Tax documents from Karl Rove’s Crossroads GPS show that Grover Norquist’s Americans for Tax Reform (ATR) is largely funded by Rove, ProPublica’s Kim Barker reports.
“Social welfare nonprofits, also known as dark money groups because they don’t have to report their donors, are allowed to spend money on politics as long as their primary purpose is social welfare,” Barker wrote on Monday. “The groups often count so-called issue ads that stop short of advocating for or against a candidate and grants toward that social welfare mission. Since the Supreme Court’s 2010 Citizens United decision allowed corporations and unions to spend directly on election ads, these nonprofits have turned into the vehicle of choice for anonymous spending, dumping more than $254 million into the 2012 elections. Of the 150 or so social welfare nonprofits that reported spending to the Federal Election Commission during the 2012 election cycle, Crossroads was king, the biggest anonymous spender by far. Americans for Tax Reform came in fourth, with $15.8 million.”
On its 2012 tax return, Barker reported, the biggest grant Rove’s Crossroads GPS gave to anybody was a $26.4 million grant it gave to Norquist’s ATR for “social welfare.”
There are also questions about the legality of Rove’s and Norquist’s arrangement, Barker noted throughout her piece, questioning the use of the money for politicking.
“On its 2012 tax return, GOP strategist Karl Rove’s dark money behemoth Crossroads GPS justified its status as a tax-exempt social welfare group in part by citing its grants of $35 million to other similarly aligned nonprofits,” Barker wrote. “The return, signed under penalty of perjury, specified that the grants would be used for social welfare purposes, ‘and not for political expenditures, consistent with the organization’s tax-exempt mission.'”
But, Barker reports, “that is not what happened.”
Barker notes that the tax return documents, which were made public by Rove’s group last week, show that $11.2 million worth of the funding Rove’s group gave to Norquist’s ATR were spent on “political activities expressly advocating for or against candidates.” That means that $85.7 million of Rove’s group’s 2012 activities were political, instead of the $74.5 million it reported to the IRS.
Marcus Owens, the former head of the IRS’s Exempt Organizations division, told ProPublica that because of the way Norquist’s ATR operated with Rove’s Crossroads GPS’s money last year, Norquist is a “bad grantee.”
“They have a bad grantee here,” Owens said. “My question would be, What has Crossroads done to recover that money?’ That’s what the IRS would expect.”
ATR spokesman John Kartch and Rove spokesman Jonathan Collegio both declined to answer specific questions from ProPublica about the grant.
But Collegio did suggest to ProPublica, however, that perhaps the money Norquist’s group spent with Rove’s grant on politicking had been carried over from 2011. “Were resources carried over from 2011?” Collegio asked in an email to Barker.
“But after consulting with tax experts, ProPublica determined Americans for Tax Reform couldn’t have used resources from 2011 for the political spending,” Barker wrote in response to Collegio’s attempt to spin her on Rove’s behalf.
“That’s called bullshit with a serving of horseshit on the side,” Owens, the former IRS official, said in response as well.
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