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Upstart groups challenge Rove for GOP cash


A quiet but intense struggle over money and influence is roiling the Republican Party just as the 2014 election season is getting underway.

At least a dozen super PACs are setting up to back individual Republican candidates for the U.S. Senate, challenging the strategic and financial dominance that Karl Rove and the group he co-founded, American Crossroads, have enjoyed ever since the Supreme Court’s Citizens United decision in 2010 cleared the way for unlimited independent spending.

In wooing donors, the new groups — in states like Texas, Iowa, West Virginia and Louisiana — are exploiting Crossroads’ poor showing in 2012, when $300 million spent by the super PAC and a sister nonprofit group yielded few victories. Some are suggesting that Crossroads’ deep ties to the Republican establishment and recent clashes with conservative activists are a potential liability for Republican incumbents facing Tea Party challengers.

"Certainly I think there’s a level of frustration with the state of things in D.C.," said Randy Cubriel, an Austin lobbyist who formed Texans for a Conservative Majority, a new super PAC, to back Sen. John Cornyn. This year, the group reported raising $2 million from Texas homebuilder Bob J. Perry, one of Crossroads’ top donors during the 2012 cycle, who died in April.

"I think a group like ours, coming from the state, is probably a little more effective than some of the national groups," Cubriel said. "It’s not a one-size-fits-all thing."

In response, Steven J. Law, the president of Crossroads, and others have urged donors and other supporters to commit to Crossroads, according to Republicans involved in the discussions, emphasizing that the group will move more aggressively in this election cycle to establish local footprints in the states with big Senate races. The profusion of super PACs, they have argued, risks wasting advertising dollars and endangering Republican efforts to win control of the Senate.

The conflicts echo broader unease within Republican circles, as establishment figures like Rove seek to reassert their authority and expand the party’s appeal amid a searing internal assault from Tea Party-inspired conservatives.

In an interview, Law played down the conflict with other, nascent super PACs and said Crossroads was willing to work with other groups where it made sense. But he suggested that many of the new groups could find it difficult to attract donors and raise enough money.

"From our view, we want to work with people we can work with where we have the same standards and goals," Law said. "But as an organization, we have exacting standards when it comes to financial controls, fundraising commissions, media placement fees. And not every group can meet those standards."

The fragmentation threatens not only the position of Rove and Crossroads as the dominant Republican players in the world of outside spending, but also the hundreds of millions of dollars’ worth of business that has flowed from Crossroads to a small circle of consultants and advertising buyers. In 2012, those consultants — many of them sharing the same floor of an office building in Alexandria, Va. — handled much of the media and mail spending by the two Crossroads groups and Restore Our Future, a super PAC that spent $153 million to bolster Mitt Romney’s presidential campaign.

Law said Crossroads’ scale and its financial controls help maximize the amount of money that flows to actual advocacy. Because of the volume of advertising the Crossroads groups buy, they have been able to negotiate media buyers’ commissions down to 3 percent or less, far below the traditional rate.

Until recently, Crossroads’ deep ties to the Republican establishment were a source of authority and legitimacy, not controversy. Rove’s stature provided entree to prominent Republican donors around the country; Law and other officials there had long risumis with the party’s campaign committees, offering a kind of semiofficial imprimatur with donors and candidates.

But this year, Crossroads announced that it was financing a new effort, the Conservative Victory Project, to intervene in next year’s Republican primaries. Some conservative leaders accused Rove of trying to squelch anti-establishment candidates.

Now Crossroads appears to be testing a new approach. The group has stayed out of Kentucky, for example, where Sen. Mitch McConnell, the minority leader, is facing both a Tea Party challenger in the primary and a strong Democratic opponent. Instead, McConnell is backed by a new group called Kentuckians for Strong Leadership. Although it is legally separate from Crossroads, most of its cash came from Crossroads donors, Law sits on its board, and the two organizations share a treasurer.

Crossroads has lobbied to help set up similar groups in races where its brand may be less appealing to voters or donors, according to two Republicans with knowledge of the conversations. But Rove has grown so controversial among some conservatives, the Republicans said, that candidates worry that donors will not contribute to a super PAC if it is connected to Crossroads.

In West Virginia, Law warned supporters of Rep. Shelley Moore Capito, a Republican who is a top prospect to win a Senate seat next year, that if they formed their own super PAC, Capito would not be able to count on significant support from Crossroads, according to three people with knowledge of the discussions.

But some new super PACs are choosing to work instead with a broader array of ad buyers and consultants. In private meetings with potential donors and clients, their strategists criticize Crossroads for what they call a "cookie-cutter" approach to advertisements and messaging.

Many of the upstarts are being organized by former aides and longtime supporters of the Republican candidates, who argue that they will be the best stewards of their former bosses’ political interests.

"I am in a unique position," said Josh Robinson, a former chief of staff to Rep. Bill Cassidy, R-La., who is leading a super PAC to support Cassidy’s campaign for Senate. "I know the donors. I know his operation. I know how it’s put together."

Other consultants involved with the groups expressed a more specific concern: They are unwilling to let Rove and his colleagues decide which Senate candidates get the most support.

"You don’t want someone playing God above you saying: ‘You don’t need any more money in your race. You can win by a few less points,’" said a Republican involved in one of the races, who requested anonymity because he did not want to antagonize Rove.

Not all of the new groups appear to be at odds with the old guard, or poised to poach their donors. W.G. Champion Mitchell, a prominent North Carolina businessman, is leading a super PAC in his state to back Thom Tillis, speaker of the North Carolina House of Representatives who is a Republican candidate for the Senate.

Mitchell said he has since been in touch with Crossroads and that Tillis attended a Crossroads summit meeting in Washington in October.

"They seem to be happy to have us in the race," Mitchell said. The donors he was soliciting, Mitchell noted, were not traditional givers to out-of-state groups.

Yet some potential pitfalls for the new groups are evident. Because they are raising money chiefly from local donors, they may be more vulnerable to criticisms of pay-to-play. One of the groups, Grow NC Strong, has drawn scrutiny for raising large contributions from three donors, including Mitchell, who were appointed last spring to the University of North Carolina board of governors by a vote of the House.

Moreover, it is not always clear which groups have the blessing, informal or otherwise, of the candidates in whose name they were founded.

The West Main Street Values PAC, for example, was formed during the summer with the stated goal of re-electing Sen. Lindsey Graham, R-S.C., taking its name from the street where Graham’s parents once ran a diner. But the senator’s allies and advisers do not appear particularly receptive to the group.

"I don’t think the Graham campaign has ever seen a need to engage in any kind of parallel strategies," said Richard Quinn, Graham’s longtime consultant and pollster, "because the campaign’s fundraising has been so successful."

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