Under the U.S. Supreme Court: Karl Rove's efforts go down in flames

By MICHAEL KIRKLAND, UPI Senior Legal Affairs Correspondent  |  Nov. 11, 2012 at 6:01 AM
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WASHINGTON, Nov. 11 (UPI) -- The real loser last week on Election Day appears to be Karl Rove, who now has to explain to his shadowy billionaire donors how he spent hundreds of millions of dollars in "independent" expenditures on Mitt Romney's behalf and came up a cropper.

Two groups associated with Rove and fellow Republican operative Ed Gillespie spent more than $175 million in 2012 alone to promote Romney and other conservative candidates, OpenSecrets.org reported.

If a wave of Republicans, particularly Romney, had been elected, Rove would have been seen as a GOP hero and a major voice in the party for years to come. Instead, political watchdogs report, his high-flying efforts went down in flames.

The OpenSecrets blog, part of the non-partisan Center for Responsive Politics operating out of Washington, called Rove's American Crossroads and Crossroads GPS the "heavy hitters" of about 245 outside spenders.

The Center for Public Integrity, an investigative journalism non-profit operating out of Washington, said last week more than $1 billion was spent by outside groups by Election Day.

"Of all outside spending in the 2012 election, more than $450 million was dedicated to the presidential election with more than $350 million spent helping Romney and about $100 million spent to help President Barack Obama," the center reported on its website.

All this lavish outside spending is possible, of course, because of the 2010 U.S. Supreme Court decision in Citizens United vs. Federal Election Commission. The 5-4 ruling lifted restrictions on corporate and union donors for "independent electioneering expenditures."

Two months later, using the principles outlined in Citizens United, a federal appeals court in Washington ruled in Speechnow.org vs. FEC that PACs, or political action committees, that did not make direct campaign contributions or donate to other PACs could accept unlimited contributions from corporations, unions and individuals.

Theoretically, outside donors were not supposed to coordinate their spending with political campaigns, who had to operate using direct contributions subject to regulation by the Federal Election Commission. And though unions were included in the ruling, their efforts have been swamped by corporate executives contributing money from corporate treasuries to super PACS and to secretive 501(c)(4) organizations -- named for the section of the Tax Code that allows their existence.

American Crossroads is a super PAC. But Crossroads GPS (Grassroots Policy Strategies) is a non-profit 501(c)(4) organization that doesn't have to report contributions or contributors to the FEC, unlike super PACS or the individual campaigns.

These 501(c)(4) groups are supposed to be "civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare," Tax Code regulations say, "or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational or recreational purposes."

Crossroads GPS has 100 donors, all of them secret.

Among others, Crossroads GPS sponsored anti-Obama ads and robo-calls by Clint Eastwood.

The New York Times said their secrecy allows corporations to donate money to 501(c)(4) groups like Crossroads GPS while "shielding corporate contributors from shareholders or others unhappy with their political positions."

The two Rove groups have been active since Citizens United was handed down at the Supreme Court. The Center for Responsive Politics reported the two groups raised $123 million from 2010 through the end of 2011, but the lion's share, $76.8 million, went to the non-profit.

This year, the super PAC American Crossroads made more than $104.7 million in "independent expenditures." The non-profit inscrutable Crossroads GPS laid out nearly $71 million in post-Citizen United spending.

But the Sunlight Foundation, a non-profit designed to promote political funding transparency, said the Rove organizations did not get much bang for the bucks, to say the least.

Of the nearly $103.6 million spent in the general election by American Crossroads, only 1.29 percent "ended in the desired result," a Sunlight report said. The organization supported no winning candidates.

For Grassroots GPS, the figures are somewhat better.

About 14.4 percent of the non-profit's nearly $71 million spent in the 2012 general election "ended in the desired result," Sunlight reported. None of the candidates supported by the organization won election. The 14.4 percent went to successfully defeating seven candidates.

The results were so miserable that instead of presiding over a triumphant Election Night, Rove squabbled on air with Fox News over the network's calling, correctly, Ohio and the election for President Obama. And now that his efforts have proved so futile, Rove's political enemies are moving in, circling like leopards around an injured water buffalo.

Major media carried a number of stories last week celebrating Rove's at least temporary political demise.

U.S. Sen. Chuck Schumer, D-N.Y., mocked Rove Thursday for his failure to deliver both a promised Senate majority and the White House to Republicans, Politico reported.

Schumer told reporters at a Christian Science Monitor breakfast: "Karl Rove's reputation is going to take a significant hit. If Crossroads was the business and Karl Rove was the [chief executive officer], he'd be fired for getting a poor return for his investors."

Post-election, Rove had argued that his super PAC and 501 group helped hold down Obama's vote in crucial swing states -- even though they didn't deliver those states to Romney.

"I'm sure he went to [big conservative donors] Sheldon Adelson and to Harold Simmons and said, 'Put up these millions and [Obama will] win, but we'll decrease his margin,'" Schumer scoffed.

However, Rove may have a point. The Washington Post points out that Obama victory margins in 10 key states were slim.

In contrast to the Rove groups, Sunlight reported, the Republican and Democratic congressional committees had far more success, though in a negative way.

The Republican committee spent more than $64.65 million, of which 31.63 percent "ended in the desired result." The committee supported only one winning candidate, but successfully opposed 17 losing candidates.

The Democratic group spent more than $61.74 million, of which 39.17 percent "ended in the desired result." The group supported two successful candidates, and successfully opposed 28 losing candidates.

Another conservative potentate who may be licking his wounds post-Election Day is Adelson, chief executive of the Las Vegas Sands Corp. and, according to Forbes, the 12th richest American.

"Money can't buy happiness, nor can it buy an election, apparently," the Center for Public Integrity reported on its website. Adelson was the No. 1 super PAC contributor with more than $53 million and a direct beneficiary of the Speechnow.org ruling in Washington.

But he apparently backed a flotilla of losers.

Adelson was the top donor to the pro-Romney Restore Our Future super PAC, with $20 million in contributions, the center said. Sources told the New York Times in June Adelson had committed to contributing $10 million to Rove's secretive Grassroots GPS, but since that group does not have to report to the FEC, no one may ever know.

Besides Romney, the Jewish-American casino magnate backed losing candidates Connie Mack for the U.S. Senate from Florida, Allen West for the U.S. House from Florida, Joe Kyrillos for the U.S. Senate from New Jersey, Shmuley Boteach for the U.S. House from New Jersey, Newt Gingrich in the GOP presidential primary and David Dewhurst in the Republican primary for U.S. Senate from Texas.

Adelson, along with homebuilder Bob Perry, collectively contributed $2.5 million to Independence Virginia, the super PAC backing former Republican U.S. Sen. George Allen. But Allen's opponent, former Democratic Gov. Tim Kaine, won the Virginia seat with 52 percent of the vote.

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