Crossroads GPS At Heart Of GOP's Lois Lerner Probe

Apr 9, 2014
Originally published on April 9, 2014 7:08 pm

Among the alleged crimes committed by Lois Lerner, the former IRS official at the heart of the tax agency's targeting of conservative groups: singling out Crossroads GPS, Karl Rove's nonprofit group that spent $165 million in the last election attacking Democrats and helping Republicans.

That's according to House Republicans pushing criminal charges against Lerner.

The House Ways and Means Committee met in closed-door session Wednesday to discuss three specific violations Republicans believe she committed while running the IRS's office that handles tax-exempt groups.

One charge is that she generally blocked tax-exempt status for conservative groups. A second is that she impeded investigations into the matter, and the third is that she may have disclosed confidential taxpayer information by using her personal email account while conducting IRS business.

But the only group specifically cited by the committee was Crossroads, which in 2012 was the so-called social welfare organization that spent the most on political activity.

"Ms. Lerner took it upon herself ... [to] direct both the Crossroads GPS's audit and a proposed denial for tax-exempt status," Chairman Dave Camp said during the closed-door session. "Ms. Lerner repeated these activities with other conservative groups but never left-leaning organizations which were also referred to the IRS."

At that moment, Camp was unaware that his microphone was still being carried live to news outlets.

Rove, a short time later, confirmed Camp's revelation.

"She led an effort to deny a 501(c)4 tax-exempt status to Crossroads GPS, subverting the IRS's own standards and procedures in order to harass a conservative group," he said on Fox News. "Lois Lerner picked us out of the crowd as a conservative advocacy group."

Camp and committee Republicans voted in favor of asking Attorney General Eric Holder to pursue criminal charges and made the Crossroads discussion public by releasing the 14-page letter to Holder and dozens of pages of supporting documents.

Lerner's lawyer, William Taylor, said she has done nothing wrong. "This is just another attempt by Republicans to vilify Ms. Lerner for political gain," he said in a statement, pointing out that Holder's Justice Department is already conducting an investigation into the matter.

Lerner first disclosed that the IRS had given extra scrutiny to Tea Party groups seeking tax-exempt status last May. She was forced to resign from the agency a short time later and has since been the subject of numerous congressional investigations.

Tax-exempt status is important for Crossroads and other politically oriented 501(c)4 groups not because it allows them to avoid paying taxes — any political group that spends all that it raises will avoid income taxes — but because it lets the group keep its donors' names secret. Some donors give money on the condition their names not be disclosed because they don't want their businesses to lose customers with differing political views.

Crossroads GPS, like other large tax-exempt groups, has been funded primarily by wealthy donors. An NPR analysis of its tax returns shows that $218 million of the $257 million the group has raised to date has come in donations of $1 million or more. One single donation in 2012 was $22.5 million, and another was $18 million.

Tax-exempt groups are allowed to engage in some political activity, as long as it does not become their primary purpose. Crossroads GPS reported spending $71 million directly on political activity, out of the $180 million it reported raising in 2012. The group spent an additional $94 million on ads that attacked President Obama and Democratic congressional candidates but did not specifically mention the election.

Crossroads GPS also donated $35 million to other nonprofit groups, including some that turned around and spent some of their money on political activity. The group, for instance, reported giving Grover Norquist's Americans for Tax Reform $26.4 million — an amount that makes up the vast majority of the $31 million Americans for Tax Reform reported raising in 2012. Americans for Tax Reform that year reported spending $15.8 million on political activity.

In all, groups that don't disclose their donors spent more than a quarter-billion dollars on direct political activity in the 2012 elections, with the overwhelming majority of that money coming from conservative groups trying to defeat Democrats.

Ways and Means Committee Democrats wanted to hold Tuesday's hearing in public, but Camp insisted on a closed-door session because they would be mentioning the name of a specific taxpayer, and disclosing that in public is illegal.

"It is a felony. Any release is a felony, and it's not whether you intended to do it, so I'm being very cautious," Camp said.

Three more minutes went by before he realized the meeting was still being carried live and ordered a pause so the feed could be stopped.

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