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Obama Campaign, Crossroads GPS Tangle In Complaint Over Secret Donors

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WASHINGTON -- The lawyer for President Barack Obama's reelection campaign has asked the Federal Election Commission to force Karl Rove's non-profit organization Crossroads GPS to register as a political committee and disclose all of its donors.

The Obama campaign's complaint, first reported by The New York Times and obtained by The Huffington Post, came from campaign legal counsel Bob Bauer and stated that a recent appeals court decision requires the government to explicitly define what constitutes a political committee. The complaint was sent to both the FEC and to Crossroads GPS president Steven Law and founder Karl Rove.

"The FEC may, and by statutory mandate should, apply a test to the activities of organizations like Crossroads that will inevitably reveal them to be 'political committees', not charities, because their 'major purpose' is to elect candidates to federal office," wrote Bauer, citing a June 12 ruling by the 4th Circuit U.S. Court of Appeals in the case of Real Truth About Obama v. FEC. Crossroads GPS meets the definition of a political committee under the FEC's tests, the letter said. These include the content of the group's advertisements and the founding of the organization by a coterie of Republican Party operatives, including former White House political director Rove.

Crossroads GPS is registered under section 501(c)(4) of the tax code as a social welfare non-profit and does not disclose its donors. The group, founded by Rove and other high-level Republican Party operatives in 2010, has already spent tens of millions of dollars on advertising attacking Obama and Democratic Senate candidates in this year's elections.

Corporations and non-profit groups like Crossroads were freed to spend money on direct electoral ads by the Supreme Court's 2010 Citizens United decision.

"We're generally skeptical of complaint letters sent to The New York Times -– and that we’re cc’d on," Crossroads GPS spokesman Jonathan Collegio said in an email. "The big question is whether Bauer sent a similar letter to Priorities USA -– a group modeled after Crossroads GPS to support President Obama’s policies."

"What the Fourth Circuit decision did was to endorse the FEC's approach of who counts as a political committee," said University of California-Irvine election law professor Rick Hasen, who predicted that complaints against Crossroads would emerge from "campaign reform groups and/or Democrats" after the Real Truth decision.

Hasen said he believes that the partisan split on the FEC could leave it to deadlock on this complaint. The FEC usually takes its time. A similar complaint in 2004 against groups registered under section 527 of the tax code, including the Swift Boat Veterans for Truth and Americans Coming Together, took more than a year to wind its way through the FEC before these groups were ruled to have been acting as political committees without registering.

The appeals court's Real Truth About Obama ruling solidified the legal support for the FEC's test to determine whether a group must register as a political committee. Those tests require the FEC to prove that a committee's primary purpose is to elect or defeat federal candidates and to show that a given advertisement counts as advocacy or the "functional equivalent."

Crossroads "has built all the ads in question around the promise of building a 'new majority,'" Bauer said in the complaint. It also noted, "These communications are directed to swing or battleground states, further underscoring their electoral purpose."

The complaint cited a statement Crossroads spokesman Collegio made to the National Journal about its targeting of Sen. Ben Nelson (D-Neb.) to emphasize its political nature, "We want Ben Nelson to recognize that 2012 will be an extraordinarily grueling proposition in the case he decides to run." Nelson decided not to run for reelection.

Some campaign finance watchdogs said they remain skeptical that the appeals court decision changes anything for the FEC and its political committee tests.

"The court's decision in the Real Truth case maintains the status quo," says Paul S. Ryan, a lawyer with the Campaign Legal Center. "The court did not change the test for political committee status, but rather reaffirmed the approach the FEC has used to determine a group's primary purpose."

The Campaign Legal Center does question the Crossroads GPS claim to be a social welfare non-profit and has filed complaints with the Internal Revenue Service to deny the group, and others that include the pro-Obama non-profit Priorities USA (not to be confused with its sister super PAC Priorities USA Action), tax-exempt status.

"There certainly seems to be some basis for this complaint that Crossroads GPS should register as a political committee," Ryan said.

Below, a list of super PAC donors looking to make their mark on the 2012 elections:

Donors Giving $500,000-Plus To Super PACs
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