HispanicBusiness

The real loser last week on Election Day appears to be Karl Rove, who now has to explain to his shadowy billionaire donors how he spent hundreds of millions of dollars in "independent" expenditures on Mitt Romney's behalf and came up a cropper.

Two groups associated with Rove and fellow Republican operative Ed Gillespie spent more than $175 million in 2012 alone to promote Romney and other conservative candidates, OpenSecrets.org reported.

If a wave of Republicans, particularly Romney, had been elected, Rove would have been seen as a GOP hero and a major voice in the party for years to come. Instead, political watchdogs report, his high-flying efforts went down in flames.

The OpenSecrets blog, part of the non-partisan Center for Responsive Politics operating out of Washington, called Rove's American Crossroads and Crossroads GPS the "heavy hitters" of about 245 outside spenders.

The Center for Public Integrity, an investigative journalism non-profit operating out of Washington, said last week more than $1 billion was spent by outside groups by Election Day.

"Of all outside spending in the 2012 election, more than $450 million was dedicated to the presidential election with more than $350 million spent helping Romney and about $100 million spent to help President Barack Obama," the center reported on its website.

All this lavish outside spending is possible, of course, because of the 2010 U.S. Supreme Court decision in Citizens United vs. Federal Election Commission. The 5-4 ruling lifted restrictions on corporate and union donors for "independent electioneering expenditures."

Two months later, using the principles outlined in Citizens United, a federal appeals court in Washington ruled in Speechnow.org vs. FEC that PACs, or political action committees, that did not make direct campaign contributions or donate to other PACs could accept unlimited contributions from corporations, unions and individuals.

Theoretically, outside donors were not supposed to coordinate their spending with political campaigns, who had to operate using direct contributions subject to regulation by the Federal Election Commission. And though unions were included in the ruling, their efforts have been swamped by corporate executives contributing money from corporate treasuries to super PACS and to secretive 501(c)(4) organizations -- named for the section of the Tax Code that allows their existence.

American Crossroads is a super PAC. But Crossroads GPS (Grassroots Policy Strategies) is a non-profit 501(c)(4) organization that doesn't have to report contributions or contributors to the FEC, unlike super PACS or the individual campaigns.

These 501(c)(4) groups are supposed to be "civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare," Tax Code regulations say, "or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational or recreational purposes."

Crossroads GPS has 100 donors, all of them secret.

Among others, Crossroads GPS sponsored anti-Obama ads and robo-calls by Clint Eastwood.

The New York Times said their secrecy allows corporations to donate money to 501(c)(4) groups like Crossroads GPS while "shielding corporate contributors from shareholders or others unhappy with their political positions."