Watchdog: Karl Rove and Crossroads GPS Broke Election Law

By Josh Israel, ThinkProgress

17 November 12

he non-partisan Citizens for Responsibility and Ethics in Washington (CREW) filed complaints Thursday with both the Federal Election Commission (FEC) and the Federal Bureau of Investigation (FBI) alleging that Karl Rove and his secretive Crossroads GPS violated election law and may have engaged in a criminal conspiracy to do so.

Under campaign finance law and FEC regulations, 501(c)(4) groups, like Crossroads GPS, can raise unlimited funds from wealthy individuals and corporations without having to disclose their donors. The only time donors to these secretive groups must be disclosed is when donors give more than $200 explicitly "for the purpose of furthering an independent expenditure."

According to CREW, Rove expressly asked for and received millions of dollars in contributions specifically to fund an independent expenditure effort in support of unsuccessful Republican Ohio Senate nominee Josh Mandel:

Federal law requires any outside group that makes an independent expenditure to disclose the donors who contributed to pay for such ads. Groups like Crossroads GPS normally evade this law by claiming none of their contributions were earmarked for a specific purpose. At an August 2012 fundraiser, however, Rove said an anonymous donor gave Crossroads GPS $3 million specifically for the Ohio Senate race, and told Rove it was a "matching challenge" dependent on the group raising another $3 million for the race. Crossroads GPS ended up spending $6.36 million on independent expenditures in the Ohio race, but did not disclose any donors in nine reports the group filed with the FEC.

CREW also notes that, in a 2011 letter to the FEC, Crossroads GPS said that it "understands the applicable reporting regulations" and that, should it receive "any contributions that are required to be reported," it would do so as required. Given this, CREW argues, the violations "were deliberate" and "are subject to criminal as well as civil penalties."

The Rove comment in question was reported in Bloomberg Businessweek in September. That article quoted Rove as saying a donor told him "I'll give ya' $3 million, matching challenge," and that "Bob Castellini, owner of the Cincinnati Reds, is helping raise the other $3 million for that one." Crossroads GPS would end up spending just over $6 million on the Ohio Senate race.

Tara Malloy, senior counsel at the Campaign Legal Center, told ThinkProgress that if the allegations are true, it "seems reasonable to assume the main contributor gave for the purpose of furthering that expenditure or at least that these allegations warrant an FEC investigation." But, she notes, the three Republican appointees on the deadlocked six-member Federal Election Commission often block enforcement efforts of this type and have previously noted a difference between contributions furthering independent expenditures in general — and contributions specifically furthering a particular independent expenditure. Even if Rove raised the money to fund independent expenditures in the Ohio Senate race, that interpretation of the rule would require proof that he discussed with them the exact ads before the donation.

Still, she observed, "The allegations are troubling… One would hope the FEC might investigate this matter."

Crossroads GPS may also be in hot water for its apparent failure to register as a charity in Virginia, as required by law.