The Two Faces of Karl Rove
Is he a Traitor to American Values
| RICHARD M. SCAIFE | DICK ARMEY
| BOB BARR | GARY BAUER | DAN
PAT ROBERTSON | ADOLPH COORS | JAMES DOBSON | JERRY FALWELL
TOM DELAY | CHRISTIAN RECONSTRUCTIONISTS
Presented by The Religious Freedom Coalition of the Southeast
|Karl Rove is known as a
neo-conservative and has always supported a Conservative Christian position especially
when it comes to Church and State issues. It is apparent from the data collected,
that the first amendment is in danger from his past and future actions.
Upon calling his office in June 2002and asking about which religions he considers "real," we find that the religion of Hinduism, Judaism, Islam, Shintoism, and everything except Christianity "..aren't "Real" religions." What is a real religion, Mr. Rove? What you have been practicing? Read the following and remember: "By their Works may they be known."
Contains excerpts from several sources but primarily from an article in huffingtonpost.com on 5/25/2011 by Dan Froomkin
Karl Rove vs the IRS
WASHINGTON -- Top Republican political strategist Karl Rove's method of secretly funneling unlimited contributions from big donors was so hugely successful in the 2010 campaign that Democrats are now trying to copy it. But his model may yet end up backfiring spectacularly.
In one scenario, groups like Rove's Crossroads Grassroots Political Strategies could find themselves subject to massive fines, ranging as high as 35 to 70 percent of the money they received in secret donations.
In another scenario, their deep-pocket donors could be hit by a 35 percent tax on their contributions.
Rove may well have found a way around the nation's federal election laws. But now the key question is whether the Internal Revenue Service is willing to be assertive. Because if it is, then just like with Al Capone, it could be the IRS that gets him.
In Crossroads GPS's solicitations for money, the group describes itself as a tax-exempt 501(c)(4) organization, and due to a controversial loophole in federal campaign finance rules, the names of donors to those organizations do not have to be disclosed publicly.
But contrary to popular belief, Rove's group has not formally attained 501(c)(4) status. The group's application, requesting the IRS to classify it as a "social welfare" group, is still pending.
And while the designation is typically not much more than a formality -- organizations routinely call themselves (c)(4) groups before they've been formally approved -- tax and campaign finance experts contacted by The Huffington Post said the IRS could well deny Crossroads GPS's application.
IRS guidelines for 501(c)(4) status state that social welfare groups "must operate primarily to further the common good and general welfare of the people of the community" -- which "does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office."
Intervening in political campaigns isn't prohibited, it just can't be the primary activity.
Were Crossroads GPS denied its 501(c)(4) status, the organization could be on the hook for tens of millions of dollars in fines. And operating in secrecy would suddenly come with an enormous new price tag.
THE RISE OF 501(c)(4)s
In the 2010 cycle, Rove wasn't the only one to use a 501(c)(4) as a source of clandestine funds. A slew of other, mostly conservative, often interrelated groups did so as well, led by the Wall Street-backed American Action Network.
"If people look at what Crossroads did over the course of the last couple of years, that'll give them a good sense of our activity," said Bill Burton, a former aide to President Barack Obama and one of the co-founders of Priorities USA, a newly-formed Democratic 501(c)(4), in an interview with The Huffington Post last week.
Crossroads GPS spokesman Jonathan Collegio confidently insists that his group "is comfortably within the guidelines set out by the IRS" for social welfare groups. "GPS invested millions of dollars in social welfare issue advocacy advertising before the FEC's 60 day reporting window last summer," he said in an email.
And, Collegio added, "we've been one of the most heavily active issue advocacy organizations in Washington over the last six months."
But when it comes to defining political activities, the IRS doesn't engage in the same kind of legalistic hairsplitting that the Federal Election Commission does, and much of the spending Collegio puts on the non-political side of his group's ledger, the IRS might well decide does not belong there.
"Lots and lots of things that would not be considered 'express advocacy' by the FEC, the IRS would consider intervention in a political campaign," said Donald Tobin, a tax and campaign finance law expert at the Moritz College of Law.
TIPPING THE SCALE
To qualify as a legitimate 501(c)(4) organization, in its first fiscal year Crossroads GPS would need to have spent more on what the IRS considers non-political expenditures than on political ones, said Marcus S. Owens, a Washington lawyer who used to head the IRS division that oversees tax-exempt organizations.
