POLITICS

American Crossroads GPS, New Rove Group, Has Dems Questioning Obama's Political Operations

News that two former top Bush strategists have formed a spinoff organization to dig up dirt on Congressional Democrats before the 2010 elections has reignited a debate about how the Obama administration has structured the Democratic Party's own political operations.

On Wednesday morning, Politico reported that American Crossroads GPS, the organization formed by operatives Karl Rove and Ed Gillespie, hauled in an impressive $5.1 million in June. A separate legal entity from its parent shop, American Crossroads (a distinction that allows it to hide the names of its donors), GPS was poised to use that money for the ostensible purpose of wreaking havoc on behalf of Republican candidates.

It's the type of secretive electioneering that has Democrats publicly crying foul -- the Democratic National Committee sent out the story on Wednesday morning. In private, however, party operatives expressed anxiety with the development.

During the 2008 campaign, a group of Democratic operatives essentially tried to create its own version of American Crossroads GPS. Progressive Media was formed in 2007 as an independent opposition research arm for the presidential campaign. The organization, structured then as a 527 group, produced notable hits, including footage of John McCain saying he would be comfortable if U.S. forces were in Iraq for 100 years as well as the first mention of the Arizona Republican's numerous homes.

But the money that Progressive Media needed for operations was all but cut off after the Obama campaign sent out word to donors that it wanted the funds channeled through its shop. The decision proved remarkably helpful to the campaign, which was provided with a historic funding stream to overwhelm the McCain campaign's message. But it was a blow for Progressive Media, which was forced to evolve into several different incarnations. The first was Progressive Accountability, a 501c(4) group that produced issue-oriented material. The second was a separate group, Accountable America, an organization set up by operative Tom Matzzie (a founder of Progressive Media) with the purpose of digging up dirt on major Republican donors.

Both groups played important roles in the 2008 campaign. But after the election they've been revamped. Progressive Accountability is now fully incorporated under the umbrella of two more mainstream Democratic institutions -- Media Matters and the Center for American Progress. Accountable America has been focused on financial regulatory reform.

With the 2010 elections now ramping up, Accountable America is now "evaluating whether there is a viable 2010 program around issues in the elections," Matzzie says. But the prevailing fear among operatives is that there simply is no alternative force to what Rove and Gillespie have built.

"It was a successful model and idea that the Democratic side shut down but the Republicans were smart enough to pick it up," said one former Progressive Accountability official.

"The Democratic donor base is missing in action right now," Matzzie added. "The Obama camp told them not to fund independent groups in 2008 and they're still sitting out. Until donors mobilize in a serious way with six-and seven-figure checks, this is going to be an uneven match in the Fall."

The disparity in outside group activity is not a small matter vis-à-vis the elections. Already, Democratic campaign committees are fretting over the financial disparities they will face in the fall, circulating memos showing an avalanche of $200 to $300 million in spending that they will face from just a handful of organizations.

But the problem extends beyond money. In 2008, having a top-down organization suited the climate. The Obama campaign, in essence, was able to raise all the ships simply because it spent money in many critical states. Without that central organizing force (the Democratic National Committee and Organizing for America are attempting to fill the void), the likelihood increases that individual races will suffer.

"I'm more optimistic about Democratic prospects for the fall than a lot of media speculation," said Matzzie. "The 2006 and 2008 elections represented both a new trend and a high tide. Yes, there will be some losses because of the receding high tide -- mostly conservative Democrats losing seats in largely Republican districts. That is just ebb and flow -- not a wave. Where these groups make a difference is in the size of the tide. An extra five-seat loss might mean that Democrats lose the House in 2014 instead of 2016."

UPDATE: Jonathan Collegio, a spokesman for American Crossroads, emailed the Huffington Post to clarify a few points about the spin-off group and Rove's involvement in it.

Crossroads GPS does not invest in opposition research or "digging dirt," as implied by Kenneth Vogel in today's POLITICO article. It should also be noted that neither Karl Rove nor Ed Gillespie are formally associated with American Crossroads or Crossroads GPS, though they both informally support and provide advice to the groups.