As Conservative Groups Release New Campaign Ads, Watchdog Groups Ask IRS to Investigate

Two groups conceived by Karl Rove and former RNC chairman Ed Gillespie have new independent expenditure ads today in two U.S. Senate races, opposing Sen. Michael Bennet (D-Colo.) and supporting Florida candidate Marco Rubio (R). The ads appear as campaign finance watchdog organizations wrote a letter to the IRS today asking it 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 included billionaires, oil and gas executives, and insurance and financial company employees.

501(c)(4) organizations cannot primarily devote themselves to electoral politics, so Crossroads GPS could not spend more than half of its money campaigning for or against candidates. As a result, Crossroads GPS donors were effectively willing to pay twice as much for secrecy, writes Ben Smith at Politico.

A Crossroads GPS concept paper (PDF) obtained by Politico lists 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 show 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 Bennet over a pension bond deal that he completed as Denver Public Schools superintendent with JP Morgan Chase that had an exploding interest rate. American Crossroads, a 527 group, is running the ad, and has spent $1,793,207 against Bennet.

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.

The $350,000 Florida ad buy treads familiar ground — Republican Marco Rubio opposed the stimulus while independent candidate Charlie Crist supported it; Rubio opposes the health-care reform law while Crist changed his positions; and Rubio opposes cap-and-trade legislation while Crist supports targets for greenhouse gas reductions. The ad is an expenditure of American Crossroads GPS, which previously had not made any expenditures in Florida; however, American Crossroads spent $246,676 on direct mail and postage in support of Rubio last week.

Luke Johnson reports on national politics for The American Independent.