Group Behind Election Ads Weighs In On Tax Deal

A new voice is weighing in on the congressional tax debate: Crossroads Grassroots Policy Strategies, an outside group that spent millions to create a Republican majority in the House.

Crossroads GPS says it's targeting nine House Democrats with radio ads in support of the compromise between the White House and Republican leaders. And the ads sound pretty much like the campaign attacks produced by the group two months ago.

"After two years of bailouts and wasteful spending, enough is enough. Call Congressman Connolly, tell him to stand up to Pelosi and demand a vote," says one ad — part of a $400,000 buy — that targets Democrat Gerry Connolly, who barely won re-election in his Northern Virginia district.

But Jonathan Collegio, spokesman for Crossroads GPS, says it isn't a political ad. "This is a legislative advocacy campaign aimed to educate concerned citizens about a crucial issue that Congress is facing."

Crossroads GPS is half of an organization run by prominent Republican operatives. The other, better-known half is called American Crossroads. Their leadership is the same.

Collegio says they always intended to have two components like this.

"There was always a desire to have both a purely political organization as well as an issues advocacy organization, like Crossroads GPS, that would focus on issues and the social welfare," he says.

Difference In Disclosure

Crossroads GPS is registered as a "social welfare organization" under Section 501(c)(4) of the tax code. American Crossroads is a 527 organization — an overtly political entity under Section 527.

And the difference is that 527 groups have to disclose their donors, while 501(c)(4) groups do not.

The political director for the Crossroads groups is consultant Carl Forti. At a conference on political money Monday, he explained how Crossroads GPS came about.

"You know, disclosure was very important to us, which is why the 527 was created. But some donors didn't want to be disclosed, and, therefore, the (c)(4) was created," he said.

So the 501(c)(4) was created for the benefit of donors? Not to talk about issues?

Forti elaborated: "Whether they would've given ultimately or not, I don't know," he said. "I know they were more comfortable giving to a (c)(4), and so we created one."

A First Step?

But tax law makes certain requirements of 501(c)(4) groups. They have to promote the social welfare. If they throw millions of dollars into attack ads, as Crossroads GPS did this year, they need to do something else — something big — that isn't about partisan politics.

These ads are the first step.

"They're setting themselves up to be even bigger players in 2012," says Rick Hasen, publisher of the Election Law Blog.

He says Crossroads GPS is pioneering new strategies as the campaign finance law is gradually being dismantled.

"Crossroads GPS (c)(4) is paving the way for other groups to engage in large-scale, election-related advertising that's not going to require the disclosure of any donors," Hasen says.

The goal is a big, secure channel for undisclosed money to flow into American politics. And it's a goal both sides are seeking.

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