Jon Stewart Mocks NC Republican Senator Thom Tillis For Deregulating Restaurant Worker Hand-Washing
http://www.salon.com/2015/02/05/jon_stewart_mocks_thom_tillis_for_deregulated_hand_washing_comments/
Pro-Tillis dark money group funded entirely by Crossroads GPS
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GOP Sen. Thom Tillis was elected with significant help from the dark money group Crossroads GPS. (Photo By Al Drago/CQ Roll Call) (CQ Roll Call via AP Images)
11/17/2015, 4:12 PM: This post has been updated to build on the breaking news from this morning’s report.
One of the largest and most prolific politically active nonprofits in the country was virtually the sole backer of Carolina Rising, the group that spent $4.7 million on ads supporting now-Sen. Thom Tillis’ successful run to unseat incumbent Democrat Kay Hagan in 2014. That was nearly 100 percent of Carolina Rising’s spending, asOpenSecrets Blog wrote last month.
Crossroads GPS not only provided 98.7 percent of Carolina Rising’s funds, but it also spent tens of millions of its own money in North Carolina and elsewhere in the midterms, according to tax documents obtained by the Center for Responsive Politics.
GPS, started by veteran Republican strategists Karl Rove and Ed Gillespie, received 86 percent of its funding from a dozen anonymous donors giving more $1 million or more — 65 percent came just four donors that gave at least $5 million each, according to its tax form 990. One of those anonymous donors shelled out more than $20 million. At least one of those donors was casino mogul Sheldon Adelson, according to Politico.
GPS reported nearly $26 million in political spending to the IRS, which tracks closely with the group’s reports to the Federal Election Commission. According to its FEC reports, Crossroads GPS was most active in the most contentious Senate races of the 2014 midterms. However, those totals do not reflect the full spectrum of GPS’ efforts in those races.
As OpenSecrets Blog reported in November 2014, GPS was one of three groups to spend heavily on “educational” ads in the months running up to the elections, only a fraction of which were ever reported to the FEC.
Payments to media firms that specialize in the production of political ads make up a minumum of 65 percent of Crossroads GPS’ spending in 2014. The total is actually higher, but it’s impossible to know by exactly how much because 501(c)(4) organizations are only required to report totals for their top five outside contractors. Four of GPS top contractors show up in its FEC reports as companies contracted to produce its political ads. The group reported paying at least $100,000 to 22 other unnamed entities; at least 11 of the firms that aren’t named in GPS’ tax forms show up in FEC data as the recipients of an additional $4 million from GPS spent on political ads.
These totals are important because 501(c)(4) social welfare organizations like Crossroads GPS are not supposed to have politics as their primary purpose. What the totals suggest is that GPS was directing well over half of its spending to efforts to influence the outcome of the midterm elections.
How can it do that? The way this usually works is that groups like GPS spend heavily on educational “issue ads” that don’t have to be reported to the FEC as long as they don’t call for a candidate’s election or defeat and as long as they don’t run less than 30 days before a primary or 60 days before a general election. These ads are often false — as when GPS ran ads, unreported to the FEC, about how embattled Democratic Sens. Mark Udall and Hagan had voted for a carbon tax, even though no such vote had ever taken place in the Senate. And they run for months, until the FEC’s reporting window opens. Then GPS switches over and begins actively opposing the politicians mentioned in the ads, as GPS did in the cases of Hagan and Udall.
GPS gets around limits on political activity in other ways, too. In all three of the elections in which it has been active, GPS has given sizable grants to other politically active nonprofits, many of which then spent some or all of the money they received on election-related ads. Even though these groups used large sums of GPS’ money to run political ads, GPS counted the grants as social welfare function expenditures.
Take North Carolina, where GPS spent well over the $3.7 million it reported to the FEC, which we know because data from the Wesleyan Media Project, produced in partnership with CRP, shows that it had already run 4,317 ads in the state by the time they reported any spending to the FEC. GPS were able to get even more money into the state by funding Carolina Rising, which used nearly all of the money to make pro-Tillis ads. In the same way that Carolina Rising reported no political spending to the IRS in 2014, GPS counts its grant to Carolina Rising as “social welfare,” not politics.
While Carolina Rising is perhaps the most constructive example of how GPS evades limits on political activity through grants, it is not alone. GPS gave large multimillion dollar grants to the American Future Fund and the US Chamber of Commerce, as well as a $390,000 grant to a second single-candidate 501(c)(4), the Kentucky Opportunity Coalition, which was the largest outside spending organization in the race that saw Senator Mitch McConnell re-elected to Senate in 2014. Each of those groups was active in races where GPS spent heavily.
GPS is worth highlighting for two reasons. First, because of the magnitude of its spending: Crossroads GPS has spent more in the last three election, just in terms of FEC reported spending, than all liberal nondisclosing groups combined have spent in every election since 2000. Second, unlike nearly every other group that has pushed the limits of nonprofit political activity, GPS has yet to receive recognition from the IRS as a social welfare organization. It has now been waiting well over five years for an official determination from the IRS, so the question remains whether it will ultimately get away with its activities thus far or have its application denied by the IRS.
No matter how that pans out, the folks at GPS have already found a way around the IRS application process by taking over a defunct nonprofit called Alliance for America’s Future. It has been rechristened One Nation, and it has already begun spending millions in the 2016 elections, none of which it has reported to the FEC.
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