Karl Rove’s Deal With the Devil Could Be Coming Unraveled

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Karl Rove at a book signing in Birmingham, 2010

By Glynn Wilson

Political animal Karl “Turd Blossom” Rove’s deal with the devil could be coming unraveled. It just goes to show it never pays to trust the dark side.

The independent Web-based investigative news outlet ProPublica has somehow obtained the tax-exempt application filed with the Internal Revenue Service on behalf of Rove’s new Republican political attack group, American Crossroads GPS.

Rove organized the group as a 501(c)4 “social welfare” organization, and because of the Supreme Court ruling in Citizens United vs. FEC, it is allowed to raise unlimited amounts of money without disclosing its donors. According to the report, the IRS has not yet recognized Crossroads as tax exempt, which may mean the tax agency could be giving the application, filed in June of 2010, additional scrutiny. If Crossroads GPS is ultimately not recognized, it could be forced to reveal the identities of its donors.

The U.S. tax code allows groups like Crossroads to spend money on political campaigns and to keep their donors private — as long as their primary purpose is to enhance “social welfare.” But where is the possible “social welfare” that could be made possible by a group for which the sole purpose is to smear Democrats and get conservative Republicans elected? Perhaps that’s why the IRS has not yet approved the application.

We suspect Rove was counting on Republican Mitt Romney winning the presidency and therefore gaining influence over the policies of the IRS, just as George W. Bush did after the hanging-chad election of 2000 when one of the first policies changed was to issue an executive order through a signing statement mandating that IRS investigators go after small time tax cheats who owed $500 or less rather than major corporate tax cheats who moved money offshore, like Mitt Romney’s Bain Capital.

While in the confidential document Rove’s Crossroads admitted that it intended to influence elections, clearly the application is full of lies and should be investigated by the IRS.

“Consistent with the Supreme Court’s decision in Citizens United v. Federal Election Commission, the organization may, in the future, develop and/or distribute independent political communications,” the document says. But, “any such activity will be limited in amount, and will not constitute the organization’s primary purpose.” Right. The only reason it was created was to raise millions of dollars from private big money Republican donors and to smear Democrats and try to get Republicans elected.

Not counting cash contributions that went unreported, Crossroads did report more than $70 million in spending on elections to the Federal Election Commission in 2012, according to the Center for Responsive Politics. Virtually all of that was spent opposing Democrats, as well as an additional $50 million on anti-Obama attack ads which fell outside the Federal Election Commission reporting window.

You’ve got to hand it to how slick an operation Rove runs, but perhaps the dead skeletons are about to come out of the closet.

The breakdown of planned activities offered up by Rove in the filing would be a joke if the consequences were not so potentially tragic. He says the group would spend half its time on “public education,” which I suppose means educating the public on why taxes and government are bad and voting Republican is like cleanliness, next to godliness.

Some 30 percent was to go for “activity to influence legislation and policymaking,” another way to describe “lobbying,” and 20 percent was for “research,” like paying disgraced former Mobile Press-Register reporter Eddie Curran to conduct “opposition research” against Democrats.

The so-called public education efforts were to be conducted “through a wide variety of communications channels, including paid advertising.” Perhaps some Democratic groups could learn a thing or two from this application.

The activity to influence legislation and policymaking was allegedly supposed to get “citizens to participate in grassroots advocacy on pending legislative issues through paid advertising, mailings, e-mails and Web-based advocacy tools.”

Could that have been spent to pay right-wingers to make blog comments? Were hackers paid to go after liberal blogs? The IRS and other federal law enforcement agencies should investigate.

Paul Ryan, senior counsel for the Campaign Legal Center, told ProPublica that Rove’s application “does not seem to align with what they actually did, which was to raise and spend hundreds of millions to influence candidate elections.”

The IRS has not yet recognized Crossroads GPS as tax exempt, which complicates how ProPublica obtained it. The application was sent to ProPublica in response to a public-records request, but it did not include an official IRS recognition letter, typically attached to applications of nonprofits that have been recognized. The IRS is only required to give out applications of groups recognized as tax-exempt.

“As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved,” Jonathan Collegio, a Crossroads spokesman, told ProPublica in an email. Wrong.

An IRS spokeswoman told another independent Web-based news outlet Friday, Talking Points Memo, that the agency had no record of an approved application for Crossroads GPS, meaning that the group’s application is still in limbo.

“It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt,” wrote the spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both. The IRS would not comment further on the Crossroads application.

Richard Tofel, ProPublica’s general manager, said in a statement that the organization believes the information it is publishing is “not barred by the statute cited by the IRS.” Parts of the document were redacted to remove financial information.

Based on the extent of Crossroads’ campaign activities, Obama’s re-election campaign has asked the FEC to force it to register as a political action committee and disclose its donors. So far there apparently has been no ruling on that request.

According to ProPublica, the IRS rarely pursues criminal charges against nonprofits based on statements in their applications. It’s more common for the agency to deny recognition or revoke a group’s tax-exempt status. Perhaps this case is so egregious it merits a criminal investigation. So much for Karl Rove’s deal with the devil.

In a letter to Congress in September, the IRS said it was engaged in “more than 70 ongoing examinations” of social welfare nonprofits. Earlier, in its work plan for the 2012 fiscal year, the agency said it was taking a hard look at social welfare nonprofits with “serious allegations of impermissible political intervention.”

Campaign finance watchdog Fred Wertheimer, who runs Democracy 21 and has filed several complaints to the IRS about Crossroads, said the group’s application for recognition showed why more aggressive enforcement is needed.

“When you read what they say on their application, there are a lot of words there. But I find them to be disingenuous and to have little to do with why Karl Rove founded this organization,” Wertheimer said. “If you believe this is a social welfare organization, I have a rocket that can get you to the moon very quickly and at very little cost.”

Editor’s Note: This is precisely the type of reporting for which we must build an alternative, independent Web Press in this country. While this reporting could have been done by newspapers such as the Washington Post or the New York Times, for whatever reason, it is not being done anymore — except by Web-based news outlets such as ProPublica, The TPM-Muckraker — and The Locust Fork News-Journal.

© 2012, Glynn Wilson. All rights reserved.

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