The biggest dark money group, launched by Republican strategist Karl Rove, shows in its tax filing that it got one donation of nearly $23 million and another of $18 million (Donors names not included)
The dark money giant Crossroads GPS, launched by Republican strategist Karl Rove, told the IRS it raised almost $180 million in 2012, including one donation of $22.5 million, another of $18 million and another of $10 million. Fifty donations were for $1 million or more. Because the group is a social welfare non-profit, none of the donors have to be made public.
The details come from the group’s 2012 tax return, which Crossroads made available today at their Washington office. We picked up a copy and you can see it here.
The group also reported spending almost $75 million on direct and indirect campaign activities.
Crossroads GPS, also known as Crossroads Grassroots Policy Strategies, is the largest social nonprofit active in elections. The group was created after the Supreme Court’s 2010 Citizens United ruling opened the door to unlimited corporate and union spending on elections, to super PACs and to hundreds of millions of dollars in anonymous money.
In Crossroads’ application for nonprofit status in 2010, the group told the IRS that while it planned to spend money on elections, “any such activity will be limited in amount, and will not constitute the organization’s primary purpose.”
In the 2012 cycle, Crossroads told the Federal Election Commission it spent almost twice as much on political ads as the next most active social welfare nonprofit, Americans for Prosperity, backed by conservative billionaire brothers Charles and David Koch.
Crossroads is in the crosshairs of campaign finance watchdogs, who have criticized social welfare nonprofits for exploiting loopholes in tax and election rules to be able to pour millions from undisclosed donors into campaigns. Democrats have also targeted Crossroads for special attention. In 2012, the lawyer for President Barack Obama’s reelection campaign asked the FEC to force Crossroads to register as a political committee and disclose its donors. (So far, that hasn’t happened.)
“There is no way in the world that $20 million-plus contributions, $10 million-plus contributions, that are funding campaign ads should be kept secret from the American people,” said Fred Wertheimer, the president of Democracy 21, who has worked to rein in outside spending in politics for decades.
Social welfare nonprofits are allowed to spend money on elections, but they are also supposed to be able to prove that social welfare is their primary purpose. ProPublica has focused extensively on how many of these groups have poured much of their resources into political races.
Tax returns are one of the few places in which groups are required to detail both their revenues and expenditures and justify their social welfare mission. But the returns are often filed more than a year after an election.
About 150 of these nonprofits reported spending more than $254 million in 2012 on ads, phone calls and mailings. Most of that money — more than 85 percent — was spent by conservative groups.
Crossroads GPS and its sister super PAC, American Crossroads, provide a blueprint of how these outside-spending groups work. The Rove juggernaut gives potential donors the option of giving to a super PAC, which has to report its donors, or to a social welfare nonprofit, which doesn’t.
Some people and corporations prefer the anonymous option. American Crossroads, for instance, raised about $117.5 million in the 2012 cycle, according to the FEC, as opposed to the $180 million Crossroads GPS collected.
Both super PACs and social welfare nonprofits can accept unlimited contributions, unlike candidates and regular political action committees.
The Wall Street Journal first reported an early look at Crossroads GPS’s tax return last Thursday. (ProPublica initially asked for a copy of the group’s tax return on Thursday morning, but Jonathan Collegio, the group’s spokesman, said, “It’s not available yet.” He also said it wasn’t available on Friday, the deadline for filing the return. On Monday, Collegio said the return was available for pickup.)
In a cover letter accompanying the tax filing, Collegio positioned the group as a balance to unions and other liberal groups. “Crossroads GPS serves as a counterweight to well-funded labor unions and other far-left advocacy groups that promote more government, more regulation and higher taxes,” Collegio wrote.
He also pointed out that the group didn’t just get big contributions. It also had 1,254 small donors, who gave less than $5,000 each. (That works out to $348,361, or .2 percent of Crossroads total revenue.)
On its tax return, Crossroads justified its social welfare mission in part by saying it spent more than $74 million on public communication and building “grassroots to influence policymaking outcomes through grassroots mobilization and advocacy.” It also said it spent more than $3.2 million on research and handed out more than $35 million in grants, mainly to similarly aligned social welfare nonprofits active in politics.
Of those grants, Crossroads gave $26.4 million to Americans for Tax Reform, and $2.15 million to the Center for Individual Freedom. It told the IRS that these grants were not supposed to be spent on elections.
In the group’s statement, Collegio said the group had a ratio of 60.2 percent of social welfare spending to 38.8 percent of political spending in 2012. (It is not clear where the missing 1 percent went.)
Most of those ads stopped short of telling people how to vote and didn’t need to be reported to the FEC.
The IRS says it considers an ad to be political simply if it seems aimed at influencing an election, not just because of when it runs. But so far, despite promises to crack down on social welfare nonprofits engaged in too much political activity, the IRS has taken a hands-off approach to the groups. Its most significant enforcement action so far has been to deny the recognition of one small Democratic group and its affiliates in 2011.
In May, a scandal erupted over the IRS targeting the applications of conservative Tea Party groups for extra review, and since then, it’s not clear how — or if — the agency is going to tackle the highly charged issue. The battle will soon move to the courts. In August, Democracy 21, Public Citizen, the Campaign Legal Center and Rep. Chris Van Hollen, a Maryland Democrat, filed a federal lawsuit aiming to force the IRS to block social welfare groups from engaging in overt campaign spending.
There is another potential hurdle for Crossroads GPS. As of this month, according to the IRS website, the agency hasn’t yet recognized the tax-exempt status of Crossroads, which applied for recognition in September 2010. That’s a longer wait than faced by any of the major politically active social welfare nonprofits applying since the Citizens United decision.
Moneylife invoked Section 7 of the RTI Act to procure the safety audit report, after four young ad professionals of Pune died after their car plunged into Neera River. What we discovered was shocking
Four young ad professionals from Pune died in a horrendous tragedy on 2nd November when their car plunged into the Neera River through a dangerous gap left open at the tip of the bridge on the Mumbai-Bangalore Highway. However, the National Highway Authorities of India (NHAI) insisted that unless they get a safety audit report from their safety consultants, HAKS Engineers and Info Trans Engineers Pvt Ltd, they would not undertake safety repairs.
Moneylife invoked the RTI Act under Section 7, under which the applicant can get information within 48 hours, “Provided that where the information sought for concerns the life or liberty of a person, the same shall be provided within forty-eight hours of the receipt of the request.’’
The writer received the copy of the safety audit report on the afternoon of 19th November.
Shockingly, the ‘Inspection report on accident at Neera Bridge site’ puts the blame squarely on the driver stating that: “In spite of the warning signs and barricades, the accident has taken place. The opinion of the safety consultant is that the driver of the vehicle has ignored the warning signs. The accident occurred due to the driver’s fault and not due to the deficiency of the safety measures at the bridge site.’’
This is clearly an attempt by the safety consultants to protect and defend the NHAI and Reliance Infra despite their complete criminal negligence through shoddy and unsafe work on this stretch of the highway. Photographs published in Moneylife last week clearly show that Reliance had not protected the tip of the bridge with a crash barrier; the ‘work in progress’ signboard of the NHAI on the left is confusing to drivers, particularly at night.
After having squarely put the blame on the driver, the safety report recommends safety measures, which this writer through the Nav Bharat Nagarik Manch has been demanding. It states: “Cross wall connecting the abutments of the two bridges shall be raised above the ground level up to the height of the hand railings to avoid the entry of animal and human into the river by accident or mistake.’’
The wordings of this recommendation are highly objectionable as it trivialises the issue.
The second recommendation is: “Metal beam crash barriers shall be provided on the right edge of the carriageway to suitable length.’’
This is the very place where the car plunged into the Neera River. However, the safety consultant admits it, after having put the blame on the victims who can speak no more.
Nav Bharat Nagarik Manch had given the NHAI, seven days that is 26th November, to do the necessary repairs, or else agitate. It is also in the process of collecting information under RTI to file a public interest litigation (PIL), on the 140 km stretch of this highway, which runs through Maharashtra and is being built, maintained and operated by Reliance Infra.
The contract agreement procured by Moneylife shows that it is mandatory for the Reliance Infra to check the road conditions in terms of passenger safety and traffic signboards every seven days and it is incumbent on the NHAI to monitor the work of the contracting agency.
