Rove-Associated Groups Vow $120 Million In Attack Ads, Say More Is Needed

Original Link: http://www.huffingtonpost.com/2011/06/24/rove-associated-groups-120-million-attack-ads_n_883898.html

By Dan Froomkin, Paul Blumenthal

The leaders of two behemoth Karl Rove-associated unlimited donation campaign fundraising groups on Friday promised to spend $120 million against Democrats in the 2012 election cycle, much of it in the form of attack ads.

At the same time, the leaders of American Crossroads and Crossroads Grassroots Political Strategies (GPS) tried to cast themselves as underdogs to a Democratic apparatus they predicted will spend $2 billion between now and November 2012. They spoke at a breakfast briefing with reporters organized by the Christian Science Monitor.

"We're going to have $2 billion spent in the suspension of reality," said American Crossroads chairman Mike Duncan.

But lest there be any doubt, Duncan's solution was not for Democrats to spend less, it was for Republicans to spend more.

"There's not too much money in politics," he declared. "I firmly believe that there is a role for various organizations."

Indeed, Duncan railed against one of the few campaign finance restrictions left in the wake of a series of sweeping Supreme Court decisions. The former Republican National Committee chairman said that limiting how much individuals or corporations can contribute directly to political parties constitute "restrictions on free speech."

"I'm a free speech guy, for good and bad," he said. "Why should political parties be limited to the amounts of contribution? What is the direct connection with corruption? There's not. I mean, you're steps removed from corruption…. I would hope that eventually the parties would be restored."

In the meantime, though, there are groups like American Crossroads, which was formed last year shortly after the high court ruled that groups acting independently of political parties or candidates could accept unlimited donations from individuals and corporations. Counseled by President George W. Bush's political guru, Karl Rove, the group also formed Crossroads GPS. The two groups share offices and Steven Law is president of both.

At Friday's breakfast, Law refused to substantively address the issue of whether the GPS group, which organized itself as a nonprofit organization under the 501(c)(4) section of the tax code in order to not have to disclose its donors, actually qualifies under Internal Revenue Service rules. Such groups are supposed to devote more than half of their energies to non-election-related social welfare activities, and the IRS has yet to rule on its status.

Experts consulted by The Huffington Post have said that a denial of the group's 501(c)(4) status would be devastating to its finances. But Law refused to even entertain the notion that the group won't get approved.

"We're well within where we need to be to be compliant," he insisted. Asked what percentage of GPS' budget goes to non-election-related activities, Law simply said he is "very comfortable" with the allocation between the group's social welfare and political activities.

And Law made it clear that neither Crossroads group will be spending their money on positive -- or what he called "defensive" -- ads. Groups like his devote their resources to "pointing out concerns about the other side's record and policies."

Law also said that while the groups won't involve themselves in the Republican primaries, they won't wait until there's a Republican nominee to start bashing President Barack Obama.

The groups' ability to get moving early will likely be fueled by high-dollar funders. A new report filed yesterday with the Federal Election Commission (FEC) shows that American Crossroads has raised $3.8 million this year. Over 90 percent of that money came from just three donors.

The group pulled in $2 million from the living trust of Jerry Perenchio, the owner of Univision, $1 million from Texas businessman Robert Rowling, and an additional $500,000 from Texas home-builder Bob Perry. All are long time Republican Party donors from the network that helped Bush twice win the White House.

Perry and Rowling have consistently been American Crossroads' biggest backers, having now combined to give the group $13.3 million of the total $30 million raised since its founding. These levels of contributions would be impossible under the law as it existed before the the Supreme Court decisions.

The new FEC report comes after American Crossroads ran advertisements in the special election in New York's 26th congressional district.

Despite backing a loser -- the race was won by Democrat Kathy Hochul -- Crossroads was the biggest spender among non-party groups in the special election, with over $600,000 in expenses.

Last year, the two Crossroads groups combined to spend $37 million on congressional races. That total surpasses the $32 million spent by the U.S. Chamber of Commerce, which many thought was the biggest outside group spender during the 2010 midterm elections.

UPDATE: 6:00 p.m. - On Friday afternoon Crossroads president Steven Law announced that Crossroads GPS, the 501(c)4 group, would commence a $20 million advertising campaign targeting President Barack Obama with a $5 million buy next week.

The first ad, titled "Shovel Ready," assails the president's record on the economy showing rises in unemployment, the price of gas, and the national debt.

“President Obama may have inherited a recession, but his policies have made things worse for everyday Americans by running up the debt and causing economic uncertainty,” said Steven Law, president of Crossroads GPS.

The states targeted include swing states and those where Senate races are expected to be tight. The states are Colorado, Florida, Iowa, Missouri, Montana, Nebraska, North Carolina, New Mexico, Nevada, and Virginia.

Crossroads GPS is a nonprofit organization that does not have to disclose its donors to the public. It was reported that the group raised $70 million last year.