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Crossroads GPS Donor Disclosure Sought By FEC, Again

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CROSSROADS GPS DONOR DISCLOSURE
Republican strategist Karl Rove gestures at the California Republican Party convention in Sacramento on March 2, 2013. (AP Photo/Rich Pedroncelli) | AP

WASHINGTON -- For the third time, the Federal Election Commission has sent a letter to Crossroads GPS, the "dark money" nonprofit founded by Karl Rove, stating that the group had failed to comply with disclosure rules for political spending in the run-up to an election.

In its request for information on Tuesday, the FEC said that Crossroads GPS must disclose contributors to the $50 million the group spent in the final three months of 2012 under a statute that requires the disclosure of contributions earmarked for specific candidates or races. The FEC's letter appears to endorse a broader version of the law by seeking the names of all donors, a reading of the law challenged by Crossroads GPS.

"Line 7 of your FEC Form 5 filing discloses disbursements made for independent expenditures," the FEC letter states. "However, no contributions are disclosed on Line 6, 'Total Contributions.' Each contributor who made a donation in excess of $200 to further the independent expenditures must be itemized on Schedule 5-A, including their identification information. Please amend your report to provide the missing information."

Crossroads GPS, a social welfare nonprofit that is generally not obligated to name its donors, refused to comply with identical requests to disclose its donors in 2010. In a 2011 letter to the agency, Crossroads lawyers Thomas Josefiak and Michael Bayes contended that the law in question only requires the disclosure of contributions made by donors who had earmarked their contribution to a specific candidate or race.

"The question is not how an organization subsequently chooses to use a contribution, but whether the donor's contribution was given 'for the purpose of furthering the reported independent expenditure,'" Josefiak and Bayes wrote. "No contributions accepted by Crossroads Grassroots Policy Strategies were solicited or received 'for the purpose of furthering the reported independent expenditure.'"

Crossroads GPS spokesman Jonathan Collegio reiterated this position to The Huffington Post: "The FEC is asking whether Crossroads GPS received contributions specifically earmarked for independent expenditures, and as we have stated in the past in response to similar inquiries there are no such contributions to report."

The FEC's third letter follows a November 2012 complaint from the watchdog group Citizens for Responsibility and Ethics in Washington asking the agency to compel disclosure from Crossroads GPS. CREW was responding to a Bloomberg Businessweek report on an August 2012 fundraiser at which Rove said that a donor had promised $3 million for the highly contested Ohio Senate race if others would kick in an additional $3 million.

Crossroads GPS ultimately spent more than $6 million on independent expenditures in the Ohio race, including $4 million recorded in the year-end report now singled out by the FEC.

At the same fundraiser, Rove also intimated that a "benefactor" had promised to donate $10 million for the Florida Senate race if it were matched by other donors and if former Florida Gov. Jeb Bush (R) began making fundraising phone calls, according to Bloomberg Businessweek

Crossroads GPS wound up spending nothing on the Florida race, and its sister super PAC American Crossroads, which is required to disclose its donors, spent just $4 million on that contest.

Despite Rove's apparent clarity, his statements may not be enough to show that Crossroads GPS failed to disclose donors who had earmarked contributions, said Campaign Legal Center lawyer Tara Malloy. The FEC has previously ruled that particular contributions must be shown to have funded not only a specific race or candidate, but a specific advertisement or expenditure, something that Malloy said is nearly impossible to prove.

In any case, Malloy said, an enforcement move against Crossroads GPS would likely end when it reached the desks of the FEC commissioners. "It's very unlikely to be endorsed by the three Republican commissioners," she said.

CORRECTION: An earlier version of this story incorrectly dated the FEC's letter to Crossroads GPS. It was dated Tuesday, April 9.

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