New tax documents show Crossroads GPS poured millions into 2014 Senate race

Introduction

Crossroads GPS, one of the nation’s largest politically active “dark money” nonprofits, quietly supplied millions of dollars in 2014 to other politically active nonprofit groups seeking to influence the midterm elections, according to new tax filings reviewed by the Center for Public Integrity.

One group received nearly all its money from Crossroads GPS: Carolina Rising, a North Carolina-based group that sprang up and spent almost all its money running thousands of TV ads that boosted now-U.S. Sen. Thom Tillis in what was one of the nation’s most hotly contested Senate races.

Crossroads GPS reported giving Carolina Rising $4.82 million, or roughly 99 percent of its revenue. The group appears to have received only one other contribution, for $60,000, according to a tax filing posted by Citizens for Responsibility and Ethics in Washington, a watchdog group that last month filed a complaint against Carolina Rising with the Internal Revenue Service.

Crossroads GPS and Carolina Rising are both “social welfare” nonprofits organized under section 501(c)(4) of the U.S. tax code. Such nonprofits have assumed new, high-profile roles in the wake of the Supreme Court’s Citizens United v. FEC decision in 2010.

Their nonprofit status means they aren’t required to reveal their donors, making the source of the money behind the Carolina Rising ads — filtered through two different layers of anonymity — nearly impossible to penetrate.

Crossroads GPS — together with a related super political action committee, American Crossroads, that does reveal its donors — spent nearly $49 million directly on the 2014 elections, all supporting Republican candidates, according to campaign finance data tracked by the Center for Responsive Politics.

The two groups were co-founded by Karl Rove, a political strategist and former advisor to then-President George W. Bush.

Targeting the Senate

But the new tax filing shows Crossroads GPS also gave millions in additional money to other groups that were active in the crucial 2014 elections, when the parties battled fiercely over control of the U.S. Senate.

Republicans won, and the new documents prove Crossroads’ influence was far larger than the public knew.

Crossroads GPS gave $5.25 million to the U.S. Chamber of Commerce, the behemoth business lobby that spent $35.5 million on the midterm elections, almost all of which supported Republican candidates. Chamber-backed candidates won big.

Scott Reed, the Chamber’s senior political strategist, was not immediately available to comment on the Chamber’s relationship with Crossroads GPS. A spokeswoman for the Chamber declined to comment.

Crossroads GPS gave $2 million to the American Future Fund, an Iowa-based group that spent about $3 million during the 2014 elections on House and Senate races, according to the Center for Responsive Politics.

The Kentucky Opportunity Coalition, another “social welfare” nonprofit on the Crossroads GPS grantee list, boosted Senate Majority Leader Mitch McConnell, R-Ky., during his hotly contested re-election bid last year.

Ahead of that election, the Kentucky Opportunity Coalition spent more than $14 million on advertising — and accounted for about one of every seven TV ads in the contest. Most of the group’s ads praised McConnell and his support for Kentucky’s coal industry, or criticized McConnell’s Democratic opponent, Alison Lundergan Grimes, who ultimately lost the race.

The Kentucky Opportunity Coalition received $390,000 from Crossroads GPS.

Reached by the Center for Public Integrity, Scott Jennings, a spokesman for the Kentucky Opportunity Coalition, declined to comment.

Not so ‘diverse’

The fact that Carolina Rising received nearly all of its money from Crossroads directly contradicts what Dallas Woodhouse, now the head of the state Republican Party, told the Center for Public Integrity in a November 2014 interview.

In November, Woodhouse said Carolina Rising was funded by multiple donors, and the organization had “a large, diverse donor body.”

He did not immediately respond to an email requesting comment on the Crossroads GPS grant, or questions from the Center for Public Integrity regarding the apparent contradiction with his earlier comments.

He has said Carolina Rising spent roughly $4.7 million on the Tillis ads, or roughly all its money. In addition, he has repeatedly described the ads as nonpolitical issue ads because they didn’t explicitly tell voters to vote for or against anyone.

Revenue at Crossroads GPS jumped to more than $69 million in 2014 from a low of about $3.4 million in 2013, a non-election year.

Spending soared, too, from slightly more than $4 million to nearly $66 million.

Crossroads GPS reported receiving 80 contributions of $5,000 or more during 2014, including one for $20.6 million and another for $14.5 million.

The group spent more than $13.6 million on grants to other groups, all described as for the purpose of “social welfare.”

In response to a request for comment on the grants, Crossroads GPS spokesman Ian Prior said they were not made for political purposes.

“We made grants to other non-profit organizations to promote the (c)4 mission of Crossroads GPS,” he said in an email. “We are confident based on our written agreements with each one of those non-profit organizations that our grants were used for the non-political purposes that they were given.”

Michael Beckel contributed to this report.