpoint spent almost $35 million, according to the Center for Responsive Politics. The biggest liberal spender was union-backed Patriot Majority USA.

In a statement, the president of Crossroads GPS, Steven Law, said that the organization takes compliance seriously, so it was not surprised by the IRS approval.

Law said:

"What we were surprised by was how long it took and how people outside the IRS improperly tried to influence and politicize the process, not just against us but against many other law-abiding advocacy groups."

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
A Short Note on a Connection Between Marginalist Economics and Folk Medicine
Run A High Pressure Economy? Janet Yellen Does Not Understand the Problem
News Blog
Rail Week Ending 22 October 2016 Better Than The Previous Week
What Happens After The Islamic State Loses Mosul
Infographic Of The Day: The History Of Women's Ice Hockey In Canada
Early Headlines: Asia Stocks Mixed, Huge Antarctic Marine Park, Can Trump Get To 270?, US Workers Gaining, UK Inflation, France GDP, India Savings Lag And More
Why Amazon Gives So Many Perks To Prime Members
Where Workplace Trust Is Strongest
How A Lack Of Sleep Affects Your Brain - And Personality
How Accurate Are Final US Election Polls
What We Read Today 27 October 2016
A Pony And His Beloved Teddy Bear Reunite After Being Apart For 3 Years
October 2016 Kansas City Fed Manufacturing Remains In Expansion
September 2016 Median Household Income Not Statistically Different Than The Previous Month
September 2016 Pending Home Sales Index Improves
Investing Blog
Technical Thoughts: Looking For The Rebounds
Gold That Pays Dividends
Opinion Blog
Global Debt Investors: The Silence Of The Lambs
A Hard Brexit And Reduced Migration Won't Benefit UK Workers
Precious Metals Blog
Inflation Surging As Platinum Signals Stock Market Decline
Live Markets
27Oct2016 Market Close: Wall Street Closes Fractionally Lower, Interest-Rate Stocks Outweighed Gains In Healthcare, Market Indicators Bearish
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved