527 group helps GOP catch up in money race

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In a campaign season of anti-establishment ferment, some of the Republican Party’s best-known insiders are building an ambitious fundraising machine for the fall elections and beyond.

They started with a bang in April, cashing a $1 million check from a Texas oil magnate. After a quiet May, friends and foes are watching to see whether the new organization’s core group, American Crossroads, can reach its goal of raising $52 million by November.

Karl Rove, President George W. Bush’s top political strategist, and Ed Gillespie, a former Republican Party chairman and White House aide, modeled their network on successful organizations created by Democrats several years ago.

American Crossroads is a 527 organization - named for a section in the tax law - that is exempt from limits on campaign fundraising and spending that apply to party-affiliated groups. It can tap rich conservatives, such as Trevor Rees-Jones, president of Dallas-based Chief Oil & Gas LLC, who chipped in the first $1 million.

But eyebrows were raised - and liberal snickering was heard - when the group filed its next monthly report with the Internal Revenue Service, showing only $200 raised in May.

Steven Law, a former U.S. Chamber of Commerce attorney and now president of American Crossroads, said the group has about $30 million in pledges that Mr. Rove, Mr. Gillespie and others secured during recent trips to various cities.

“We feel very good about the progress we’ve made,” Mr. Law said, predicting a strong fundraising report for June.

He said the idea for American Crossroads grew from talks last fall involving Mr. Rove, Mr. Gillespie and other conservatives who feel liberals outhustled the GOP after the McCain-Feingold campaign finance law in 2002 and subsequent court rulings set new limits - and opportunities - for political activities.

The goal, Mr. Law said, is to build “an enduring and robust outside organization that can, in the long run, compete with the very successful groups the Democrats have built.”

Pro-Democratic groups include Moveon.org, Democracy Alliance - founded by liberal billionaire George Soros - and Democracy Corps, founded by Democratic strategists James Carville and Stanley Greenberg.

Conservatives are hardly strangers to 527 groups, which must act independently of candidates and their official campaigns. The organizations are exempt from paying taxes, but donations to 527 groups are not tax-exempt.

In 2004, a 527 group called Swift Boat Veterans for Truth drew wide attention and Democratic complaints with ads attacking Sen. John Kerry’s Vietnam War record, damaging the Massachusetts Democrat’s bid to oust Mr. Bush.

American Crossroads undoubtedly will rile Democrats, but its founders and leaders are mainstream, well-regarded Republicans with experience in the White House, Congress and national campaigns.

Four affiliated political groups, some of them several years old, are working closely with American Crossroads. They don’t hesitate to say they are trying to catch up with Democratic rivals.

The blue-chip pedigrees of the groups’ leaders may seem somewhat at odds with the anti-establishment energy coursing through conservative communities. Led by the “tea party” movement, the insurgent fervor already has cost a Republican senator and two House members their seats in party primaries.

American Crossroads, however, seems to have no qualms about backing tea party favorites. Among its first actions was spending $360,000 on TV ads in Nevada criticizing Senate Majority Leader Harry Reid, who faces tea party-backed Republican state lawmaker Sharron Angle this fall.

Mr. Law said his group also will try to oust Democratic senators in Arkansas, Colorado and Washington state, and to help Republicans win open Senate seats in Florida, Illinois, Kentucky, Missouri, New Hampshire, Ohio and Pennsylvania. He said American Crossroads will get involved in about a dozen House races.

Buying TV attack ads is the splashiest way for a 527 group to draw attention. But many GOP operatives hope American Crossroads will spend heavily on voter-turnout efforts, an area where they feel Democrats and their labor union allies have excelled.

Mr. Law said his group will engage in “the full range of political activity,” including advertising, mail, phone banks and get-out-the-vote efforts.

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