The FEC this week sent a letter demanding Crossroads GPS, the Karl Rove-backed nonprofit that pumped millions of dollars in anonymous donations into last year's Congressional campaigns, disclose its contributors. The request appears unlikely to be honored but it could signal an effort to tighten regulations on controversial third-party groups.
On Tuesday, the FEC sent two letters, each from Senior Campaign Finance Analyst Christopher Whyrick, asking Crossroads to amend campaign expenditure reports to include information about the donors who funded its political ads. One letter referred to the group’s October’s quarterly disclosure form, the other to its year-end report.
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“Commission regulations require that you disclose identification information for each individual who made a donation used to fund the independent expenditure,” the letter reads, quoting FEC regulations. “Please amend the report to provide the missing information.”
The letter says Crossroads must respond by July 19, with no extension possible.
On its face, the letters amount to an incendiary request. Crossroads GPS, along with an array of other non-profit 501(c)4 groups, were a major force during the 2010 elections in part because of their ability to keep donors secret. The groups, most of which backed conservatives, were highly controversial for Democrats, and President Obama frequently criticized them while campaigning. But Democrats have subsequently created their own counterpart organizations for next year's campaign.
A Crossroads spokesman and campaign-finance watchdogs alike agree that the FEC request is easily sidestepped. It applies only to contributions that were specifically earmarked for independent expenditures. Donations to Crossroads, group spokesman Jonathan Collegio told National Journal, were never earmarked that way.
"This is a routine request for additional information by the FEC's Reports Analysis Division,” he said. “Crossroads GPS will provide an adequate response in the appropriate time, saying essentially that its reports were full and complete, and that there are no donors to report because no contributions were earmarked for any particular electioneering communication or independent expenditure.”
His assessment was shared by Paul Ryan, an attorney for the Campaign Legal Center, a group that aims to reduce the influence of money in politics. Nearly all the money Crossroads collects is funneled toward political advertisements, Ryan said, but the group isn’t required to disclose donors unless they specifically earmark their donation for the political ads, making disclosure easily avoidable.
The fact Crossroads can easily fend off the FEC’s request is a testament to just how broken campaign-finance laws are, Ryan added. “What you’re looking at is a perfect illustration of how disclosure laws aren’t working today,” he said.
Even so, the letter serves notice that the plethora of nonprofit groups that sprang up following the Supreme Court's landmark Citizens United ruling are under greater scrutiny from campaign-finance regulators. The FEC's letter follows a notice earlier this year that the IRS may seek back payment of gift taxes from donors to several nonprofit groups. While the groups involved in the letters were never identified, conservative attorneys read the move as a sign the feds might start cracking down on political organizations.
In addition, President Obama has been considering an executive order mandating that all federal contractors disclose their political donations.