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Jan. 31, 2014

Groups Sue FEC, Call on Federal Court to Overturn Dismissal of Complaint Against Crossroads GPS

Watchdog Groups Said Crossroads GPS Should Be Registered as a Political Committee and Subject to Disclosure; FEC General Counsel and Half of Commission Agreed

WASHINGTON, D.C. – A court should overturn the Federal Election Commission’s (FEC) dismissal of a complaint about the secretive political spending group Crossroads Grassroots Political Strategies (GPS), watchdog groups said in a lawsuit filed today against the commission in the U.S. District Court for the District of Columbia.

The lawsuit, Public Citizen v. FEC, was brought by the parties to the 2010 complaint: Public Citizen; Craig Holman, campaign finance expert for Public Citizen; ProtectOurElections.org; and Kevin Zeese, an attorney for ProtectOurElections.org. The Campaign Legal Center and Public Citizen are handling the legal work on the case as co-counsel for the parties.

The groups contend that Crossroads GPS – an organization created by Republican strategists Karl Rove and Ed Gillespie to influence the 2010 midterm elections – fits the legal definition of a political committee: any group that receives or spends more than $1,000 during a calendar year to influence elections and whose major purpose is to support or oppose the election of federal candidates. Political committees must disclose information about their donors and expenditures. However, because the FEC has refused to investigate whether Crossroads GPS is a political committee, the organization will continue to keep its donors secret.

“Dark Money groups like Crossroads GPS have led to even further corruption of our political system and erosion of our democracy,” said Robert Weissman, president of Public Citizen. “If Crossroads GPS gets away with this, it will be an open invitation to every corporation and wealthy individual who wants to propel specific candidates into office. The voices of all those voters who don’t have millions of dollars to spend on elections will not be heard.”

In 2007, the FEC published a detailed policy laying out how the agency will determine an organization’s major purpose. The policy provides that the FEC will consider public and non-public statements by the organization and the proportion of spending on “federal election activity,” which includes spending on express advocacy (messages calling for a vote for or against a candidate) as well as electioneering communications and other materials that discuss the merits of a candidate immediately before an election.

Evidence indicates that Crossroads GPS operates as a political committee. Between June and December 2010, Crossroads GPS spent $20.8 million on federal campaign activity – more than half of what Crossroads GPS reported spending the entire year, the FEC’s general counsel determined.

And Crossroads GPS’ co-founder, the Republican strategist Karl Rove, boasted on FOX News that Crossroads GPS was an avenue for donors who had maxed out to GOP political committees. In October 2010, the group announced a $4.2 million ad buy targeting eight hotly contested U.S. Senate races. Three-quarters of the ad buy was paid for with money from undisclosed donors.

“Despite these findings, the Republican bloc of commissioners ignored the agency’s own policy for determining political committee status,” said Zeese of ProtectOurElections.org. “They refused to count electioneering communications and public statements in evaluating the major purpose of Crossroads GPS.”

Under the law, political committees must disclose the identities of their donors. But Crossroads GPS has applied for status as a 501(c)(4) nonprofit social welfare group, which is not required to divulge funder names under the tax code. So voters didn’t know who was behind all those midterm congressional election ads.

In response to the complaint, the FEC’s own general counsel determined that there is substantial reason to believe Crossroads GPS is a political committee. But the FEC deadlocked 3-3 along party lines in December 2013 over whether to investigate further, so it dismissed the complaint.

“Three members of the FEC have chosen to ignore the commission’s own well-established policies and the strong urging of its own general counsel to investigate these apparent violations, so there is no other recourse but the courts to make the commissioners fulfill the duties of their office,” said Paul S. Ryan, senior counsel for the Campaign Legal Center. “The 'see no evil’ posture adopted by the three Republican commissioners in ignoring what appear to be clear cut violations of the law and to not even allow an investigation is simply disgraceful.”

Read the lawsuit. View a copy of the 2010 complaint.

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