"My guess is they haven't," he said.
And there's not enough time to take dramatic measures to restore the balance, either -- the group's first fiscal year ends on May 31.
Consider the numbers: Crossroads GPS dropped a whopping $17 million on campaign spending that it considered obligated to report to the FEC -- most of it on televised attack ads -- in the run-up to the November 2010 elections.
And while Collegio said the group raised a total of $43 million in 2010 -- leaving plenty available for other purposes -- there are few indications that it spent more than a fraction of that money on anything that, by IRS standards, is unrelated to campaigning.
Asked for examples of big-ticket expenditures that weren't election-related, Collegio came up short. Crossroads GPS made a $750,000 ad buy in March attacking public sector unions, and recently launched an anti-Obama wiki, he said. But all that only amounts to pocket change for the group.
Collegio also cited as unrelated to elections the $1 million Crossroads GPS spent to run an ad in California during August 2010, that called on Democratic Sen. Barbara Boxer "to stop the Medicare cuts." Boxer was facing reelection three months later.
"What Crossroads is going to argue is that these ads you're talking about are lobbying -- and lobbying is a social welfare purpose -- because they say in the tagline: 'Call Barbara Boxer,'" Tobin said. "But that is using federal election law jurisprudence, not tax jurisprudence."
The IRS, he said, takes a "fact and circumstances approach" to decide whether ads -- or groups -- are basically there to influence elections.
And the group's primary purpose really couldn't be clearer. Its own blog recently linked to a Wall Street Journal story in which Rove and fellow Republican strategist Ed Gillespie -- the co-founders of Crossroads GPS and its Super PAC twin American Crossroads -- announced that they're "raising $120 million in the effort to defeat President Barack Obama, win a GOP majority in the Senate and protect the party's grip on the House in the 2012 election."
"There's a good chance the IRS will deny the (c)(4) application," said Lloyd Mayer, who teaches tax law at the University of Notre Dame.
So what would the group do should it come to that? Collegio told The Huffington Post he was "not going to argue hypotheticals based on a tax expert's opinion." And he stuck to his guns, adding: "[t]he laws as they are set out by the FEC and IRS are clear, and Crossroads follows them closely."
MILLIONS IN PENALTIES
But without its 501(c)(4) status, the group would find itself in real trouble.
Experts say the most likely scenario is that the IRS would classify Crossroads GPS as a "527" organization instead.
Unlike 501(c)(4), Section 527 of the U.S. Code is specifically intended for organizations that are primarily engaged in political advocacy. It exempts them from taxes and allows unlimited donations from individuals and corporations. And, thanks to recent Supreme Court decisions, it no longer imposes any limits on what they can say in their ads.
But Section 527 also explicitly requires political groups to publicly disclose from whom they got their money and how they spent it.
Karl Sandstrom, a former FEC commissioner now at the Washington law firm of Perkins Coie, predicts that "the IRS would come in and say, 'you're not properly a (c)(4), all indications are that you're operating as a political organization. And political organizations have a responsibility to file regular reports with the IRS, and you failed to do so.'"
Suddenly in violation of those disclosure rules, the group would then be subject to a massive penalty, established in the statute as the maximum corporate tax rate (35 percent) times all the money that should have been disclosed but wasn't.
For Crossroads GPS, that turns out to be a lot.
"You would aggregate all donations that were not disclosed, and you would take that amount at 35 percent," said Tobin. If indeed the group took in $43 million in donations in 2010 alone, that would mean well over $15 million in penalties right there.
"In addition, the organization is also taxed on non-disclosed expenditures, so my reading of the statute would subject all expenditures that were not disclosed to the FEC to the 35 percent tax," Tobin said. So Crossroads GPS would also owe more than a third of however much it spent beyond the $17 million it has already reported.
In a twist sure to be frustrating to disclosure advocates, however, the group still would not have to disclose its donors' identities once it paid its fines. But that would be secrecy at a very high price, indeed.
The tax experts consulted by The Huffington Post say that another possible path exists for Crossroads GPS should it be denied its 501(c)(4) status: It could conceivably declare itself a regular, tax-paying corporation. But the group would arguably take a huge hit there, as well.
