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Karl Rove, American Crossroads and the Super PAC Democrats love to hate

By Jessica Yellin, Chief White House Correspondent
updated 1:46 PM EST, Tue January 24, 2012
STORY HIGHLIGHTS
  • Rove co-founded two groups focused on conservative issues and unseating Obama
  • American Crossroads is a public Super PAC, which has to disclose donors; and Crossroads GPS is private, and does not
  • Crossroads is run by a former Bush adviser, Steven Law

Washington (CNN) -- Forget Newt Gingrich and Mitt Romney. If there's one Republican who scares Democrats, it's Karl Rove.

Here's why.

American Crossroads and Crossroads GPS, the two groups he helped found, plan to raise $300 million this year to defeat President Obama, elect Republicans to Congress, and block the Democrats' agenda.

They already spent half a million dollars attacking the President's squeaky clean image with an ad about Solyndra and a voice-over that said "Mr. President we need jobs, not more Washington insider deals." That was in December, before the first Republican primary was held. Crossroads says they plan many more like it.

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Though Rove, President George W. Bush's top political adviser, is the best-known face of American Crossroads, he's a fundraiser and key strategic adviser but doesn't work there in any official capacity. The man who runs the Super PAC is Steven Law.

"This is a very split electorate, people are uncertain about where they're going to go. It's going to be a tough fight," Law, Bush's former Deputy Secretary of Labor, told CNN, "That's where groups like American Crossroads can play a very vital role in providing information that tips the balance one way or another."

We visited Law in Crossroads' offices just a few blocks from the White House. For a multi-million dollar outfit, their headquarters look surprisingly similar to a call center.

"Its kind of shockingly sparse really," laughs Law, who prides himself on his low overhead, "We have holes in the wall. Not a particularly high end kind of place."

But don't let that fool you. In 2010, public records show they spent $39 million on advertising and election communications. Their political director, however, says they actually spent $70 million between both groups. They are not required by law to disclose all their expenditures, so we may never know.

Their early campaigns had a mixed results, pouring millions into successful efforts to elect Republican Sens. Roy Blunt and Marco Rubio; and failed efforts to defeat Democratic Sens. Michael Bennet and Harry Reid.

Law says he's OK with that track record: "We tend to pick (races) where it's a real effort where it's tough to move the ball forward," said Law. "In the upcoming Presidential election, we think it's going to be tough."

According to Law, the groups are a counterbalance to the outside groups that bolster Democratic candidates.

"American Crossroads was conceived as an answer to the hundreds of millions of dollars that unions and MoveOn.org and other groups on the left have been spending for years to support Democrats," said Law. "We started American Crossroads because we thought there ought to be a way for us to try and level the playing field."

Representatives from both MoveOn.org and the labor unions vehemently object to the comparison, citing more rigorous disclosure rules for labor groups and the more democratic nature of the organizations.

Paul Seamus Ryan of the Campaign Legal Center says the Crossroads groups are fundamentally different because they amplify the voices of a very few, who are also very rich. He says an analogy would be a town hall meeting where "a billionaire gets a megaphone and gets to sit in the front row and the rest of us who can't afford to make million dollar donations to the political process we're all sitting in the back of the room trying to be heard."

Law thinks it's about time people who share his views got organized and pooled their money to be heard.

American Crossroads and Crossroads GPS are divided in two because one is public and one is private.

American Crossroads, the Super PAC, can raise unlimited amounts but have to declare their donors. Supporters who don't mind having their contributions made public give here. Some, like Texas builder Bob Perry, donated $7 million in 2010. But other donors wrote checks as small as $250.

This Super PAC can make hard-hitting, explicitly political ads. Like a July 2011 web-ad during the debt ceiling fight that mocked President Obama as "the Negotiator" with a parody voiceover that said "When things don't go his way, he'll say what it takes to scare a nation."

The private arm is Crossroads GPS, a 501c4 organization that doesn't have to disclose its donors. If you want to promote an agenda without any fingerprints you contribute here.

This group has to live by different rules. More than half of its ads can't be explicitly political. That means they have to promote a specific issue. It's a very fine line, for example, these ads can eviscerate President Obama as long as they attack him on a specific policy -- such as an ad that says "our country's got this huge debt. But Obama says raise taxes and keep spending more?...There's got to be a way to take away President Obama's blank check."

Crossroads GPS also doubles as something of a venture capital fund for organizations that support its policy goals. In 2010 it gave $4 million to Grover Norquists' Americans for Tax Reform -- now famous for the no taxes pledge -- and $3.7 million to the National Federation of Independent Business, which is leading the challenge to the President's health care law in the courts.

"We provide financing to them to do the issue work that they do very effectively," explains Law.

This makes Crossroads a hub for a growing network of organizations on the right.

That's troublesome to some Democrats, who are outraged by the apparent coordination with other outside spending groups.

They point to Carl Forti, the political director of American Crossroads. "Why doesn't the media expose Carl Forti?" more than one Democrat has asked. Forti, wears another hat, overseeing Mitt Romney's Super PAC, Restore Our Future. Some Democrats call this an obvious conflict of interest.

Law says not at all. "It's totally appropriate" for independent Super PACs to communicate. In fact, he says, coordinating with "other independent groups that are active on the center right" is "an important part of our model." The only prohibited activity is coordinating with the candidates and their staffs.

Law walked us into his conference room. "We regularly convene a luncheon (of outside groups) here."

For American Crossroads their main focus this year: defeating President Obama.

Law says they'll use the phones, mail, social media, and TV and -- something new -- they'll try to register people and get out the vote through online media.

"Obama has been in full-blown campaign mode since Labor Day," says Crossroads Communications Director Jonathan Collegio. "He's raising big money for this campaign. They're taking it very, very seriously. And there needs to be a counterbalance to that. And that's what we believe we're doing."

So, who are their secret donors and what do they want in return? "They're not interested in coming to Washington and hobnobbing with public officials," Law explains, adding. "They would like to see us advance the cause that you see in our advertisements and on our website and all our public materials."

Collegio says the people behind American Crossroads hope it becomes an enduring force. "There was always a desire to be a permanent fixture on the center right."

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