This story first appeared on ClickZ.
American Crossroads, the Karl Rove-linked super PAC expected to spend big to fight President Obama's reelection, started dropping serious cash online this summer. Since July, American Crossroads has spent over $1 million on digital ads opposing Obama. And, as the group boosts its digital ad spend, its choice of digital media buying firm could raise eyebrows.
Crossroads has worked with Targeted Victory for over a year, and as far back as last spring the conservative organization had expected to increase its online ad budget for 2012. But Targeted Victory also handles digital ad buys for Mitt Romney's campaign.
It's not the first time the same vendor has worked with a candidate campaign and an advocacy group backing the candidate. However, campaigns are required to keep a distance from outside groups backing them. According to Federal Election Commission regulations, when candidates employ the same vendor as a outside group, they are prohibited from coordinating. The idea is to ensure that the unlimited donations super PACs are allowed to accept don't end up as de facto candidate campaign dollars used to support the candidate's strategy.
Targeted Victory set up an office in Boston last May dedicated to serving Romney, in part to prevent staff working on the Crossroads account from sharing information with those working on the Romney campaign. The Republican digital consultancy's Washington, D.C. office handles Crossroads and other client accounts.
The company requires that employees sign a firewall agreement stating what employees can and cannot discuss with people in the other office, and also walls off its tech staff from directly communicating with clients.
"Our staff's been trained on campaign finance law and we set up firewalls to ensure we stay on the right side of it," said Michael Beach, co-founder of Targeted Victory. "We understand the law and are taking necessary steps to comply with it."
When candidates and outside groups employ a common vendor, the FEC does not allow the vendor "to acquire information about the campaign plans, projects, activities or needs of the candidate or political party committee." The agency’s "Three-Prong Coordination Test" also prohibits vendors from using or conveying "information about the plans or needs of the candidate or political party, or information previously used by the vendor in serving the candidate or party, [if] that information is material to the creation, production or distribution of the communication."
In the case of a digital ad vendor like Targeted Victory, coordination hypothetically could occur if people working on the Romney campaign shared information about ad messaging or strategy or about which locations ads would be targeted to and to which voter segments.
"Our vendors understand the law and follow it," wrote Romney campaign spokesperson Andrea Saul in an email sent to ClickZ Politics. Similarly, an American Crossroads spokesperson said all of the organization's vendors have firewalls in place.
When the FEC suspects wrongdoing, it can subpoena a vendor's email or written communications, and ask whether or not the company has a firewall in place and whether there's a written policy associated with it, said Paul S. Ryan, senior counsel at the Campaign Legal Center. "The rules allow very close relationships between candidates and legally independent spenders," he suggested. "They can run such effective campaigns without breaking the rules."
Priorities USA, one of the larger super PACs on the left backing Obama, chose not to use the same company that Obama's campaign hired for digital advertising. In recent months, Priorities USA Action has spent around $600,000 for digital advertising with Global Strategy Group. The Obama camp uses Bully Pulpit Interactive to handle its digital ads.
Of course, when outside groups obtain information about a candidate's communications strategies and media buys via a public source, the FEC does not consider it to be coordination. Some believe there is more information being made publically available by the campaigns than ever this election cycle - which also serves to tip off opponents.
The FEC will not comment on specific instances of possible coordination, and will only delve into such a situation if a formal complaint is filed. Even then, it's difficult to prove whether or not coordination occurred.
"The legal test of coordination is narrow," said Josh Zive, senior counsel at Bracewell & Giuliani, a law firm that helps private sector firms, many in the energy sector, navigate campaign finance law and other federal government relations. In other words, he suggested, what a lay person might suspect as coordination may not actually be illegal according to that narrow scope of the law.
"The body of [campaign finance] law has been so muddied," said Zive, "what the remaining spirit is is difficult to interpret at times."