In that case, the company would potentially have to pay corporate income tax on all the money in took in as donations. And all those campaigns ads wouldn't be deductible, as they don't qualify as ordinary and necessary business expenses.
WAITING ON THE IRS
Why, then, is Collegio still so confident? And why, given these huge potential pitfalls, are political (c)(4)s the hottest thing in D.C.?
Because the IRS may be afraid of a fight.
"That's the issue here," said Mayer, the Notre Dame law professor. "Because usually when there are penalties -- especially of this magnitude, especially when you're dealing with an organization this politically sensitive -- the IRS blinks."
An IRS spokesman declined to comment for this story.
Mayer described what he considers a likely scenario: The IRS denies Rove's group its (c)(4) status, but ends up letting him off with just a slap on the wrist.
"The IRS can waive those penalties if they find that the failure was due to reasonable cause and not due to willful neglect," Mayer said. "And, of course, reasonable cause is all in the eye of the beholder."
"That would be the easy way out," he added.
Another possibility is that the IRS could just decide to let the issue drag out indefinitely, Mayer said. As it is, the earliest opportunity for decisive action may not be for almost another year.
Experts say that at this point, the IRS would be wise to hold off on any action until Crossroads GPS files it annual tax form, a Form 990. By law, that form has to include a lot of detailed information about donations and expenditures.
But Crossroads GPS will have four and a half months after the end of its fiscal year to file its taxes. That won't be until Oct. 15. And tax rules make it pretty easy to get extensions for as long as six months, or until mid-April 2012 -- still before the November elections, but not soon enough to stop the proliferation of copycats 501(c)(4)s.
The IRS is notoriously skittish about making political decisions, Mayer said.
"They will go after these (c)(4)s, but they may not have the stomach or the resources to fight a battle royale all the way to the Supreme Court." That's particularly the case if Rove's group fights back hard -- as it would be expected to do -- and accuses the IRS of trying to limit free speech, he said.
But this time around, the IRS could also face a lot of heat if it blinks -- not just if it doesn't.
This past fall, IRS Commissioner Doug Shulman was besieged with letters demanding that he enforce the (c)(4) rules.
Senate Finance Committee Chairman Max Baucus (D-Mont.) requested an investigation into the use of tax-exempt groups for political advocacy, generally speaking.
Sen. Dick Durbin (D-Ill.) sent a letter requesting an investigation of the tax status of Crossroads GPS and other groups like it.
And campaign finance reform groups Democracy 21 and the Campaign Legal Center called for an investigation of Crossroads GPS, in particular.
"If the IRS investigation establishes that the facts and circumstances show that Crossroads GPS is primarily engaged in participating or intervening in political campaigns," the letter from the reform groups said, "appropriate penalties should be imposed on the organization, including penalties that take into account the need to deter similar widespread violations from occurring in future elections."
THE COST OF GIVING
There have also been some signs lately that the IRS is getting a bit bolder in this area.
Last December, when it released its annual workplan, the IRS' Exempt Organizations Division noted its intention to broaden its historical historical concentration on 501(c)(3) organizations -- groups that are not only tax-exempt, but can accept tax-deductible contributions.
"Beginning in FY 2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations," the workplan said.
And during the last two weeks, media reports have disclosed that the IRS is examining what could be the first five of many cases in which taxpayers who donated large amounts of money to 501(c)(4)s failed to report them on their gift tax returns.
Gift taxes are not an issue for most people; gifts greater than $13,000 -- or $26,000 per couple -- don't need to be reported at all. And there is a $5 million lifetime exemption for gifts made after 2010.
But for the really big donors, especially those who give away several million dollars a year, the gift tax could result in a hefty assessment on some or all of their contributions. The gift tax rate is 35 percent this year. And unless Congress acts, it will jump to 55 percent in 2013, even as the lifetime exemption falls to $1 million.
The IRS insisted in a statement to reporters that the examinations were "not part of a broader effort looking at donations to 501(c)(4)s" but rather were initiated by career employees looking at non-filing of gift and estate tax returns.
But this could nevertheless be the tip of a very big iceberg. The examinations in the news were based on 2008 donations to (c)(4)s -- back when such groups were still severely limited in what sorts of campaign ads they could run.
