Wednesday, August 25, 2010

Democrats file ethics complaint against Blunt, Rove organization

The Missouri Democratic Party filed an ethics complaint today alleging that the accompanying video, with Karl Rove endorsing Roy Blunt for U. S. Senate violated FEC regulations.

A portion of the party news release is reprinted below:
"It is one thing for Karl Rove and Congressman Blunt to use their shady out-of-state political tricks to try and deceive Missourians,” said Missouri Democratic Party Communications Director Ryan Hobart. "It is absolutely unacceptable for Congressman Blunt and Karl Rove to try and find a backdoor to let out-of-state Big Oil and special interest cash fund inappropriate political attack ads here in Missouri."
Congressman Blunt recently brought Karl Rove out to Missouri for an elite special interest fundraiser. During his time in Missouri, Karl Rove recorded a web ad for Blunt - paid for by the Blunt campaign.  Rove’s web ad was focused on health care – the very same issue that his front-group, American Crossroads, is now spending nearly $1 million on in TV ads across the state. [Kansas City Star, 11/30/02; CQ Today, 8/31/04; Real Clear Politics, 7/1/10]

Karl Rove founded American Crossroads and he has been actively raising funds for the organization, and because Congressman Blunt and Karl Rove continue to maintain their close political ties the Missouri Democratic Party believes there was coordination between the two individuals that could violate federal law.  It has been reported that Blunt and Rove spoke about political strategy on a weekly basis when Congressman Blunt was in the GOP leadership and Rove served in the White House. [Politico, 5/20/10; New York Times, 5/23/10; Kansas City Star, 11/30/02]

The complaint reads as follows:

Roy Blunt is a candidate for the United States Senate in Missouri. Crossroads Grassroots Policy Strategies ("Crossroads GPS") is a corporation that incorporated under the laws of Virginia on June 2, 2010, and that is tax exempt under section 501(c)(4) of the Internal Revenue Code. It is a spin-off group of American Crossroads, a political committee that is registered with the FEC.1 According to multiple news sources, American Crossroads was founded by Karl Rove, and Rove has been active in raising funds for the organization. See National Journal. 4/22/10; Politico, 5/20/10; New York Times, 5/23/10 (identifying American Crossroads as Rove's"Brainchild"); Washington Post, 6/1/10; Politico, 7/20/10. Crossroads GPS was established as a spin-off group to permit large donors to contribute to it without having their identities disclosed to the IRS or FEC. Politico, 7/20/10. Rove is reported to have held a meeting at his home for American Crossroads and other outside groups that included a legal briefing about the FEC's coordination rules. National Journal, 4/22/10.

Blunt and Rove's close relationship is well documented. During former-President Bush's first presidential campaign, Blunt worked closely with Rove, and spoke with then-Governor Bush, Rove, or the campaign's political director at least three times a week. Roll Call, 5/6/99. In
2002, the press reported that Blunt and Rove "regularly" had breakfast together, and in 2004, Blunt noted that he and Rove had breakfast "almost every week." Kansas City Star, 11/30/02; CQ Today, 8/31/04.

Now that Blunt is a candidate for Senate, Rove has been actively supporting his old friend. On June 28, 2010, Rove traveled to Missouri to headline two fundraisers for Blunt, a breakfast in St. Charles and a luncheon in Springfield. Politico, 6/24/10; St. Louis Post- Dispatch, 6/25/10; Kansas City Star, 6/25/10. While in the state, Rove recorded a web-video that was posted to YouTube on June 29. In that video, Rove states:

'Hi, it's Karl Rove, former White House aide. I'm out campaigning for Roy Blunt because there's a sharp clear difference between he and his Democrat opponent. Roy will be a strong voice for conservative values, for the values of Missouri, and will fight the Obama agenda when he thinks the president's wrong. His prospective democratic opponent on the other hand, she would go along with everything that the president wants and she shows no independence from him whatsoever and her reluctance to stand up and fight for the things that Missouri believes in. Roy's been a leader in fighting the Obama agenda on healthcare and fighting the Obama stimulus package. He was a leader in making certain Republicans stood up and fought against the cap and trade bill that would've raised taxes and would've taxed energy use by every person in the state of Missouri and all across the country and cost us jobs. It's really vital that we elect this good man to the United States Senate and your contribution and your active support are important. Thank you'

At the end of the video, the video states that it is "Paid for and authorized by Friends of Roy Blunt."2
On August 21, 2010, Crossroads GPS began airing an advertisement attacking Blunt's opponent, Robin Carnahan, for supporting healthcare reform.3

1. Legal Background

The Act limits the amount of money that any person may contribute to Federal candidates and political committees. 2 U.S.C. § 441a(a). It is illegal for anybody to contribute, and for any candidate to receive, contributions to candidates in excess of $2,400 per election. Id. The Act
also prohibits corporations from making contributions or expenditures in connection with Federal elections. 2 U.S.C. § 441b(a).

