Debate Endures Over Tax Exempt Status Of Crossroads GPS

Crossroads GPS, the social welfare organization guided by conservative strategist Karl Rove, is practically invisible so far in the midterm political battles.

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Tomorrow marks a year since the IRS admitted it have given excessive scrutiny to Tea Party and right-leaning patriot groups that wanted tax exempt status. Since then, the tax agency has been battered by firings, resignations, lawsuits and investigations. It's also been a tough year for the biggest group known to have been under that scrutiny by the IRS, the social welfare organization Crossroads GPS. NPR's Peter Overby reports.

PETER OVERBY, BYLINE: Crossroads GPS is known as a creation of Republican strategist Karl Rove. He co-founded it in 2010 and remains a key advisor and fundraiser. So far, in the mid-term elections, Crossroads GPS has done just one TV ad aimed at Democratic Senator Jeanne Shaheen in New Hampshire.


UNIDENTIFIED WOMAN: Five facts about Obamacare. Senator Jeanne Shaheen cast the deciding vote for Obamacare. Then over 20,000 granite staters...

OVERBY: At this point in 2012, Crossroads had aired ads nearly 17,000 times. This year's anti-Shaheen ad, just 416 times.

ERIKA FRANKLIN FOWLER: I think it is unusual, especially given how active they were in 2012.

OVERBY: That's Erika Franklin Fowler. She's a director of the Wesleyan Media Project, a three-college consortium that tracks political advertising on TV. According to Crossroad's own records, its 2012 spending to date on congressional races was $1.8 million. This cycle it spent just $700,000 for New Hampshire. Again, Erika Franklin Fowler.

FOWLER: What exactly explains that decrease is a speculation game.

OVERBY: Crossroads GPS spokesman Paul Lindsay issued a statement that its fundraising base is, quote, steady and enthusiastic and that spending will ramp up in the coming months. But as a social welfare group, Crossroads GPS doesn't have to disclose its donors. And without disclosure, there's no way of knowing how steady and enthusiastic those donors are, given Crossroad's poor won/lost record in 2012 and the unwanted attention generated by the IRS controversy.

Crossroads GPS applied for tax exempt status back in 2010. NPR calculates that it spent $165 million on ads in the 2012 elections. Early in 2013, Lois Lerner, then the head of the IRS exempt organization's division, wrote that the agency was, quote, working on a denial of the tax exempt application. Now that application is still pending, Lerner is out of a job, and this week the House cited her for contempt of Congress because she refused to testify.

One result - the House investigations pulled the spotlight away from the Tea Party groups and onto Crossroads GPS. Here's oversight committee chair Darrell Issa at a committee meeting last month.

REPRESENTATIVE DARRELL ISSA: And Ms. Lerner's emails included the kind of communications where she helped target Crossroads GPS and others.

OVERBY: And Karl Rove on Fox News.

KARL ROVE: She lead an effort to deny a 501(c)4 tax exempt status to Crossroads GPS, subverting the IRS's own standards and procedures in order to harass a conservative group.

OVERBY: The battle even extends to the Federal Election Commission. FEC lawyers began asking in 2010 if Crossroads GPS was really a political committee. If so, it would have to disclose its donor lists and spending to the FEC. Eventually the lawyers decided, yes, it was a political committee, but then the FEC commissioners deadlocked on the question and the argument burst into the open.

Democratic commissioner Ann Ravel wrote that Republican commissioners had disregarded the facts and the law. At their next commission meeting, Republican Caroline Hunter struck back.

CAROLINE HUNTER, FEDERAL ELECTION COMMITTEE: You're happy if someone's enforcing the law as the way you read it, not as the way it's on the books.

OVERBY: Now the liberal watchdog group Public Citizen is suing the FEC to reopen that case. Two other watchdogs, Democracy 21 and the Campaign Legal Center, are urging the IRS to go ahead and deny Crossroads' application. So 2014 might be another year when Crossroads GPS gets in the headlines for more than its attack ads. Peter Overby, NPR News, Washington.

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