The 2010 elections brought a huge infusion of campaign money, a good chunk of which is thought to have come from a handful of deep-pocket donors, such as the Koch brothers on the right, and George Soros on the left. For the IRS, cross-referencing those huge donations with gift tax filings would be the work of seconds. (Groups that don't disclose their donors publicly still have to report them to the IRS in a confidential section of their Form 990s.)
What it all comes down to is that, just as 501(c)(4)s weren't designed to enable non-disclosure of massive political spending, the gift tax may turn out to be an accidental -- but hugely effective -- enforcement mechanism.
By contrast, the gift tax issue wouldn't be an issue at all if donors hadn't tried to circumvent disclosure with (c)(4)s, as donations to 527 groups are, by statute, exempt from the gift tax.
"That's sort of one of the underlying themes here, that there is a potential cost to your anonymity," said Ofer Lion, a Los Angeles tax lawyer who represents tax-exempt organizations. "Your anonymity is currently worth 35 percent of your contribution," he said. "And 55 percent in 2013."
Dan Froomkin is senior Washington correspondent for The Huffington Post. You can send him an email, bookmark his page; subscribe to his RSS feed, follow him on Twitter, friend him on Facebook, and/or become a fan and get email alerts when he writes.
Did Karl Rove Blow a Spook's Cover? The White House Won't Say.
By Timothy Noah
Posted Tuesday, Sept. 16, 2003, at 4:59 PM PT
A minor flap has been brewing since syndicated columnist Robert Novak, citing "two senior administration officials," reported in July that Joseph C. Wilson IV was married to a Central Intelligence Agency specialist on "weapons of mass destruction" named Valerie Plame. Wilson is the former diplomat sent by the CIA last year to check out allegations that Iraq had purchased uranium from Niger. He caused the Bush administration no small embarrassment by stating, in a July 6 op-ed, that he'd reported "it was highly doubtful that any such transaction had ever taken place." Novak hasn't particularly supported the Iraq war, and his column essentially took Wilson's side. But the fact that Novak blew Plame's cover (in the course of relating that Wilson was sent at Plame's suggestion) gave The Nation's David Corn the opportunity to accuse the Bush administration of compromising national security, in violation of the Intelligence Identities Protection Act of 1982. Wilson wouldn't confirm that his wife works for the CIA, but he told Corn that if she did, then Naming her this way would have compromised every operation, every relationship, every network with which she had been associated in her entire career. This is the stuff of Kim Philby and Aldrich Ames.
The question of whether to investigate who in the Bush administration blew Plame's cover surfaced Aug. 21 at a forum about intelligence failures on Iraq held by Rep. Jay Inslee, a fervently anti-war Democrat. Wilson, who was present, had this to say: It's of keen interest to me to see whether or not we can get Karl Rove frog-marched out of the White House in handcuffs. And trust me, when I use that name, I measure my words. This appeared to be an unsubtle hint that Wilson knew one of the leakers to be Rove. Taking the bait, someone asked White House press spokesman Scott McClellan about it today:
Q: On the Robert Novak-Joseph Wilson situation, Novak reported earlier this year quoting "anonymous government sources" telling him that Wilson's wife was a CIA operative. Now, this is apparently a federal offense, to burn the cover [of] a CIA operative. Wilson now believes that the person who did this was Karl Rove. He's quoted from a speech last month as saying, "At the end of the day, it's of keen interest to me to see whether or not we can get Karl Rove frog-marched out of the White House in handcuffs." Did Karl Rove tell that"
A: I haven't heard that. That's just totally ridiculous. But we've already addressed this issue. If I could find out who anonymous people were, I would. I just said, it's totally ridiculous.
Q: But did Karl Rove do it?
A: I said, it's totally ridiculous.
Now, on one level, Chatterbox feels mildly sympathetic toward McClellan. White House etiquette prevented him from saying, "How the hell should I know? If Rove blew the cover of a CIA agent, do you suppose he'd be stupid enough to tell me about it?" And McClellan deserves points for not taking a leaf from his predecessor Ari Fleischer's playbook, which says that you should always deny damaging stuff well before you know whether it's true. But on another level, it's pretty unsettling that McClellan refuses to answer the question at all. Rove is, after all, the president's principal political adviser, a man so influential that a recent book about him was titled Bush's Brain. McClellan could have said something like, "I have a very hard time imagining that to be true, but if you like I'll ask him." But McClellan didn't say that. Maybe he finds all speculation about wacky national-security skullduggery repellant in light of his father's embarrassing new book alleging that Lyndon Johnson murdered John F. Kennedy. Or maybeâjust maybeMcClellan wonders himself whether Rove got a little overzealous.
