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Karl Rove group spends big in Election 2010, but is it legal?

GOP strategist Karl Rove is sending big money to Republicans in close Election 2010 races. But two campaign watchdogs are asking the IRS to investigate his tax-exempt 'social welfare' group.

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"While the abuses of 501(c)(4) tax designation for no-fingerprint political attack ads seems rampant in this election cycle, the most blatant certainly appears to be Crossroads GPS," said J. Gerald Hebert, executive director of the Campaign Legal Center, in a statement. "The group makes almost no effort at all to hide the fact that it was created principally to impact the 2010 elections, and to take money from those interested in contributing to their efforts but doing so anonymously."

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In the 2004 election, those same groups went after several pro-Democratic 527 groups for violating campaign-finance laws. But this time around, most of the complaining is from Democrats, who haven’t kept pace with the GOP when it comes to spending by third-party groups – often the largest and most important spending in an election, since it has fewer restrictions. They say that Rove’s group is just the most prominent of a growing number of pro-Republican groups that are operating improperly, and allowing too much influence from anonymous donors.

Compounding the issue is the Supreme Court’s “Citizens United” decision, which paved the way for corporations and unions to give unlimited amounts of money to such groups.

A Washington Post story yesterday reported that interest groups are spending five times as much as they did in the last midterm election, and that more than half of it is coming from undisclosed donors, compared with less than 10 percent in the 2006 election.

A spokesperson for Crossroads GPS called the allegations “baseless,” and noted that liberal groups also spend plenty of “undisclosed campaign money.”

The most recent media buy by the Crossroads groups is targeting Senate races in Colorado, Florida, Illinois, Kentucky, Missouri, Nevada, Pennsylvania and Washington. And more is likely to come. Rove and Gillespie set a goal of raising $50 million – between both groups – by the election.

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