Federal campaign finance law treats coordinated expenditures by a non-party, noncandidate sponsor as in-kind contributions to the candidate or political party with whom they were coordinated. See 2 U.S.C. § 441a(a)(7)(B)(i)-(ii); 11 C.F.R. § 109.21(b). An ad is a "coordinated communication" if it is paid for by a person other than the candidate and it satisfies a content standard and a conduct standard. The content standard is met if, inter alia, a public communication references a Senate candidate and is publicly disseminated in the candidate's
jurisdiction 90 days or fewer before the candidate's election. 11 C.F.R. § 109.21(c)(4)(i). The conduct standard is met if the candidate requested or suggested the ad; if the candidate or party was materially involved in decisions about it; if the candidate or party and the sponsor had substantial discussions in which information material to the ad was conveyed; or if a former candidate or party employee, consultant, or common vendor used candidate or party information in producing the ad for the sponsor. See id. § 109.21(d).

2. Crossroads GPS May Have Made, and Blunt May Have Accepted, an Illegal In-Kind Contribution

The Commission should investigate whether the ad is a "coordinated communication" under Commission rules. The ad indicates that it was "Paid for by Crossroads Grassroots Policy Strategies." It also meets the content prong: it is a public communication that clearly identifies
Blunt's opponent and it is broadcast in Missouri during the 90 days before the 2010 general election.

There is strong evidence that Crossroads GPS's advertisement was coordinated with Blunt. News accounts closely tie Rove to American Crossroads and Crossroads GPS, identifying him as a founder and advisor. Meanwhile, there is extensive evidence of close ties between
Rove and Blunt. Blunt and Rove's relationship extends back to at least 1999. Blunt worked closely with Rove during the 2000 presidential election, and in the years since, they have had breakfast together "regularly" and "almost every week." Kansas City Star, 11/30/02; CQ Today, 8/31/04.

Further, Rove has been active in supporting Blunt's campaign. In June 2010, the same month Crossroads GPS was created and less than 2 months before Crossroads GPS launched its ad, Rove traveled to Missouri to campaign for Blunt. He headlined two fundraisers for Blunt and recorded a web video for Blunt's campaign that was "paid for by" Blunt's campaign. In particular, the web video tout's Blunt's opposition to health care reform – just as the video attacks his opponent's support of it.

In recording the video, Rove would have learned valuable information about the Blunt campaign's messaging. And, given Rove's close relationship with Blunt, it is likely that the two had additional discussions of the campaign's plans, projects, activities, and needs. Further, given Rove's intimate and well-publicized role in the organization, it is unlikely that the Crossroads GPS created and aired the ad without Rove's involvement. Thus, there is strong evidence that the ad also meets the Commission's conduct prong.

Assuming that there was coordination, Blunt and Crossroads GPS violated 2 U.S.C. § 441a and 441b: Crossroads GPS knowingly made, and Blunt knowingly accepted, prohibited corporate contributions well in excess of $2,400. The FEC should also investigate whether this
violation was knowing and willful – as one news report indicated, Rove himself sponsored a briefing for American Crossroads that covered the FEC's coordination rules, so Rove should have been aware of the prohibition against coordination.

4. Crossroads GPS May Have Failed to Register as a Political Committee with the FEC

Any political committee that makes expenditures aggregating in excess of $1,000 during a calendar year must file a statement of organization with the FEC. 2 U.S.C. §§ 431(4), 433. If the ad was coordinated with Blunt, Crossroads GPS would have made an expenditure well in
excess of $1,000 and, thus, would have been required to register as a political committee. It failed to do so.

5. Blunt and Crossroads GPS May Have Failed to Properly Report Coordinated Communications

Political committees must report all expenditures to the Commission. 2 U.S.C. § 434. Candidates and their authorized committees must report coordinated communications made on their behalf to the FEC as both expenditures and receipts. 11 C.F.R. § 109.21(b)(3). Political
committees that make coordinated communications must report these as both contributions and expenditures. Id.

Assuming that the ad was coordinated with Blunt, Blunt would be obligated to report the cost of the expenditure as a receipt and as an expenditure, and Crossroads GPS would be obligated to report the communication as a contribution and an expenditure. The Commission
should investigate to see if respondents report the advertisement as required by law.


As we have shown, there is substantial evidence that Respondents have violated the Federal Election Campaign Act. We respectfully request the Commission to investigate these violations, including whether they were knowing and willful. Should the Commission determine
that Respondents have violated FECA, we request that Respondents be enjoined from further violations and be fined the maximum amount permitted by law.

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