Wilson, for his part, denied today that he ever accused Karl Rove. He told Chatterbox "Karl Rove" was simply a handy metonym for whatever two "senior administration officials" fingered Plame (correctly or falsely, Wilson still won't say). But Wilson's "I measure my words" comment at the Inslee forum suggests to Chatterbox that Wilson is now being coy about what he knows, or at least suspects, regarding Rove. Maybe it's time for somebody to ask Karl Rove himself whether he risked 10 years in jail in order to suggest that Wilson got his Niger assignment based on nepotism. And, perhaps, deliberately to punish Wilson by destroying his wife's career at the CIA. Rove is ruthless enough to have done so. The only real question is whether Bush's Brain is stupid enough. [Update, Sept. 28: The CIA having now asked the Justice Department to investigate, McClellan says "it is simply not true" that Rove leaked the information.]
Published on Tuesday, September 30, 2003 by Democracy Now!
Does A Felon Rove The White House?
by Amy Goodman and Jeremy Scahill
Allegations are swirling that Karl Rove, senior political adviser to President George W. Bush, may have committed a felony by blowing the cover of a CIA operative. CIA Director George Tenet has called on the Justice Department to
investigate but the White House said Monday that "President George W. Bush has no plans to ask his staff members whether they played a role." And what makes this story even more remarkable is how seriously the Bush family has viewed outing intelligence operatives in the past.
The man at the center of this firestorm is Joseph Wilson, the retired U.S. diplomat who debunked the White House's key evidence that Saddam Hussein was rebuilding his nuclear program.
Two weeks ago Democracy Now! aired Wilson's comments before a suburban Seattle audience that he believes Bush's closest aide, Karl Rove, told reporters that Wilson's wife was a CIA agent.
At the forum Wilson declared, "At the end of the day, it's of keen interest to me to see whether or not we can get Karl Rove frog-marched out of White House in handcuffs." Wilson added, "And trust me when I use that name, I measure my words." Wilson told Democracy Now!, "I have reason to believe that it was the political office that at a minimum confirmed it and the political office was Karl Rove.It was a reporter who told me it was Karl Rove and that's as far as I want to go right now."
The whole scandal began in July a week after Wilson went public in an op-ed piece in the New York Times saying he was the diplomat sent by the Bush Administration to Niger to investigate whether Saddam Hussein tried to buy uranium from the African country. His findings: the accusations were baseless.
Wilson was not alone. The US ambassador to Niger, Barbro Owens-Kirkpatrick, knew of the allegations of uranium sales to Iraq and had already debunked them in her reports back to Washington. Wilson's conclusions also coincided with those of Deputy Commander-in-Chief of the US Armed Forces four-star Marine Corps General, Carlton Fulford, who had also researched the matter on the ground in Niger. Wilson felt he had authoritatively debunked the Niger rumor and "the matter was settled."
But the lie refused to die. In January 2003, Bush made his famous 16 word line in his State of the Union address: "The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa."
In July, soon after Wilson blew the whistle in The New York Times, the White House was forced to admit that the accusation should not have been included in the State of the Union. A few days later, conservative columnist Robert Novak wrote a column in which he cited "two senior administration officials" and stated that Wilson's wife, Valerie Plame, was a CIA operative dealing with weapons of mass destruction. In an extensive interview on Democracy Now!, Wilson said that the outing of his wife as an alleged CIA operative and other attempts to discredit him "are clearly intended to intimidate others from coming forward."
But it's not just intimidation; it's a felony. Until now, a crime the Bush family has taken very seriously. According to Ray McGovern, a retired CIA analyst who worked under Bush Sr. at both the CIA and the White House, "The Intelligence Identities Protection Act was made draconian, it was made very, very specific, automatic penalties that would accrue to both officials and non-officials-anyone who knowingly disclosed the identity of a CIA agent or officer." The penalty: fines of up to $50,000 and imprisonment of up to 10 years.