Following are some of the points in the Contract Agreement:
*that the traffic worthiness and safety are at no time inferior and that the worthiness of the road should be checked every 7 days
* For the avoidance of doubt, it is agreed that the Concessionaire shall at all times be responsible for ensuring safe operation of the Project Highway
* The independent Engineer shall inspect the Project Highway at least once a month and make a report of such inspection (the "Inspection Report") stating in reasonable detail the defects or deficiencies
*Upon recommendation of the Independent Engineer to this effect, the Authority may by notice require the Concessionaire to suspend forthwith the whole or any part of the Construction Works if, in the reasonable opinion of the Authority, such work threatens the safety of the Users and pedestrians.
The obligations of the Concessionaire (in this case Reliance Infra) hereunder shall include:
(a) permitting safe, smooth and uninterrupted flow of traffic on the Project Highway during normal operating conditions;
(d) carrying out periodic preventive maintenance of the Project Highway;
(e) undertaking routine maintenance including prompt repairs of potholes, cracks, joints, drains, embankments, structures, pavement markings, lighting, road signs and other traffic control devices;
(f) undertaking major maintenance such as resurfacing of pavements, repairs to structures, and repairs and refurbishment of tolling system and other equipment;
(i) operation and maintenance of all communication, control and administrative systems necessary for the efficient operation of the Project Highway;
(k) maintaining a public relations unit to interface with and attend to suggestions from the Users, government agencies, media and agencies; and
(I) complying with Safety Requirements.
The NHAI and Reliance are also bound by the NHAI’s Safety Manual as well as Citizen Charter besides the contract agreement. Both are flouting all norms at the expense of innocent lives being snuffed out. As per the information procured from the Rajgad Police Station by the writer, in the 29 km stretch between Katraj tunnel and the Neera Bridge, there have been 174 deaths and 111 serious injuries from January 2011 to 31 October 2013.
Strangely, the safety report does not have a dateline of when it has submitted the report to the NHAI though it says that inspection took place on 12 November 2013. The inspection report does not even give any timeline to conduct the necessary repairs. So, is this all just a farce?
(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
NSE Nifty may come down to 6,160, before moving higher
In a sideways session, a contrast to yesterday’s, Nifty and Sensex seesawed through Tuesday. The markets opened strong and managed to stay in the green for almost the entire period. Sometime after mid-day, the markets dipped into the red, only for a short time. Bulls hungrily bought the dip and pushed the market higher again. After that, it was back to what happened in the morning—a choppy sideways move.
The Sensex opened at 20,870 and hit a high of 20,934 soon after. Then it trended down to a low of 20,828 before rebounding to end the day at 20,890 (up 40.08 points or 0.19%). Similarly, the Nifty opened at 6,197, hit a high of 6,212, then trended down to the intra-day low of 6,180 before closing at 6,203. (up 14 points or 0.23%).
Except for pharma, FMCG, media and public sector enterprises, all sectoral indices were in the green.
Of the 50 stocks on the Nifty, 24 ended in the green, implying that the strength is not broad-based. The top five gainers were Hindalco (4.33%); Jindal Steel (4.00%); PNB (3.93%); JP Associates (3.11%) and State Bank of India (3.04%). The top five losers were BPCL (-2.11%); Sesa Sterlite (-1.78%); Power Grid (-1.40%); HDFC Bank (-1.28%) and Tata Steel (-1.22%).
Of the 1,229 stocks on the NSE, 591 rose, 573 fell while 65 remained unchanged.
According to CLSA, an investment firm, fixed investment to GDP has declined over the years, indicating that fewer enterprises are investing back into the economy, in terms of manufacturing and capital expansion. This is not a very promising sign. At the same time, the government announced no plans to remove short term capital gains tax on FIIs, because of their desperation for foreign capital to shore up current account deficit.
Except for Taiwan, Korea and India, all Asian markets were trending down. All markets in Europe were in the red as well.
Meanwhile in the United States, the markets reacted late in the session with a sharp sell-off after Carl Icahn, activist investor, said that the markets would drop sharply soon. He said that price gains had outpaced the underlying improvement in the global economy. Earlier, S&P went above 1,800, a psychological milestone while Dow Jones passed 16,000 for the first time. The US futures were seen trading down during early trade.