July 29, 2012
WASHINGTON -- In May, the conservative nonprofit group Crossroads GPS, founded by famed political strategist Karl Rove and other leading Republican operatives, ran a television ad showcasing a fictional mother who had supported Barack Obama in 2008. The mom was disappointed in Obama's performance, saddled as she was with two adult children who had moved back in with her due to the stalled economy. The ad was the centerpiece of a $25 million campaign -- one of the biggest ad buys so far in the 2012 election cycle.
Despite the fact that the ad's central message was the failure of the president, it wasn't considered a campaign ad under election laws. Although the group spends tens of millions of dollars on ads targeting Democratic candidates, Crossroads GPS is organized as a "social welfare nonprofit" under section 501(c)(4) of the tax code and therefore not subject to the rules governing political organizations.
Whereas super PACs are required to register with the Federal Election Commission and disclose their donors -- people like Sheldon Adelson, the casino magnate who has given millions of dollars to conservative groups so far this election cycle -- nonprofits like Crossroads GPS and trade associations like the U.S. Chamber of Commerce are allowed to keep their donors secret. As a result, there is a great flood of campaign spending this election cycle for which there is no official paper trail.