Many believe the law was passed in direct response to former CIA agent Philip Agee's blowing the whistle on CIA dirty tricks in his book Inside the Company. George H.W. Bush, who was vice-president when the law was passed, said some of the criticism of the Agency ruined secret U.S. clandestine operations in foreign countries.
So seriously did the Bushes take the crime of exposing CIA operatives that Barbara Bush, in her memoirs, accused Agee of blowing the cover of the CIA Station Chief in Greece, Richard Welch, who was assassinated outside his Athens residence in 1975. Agee sued the former first lady and Mrs. Bush withdrew the statement from additional printings of her book. Still, at a celebration marking the fiftieth anniversary of the CIA, the elder Bush again singled out Agee in his remarks, calling him "a traitor to our country."
David MacMichael worked as a CIA analyst at the time the law was passed. He told Democracy Now!: "If former President Bush could define Philip Agee as a traitor for exposing the identities of serving intelligence officers, if his son's political advisor has done the same.it is a very serious felony under the current Act."
(If in fact it was Karl Rove who leaked or authorized the leak to Novak, it won't be the first time the two have worked in tandem. According to Esquire, in 1992, Rove was fired from the Bush Sr. presidential campaign for leaking a negative story. The difference is, whoever authorized this leak, committed a felony.)
Rather than investigating who in the administration committed this alleged felony, the White House spent months dodging reporters' questions. "I'm telling you flatly, that is not the way this White House operates.No one was certainly given any authority to do anything of that nature," declared White House spokesperson Scott McClellan, careful legalistic language. Neither Bush nor Ashcroft has publicly called for an investigation.
And Vice President Dick Cheney's only public comments on Joe Wilson have been when questioned on NBC's "Meet the Press" on Sept. 14, "I don't know Joe Wilson. I've never met Joe Wilson" and "I have no idea who hired him." Cheney's comments strain credulity. While technically he may have never met Wilson, the investigation into Niger was done at the request of the vice president's office. Surely, Mr. Cheney learned of this, if not before the request was made, then after, when, as the Washington Post revealed, Cheney traveled repeatedly to the CIA during 2002.
"This is not unusual. This is unprecedented," retired CIA analyst Ray McGovern told Democracy Now! "The Vice President of the United States never during [my] 27 years came out to the CIA headquarters for a working visit.. this is like inviting money-changers into the temple."
While Cheney may not know Wilson, there is little doubt he knows of him. When Cheney was helping run the Persian Gulf War, as secretary of defense, Wilson was one of the key players. As the acting US ambassador on the ground in Baghdad in the weeks leading up to the war, the White House consulted Wilson daily. In those weeks, he was the only open line of communication between Washington and Saddam Hussein. Cheney was the Secretary of Defense at the time and a key player in the day-to-day operations and intelligence gathering. Furthermore, Wilson was formally commended by the Bush administration for his bravery and heroism in the weeks leading up to the war. In that time, Wilson helped evacuate thousands of foreigners from Kuwait, negotiated the release of more than 120 American hostages and sheltered nearly 800 Americans in the embassy compound.
"Your courageous leadership during this period of great danger for American interests and American citizens has my admiration and respect. I salute, too, your skillful conduct of our tense dealings with the government of Iraq," President Bush wrote Wilson in a letter. "The courage and tenacity you have exhibited throughout this ordeal prove that you are the right person for the job."
Wilson says that he heard from people who were at meetings chaired by Bush in the lead up to the Gulf War, "When people would come up with an idea, George Bush would often lean forward and ask them, 'What does Joe Wilson say about that? What does Joe Wilson think about that?' So at the highest level of our government there was keen interest in knowing what the field was saying and Dick Cheney was probably at those meetings."
What's Cheney hiding? What's the White House hiding? There is a scandal brewing at 1600 Pennsylvania Avenue that if treated properly by the Department of Justice and elected officials could prove to be one of the clearest cases of documentable criminal conduct and blatant lies by an administration since Watergate and the Iran-Contra scandal.
Research assistance for this article was provided by producers Mike Burke and Sharif Abdel Kouddous of Democracy Now! a daily national grassroots radio/tv newshour.
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