To jumpstart fundraising, the pro-Republican American Crossroads 527 group is reaching out to powerful politicos such as ex-Sen. Phil Gramm of Texas and aggressively using a new money-collecting entity that can give donors more privacy.
Lackluster fundraising in April and May pulled in only a total of roughly $1.25 million, prompting American Crossroads to recently set up a 501(c)(4) nonprofit arm that is also allowed to get involved in political campaigns, but is less transparent in reporting requirements. Deploying both entities, American Crossroads raised about $8.5 million in June, says Steven Law, the group’s president. Politico first reported the $8.5 million total and some details about the new 501(c)(4)
But sources tell the Center for Public Integrity that only about half of that total went to the 527 group and is slated to be reported publicly on July 20. The other half went to the new 501(c)(4) group — American Crossroads GPS — which does not have to disclose its donors until early 2011.
“There are some kinds of donors who prefer the anonymity of a 501©(4),” Law said in an interview. The new 501©(4) will also allow American Crossroads to run ads focusing on legislative issues such as taxes, the deficit and health care in the coming months, he said.
Both types of groups are named after sections of the U.S. tax law. A 527 group requires monthly disclosure of donors to the IRS and can accept unlimited funds from individuals and corporations. A 501(c)(4) can also accept unlimited amounts from donors; but it needn’t disclose its contributors regularly and has some curbs on its spending.
Meanwhile, to pull in more funds for both the new 501 group and the 527 group — which was launched in the spring with help from GOP fundraising stars Ed Gillespie and Karl Rove — American Crossroads is also trying to line up other heavy hitters like Gramm to lure more donations.
Gramm, now a vice chairman with investment banking giant UBS, has tentatively agreed to help, says one fundraising source who notes that the Texan once chaired the National Republican Senatorial Committee.
Another source familiar with Gramm calls him “supportive” of American Crossroads, which is trying to corral more than $50 million this year to run television ads and conduct get out the vote drives to boost the fortunes of a few dozen GOP Senate and House candidates in November.
Over the last few weeks, American Crossroads has spent about $500,000 on issue ads in Nevada that slammed Senate Majority Leader Harry Reid and more may be coming. Further, Law says that this summer the group is likely to run other issue ads in “at least” a handful of states with high-stakes races where the GOP hopes to pick up seats in both chambers. The group has indicated that it hopes to run ads to help GOP Senate candidates in such key states as Colorado, Missouri, New Hampshire, Ohio, Pennsylvania, and a few others.
Law said that American Crossroads is still weighing whether it will run ads this year directly endorsing GOP candidates, a step that is legal since the controversial U.S. Supreme Court decision, Citizens United vs. FEC, was handed down in early 2010.
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