American Crossroads GPS, a spin-off of a 527 group started by Karl Rove, has raised $5.1 million in June, its first month of operation. Rove-linked group uses secret donors to fund attacks

A new political operation conceived by Republican operatives Karl Rove and Ed Gillespie formed a spinoff group last month that - thanks in part to its ability to promise donors anonymity - has brought in more money in its first month than the parent organization has raised since it started in March.

The new group, called American Crossroads GPS, has been telling donors their contributions would be used to dig up dirt on Congressional Democrats’ “expense account abuses” and to frame the BP oil spill as “Obama’s Katrina.”


The GPS group pulled in $5.1 million in June, its first month in operation, while the original American Crossroads, which has spent $600,000 on tough ads blistering Senate Majority Leader Harry Reid, has pulled in $4.7 million since its launch.

American Crossroads was incorporated under Section 527 of the Internal Revenue Service code, which requires it to disclose its contributions and expenditures on a monthly basis, but also gives it more flexibility in terms of how it can spend its cash, including allowing it to spend most of its money on ads attacking or supporting candidates.

American Crossroads GPS, on the other hand, is incorporated under Section 501(c)4, which requires it to spend the bulk of its cash focusing on issues, but frees it from having to disclose the names of its donors. In fact, it won’t be required to publicly report any of its finances until at least May 2011.

According to a “ concept paper” that was distributed last month to wealthy Republicans donors, American Crossroads GPS intends to build a “micro-team(s) of researchers and polling professionals” and “list development professionals and direct contact (mail/phones) consultants” to develop and disseminate “hard-hitting issue advocacy” attack Democrats by “exposing ObamaCare” as well as “the great ‘stimulus’ rip-off” and “the new federal bureaucrat elite – paid for by struggling private sector families.”

A spokesman on Tuesday said American Crossroads GPS, combined with its parent group, intended to raise a combined total of “approximately $50 million” to attack Democrats and boost Republicans headed into the 2010 midterm elections.

But that seems to be a downgrading of ambitions, given that when American Crossroads publicly launched it boasted that it would raise between $50 million and $60 million, while the spin-off has set a budget of $43 million, according to the “concept paper. ”

Jonathan Collegio, a spokesman for both groups, said Tuesday that “we’ve consistently said that we intend to raise at least $52 million overall for our efforts – the fact that we’re raising it for two groups instead of one is a distinction without a difference.”

Steven Law, the head of both Crossroads groups, announced in June that his team had started the GPS spin-off – and that the two groups raised a combined $8.5 million June – days after POLITICO revealed that American Crossroads raised just $200 in May, prompting mocking reports by liberal media outlets.

But the group had a much better June, bringing in $3.4 million and boosting the total it has raised since its inception to $4.7 million, according to a report it filed Tuesday with the IRS.

Law conceded that the anonymity of the new 501(c)4 GPS group was appealing for some donors, but added that wasn’t the reason his team formed the spin-off.

“The genesis of it from our perspective was that there are a number of things that are priorities for us that seemed to fit more into a 501(c)4 than a 527, such as doing very legislatively focused issue advocacy activity which we will be undertaking in the next few months,” Law said, adding that American Crossroads had already received more than $30 million in pledged donations.

But a veteran GOP operative familiar with the group’s fundraising activities said the spin-off was formed largely because donors were reluctant to see their names publicly associated with giving to a 527 group, least of all one associated with Rove, who Democrats still revile for his role in running former President George W. Bush’s political operation.

GPS’s concept paper says that if it meets its fundraising goals, it will spend $18 million on “issue advocacy,” $15 million on “targeted grassroots advocacy,” $3 million on “issue research,” $2 million on polling and $5 million buying, renting and enhancing lists.

The paper says the GPS group will conduct “in-depth research on congressional expense account Abuses,” to blame Democrats for “failed border controls” and to frame the BP oil spill as “Obama’s Katrina.” But, Collegio insisted, “Crossroads GPS does not invest in opposition research.”

According to the paper, the group promises to “build the highest-quality national list of center-right advocates” by early August and to “deploy advertising and other issue information in August/September in key markets.” “We’re on track with both of those efforts,” Collegio said.

Law said GPS has hired an issues director – Steven Duffield, who has worked as a policy aide to the Republican National Committee and the Senate Republican Conference. And Collegio added that American Crossroads political director - National Republican Congressional Committee veteran Carl Forti, whose consulting firm has been paid more than $15,000 by the 527 - is overseeing a “Crossroads GPS micro-targeting effort.”

That effort is focused on seven states - Colorado, Florida, Missouri, New Hampshire, Nevada, Ohio and Washington - according to a new website unveiled Tuesday.

Neither Collegio nor Law was willing to discuss much about the new group. “We’re not inclined to get into much detail about the 501(c)4 on the financial side given its different reporting status,” Law explained in an email.

CLARIFICATION: This story was updated to include this quotation from American Crosswords GPS spokesman Jonathan Collegio: “Crossroads GPS does not invest in opposition research.”