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American Crossroads facing challenges to its political power

WASHINGTON >> For three election cycles, American Crossroads, the brainchild of Karl Rove and other leading Republican strategists, has been among the most powerful forces in national politics, a shadow party that has spent hundreds of millions of dollars on advertising, data and opposition research to help elect candidates.

But in the early days of the 2016 presidential campaign, Crossroads — among the first outside groups to fully exploit the Supreme Court’s Citizens United decision unleashing wealthy donors and corporations — has been buffeted by a rapidly changing political landscape that is testing its pre-eminence, and potentially its survival.

The nonprofit arm of Crossroads is facing an IRS review that could eviscerate its fundraising. Data projects nurtured by Rove are being supplanted in Republican circles by a more successful initiative funded by the Koch political network, which has leapfrogged the Crossroads organizations in size and reach.

And the group faces intense competition for donors from a new wave of super PACs that are being set up by backers of the leading Republican candidates for president, who are unwilling to defer to Rove’s authority or cede strategic and fundraising pre-eminence to the organizations he helped start.

In recent weeks, Crossroads has begun carving a niche for itself in attacking Hillary Rodham Clinton, the presumed Democratic front-runner. The group will use polling data and opposition research to paint her as “a typical politician who would say or do anything to get elected,” said Stephen Law, president of Crossroads.

If the group’s role seems diminished, Crossroads officials are not complaining publicly. If anything, they are lowering expectations for an organization that raised $300 million in the 2012 cycle.

“Our goal is not to make American Crossroads the big dog of 2016,” Law said. “Our goal is to win the White House and hold the Senate and the House.”

He added that in the large field of Republican groups and campaigns, “we’re a first baseman who effectively plays our position.”

“We’re a critical player,” he said, “but part of the team.”

The group still plans to get heavily involved in some Senate primaries and in defending Senate seats in the general elections in 2016, officials involved with Crossroads said. The creation of the Senate Leadership Fund, a super PAC blessed by Sen. Mitch McConnell, the majority leader, and operated by Crossroads leadership, will be a major vehicle for that. But Crossroads’ involvement in the presidential race is still under discussion.

Rove, the veteran Republican operative whom President George W. Bush called the architect of his 2004 re-election campaign, declined to comment on the group’s role in the 2016 campaign, referring questions to Law.

But there is no doubt other groups have emerged that have moved beyond simply flooding the airwaves with television ads — traditionally the major priority of Crossroads. Charles G. and David H. Koch, who began Americans for Prosperity around the same time as Crossroads was founded, have expanded their political network, focusing on grass-roots organizing, developing a sustainable trove of voter data, and starting an initiative called Libre, which is aimed at engaging Hispanic voters.

Republican presidential candidates, using fundraising techniques that Crossroads itself helped pioneer, are creating their own super PACs that have enabled large donors to make unlimited contributions directly through them rather than through outside groups like Crossroads. Chief among them is Right to Rise, the super PAC that is supporting Jeb Bush, whose donor network overlaps significantly with that of Crossroads.

The group is facing a long list of other political and financial obstacles as well. Two of the biggest donors to Crossroads — Bob Perry and Harold Simmons — have died since the 2012 campaign. In that election, many of the congressional candidates it backed — along with Mitt Romney, the Republican nominee for president — took a drubbing, raising questions about whether donors got much bang for their buck.

The group has also lost some of its most visible fundraisers over time. Ed Gillespie, the former chairman of the Republican National Committee, left in 2012 to join Romney’s campaign, and Haley Barbour, who also once held the chairman title and is a prodigious fundraiser, departed in early 2013. A fundraising advisory group formed by Crossroads after Barbour’s departure failed to accomplish much.

More recently, Carl Forti, the longtime Crossroads political director, who simultaneously worked on the pro-Romney super PAC Restore our Future in 2012, is said by four people familiar with the discussions to have been in talks with at least one 2016 campaign — that of Gov. Scott Walker of Wisconsin, who is not yet an official candidate. Forti did not respond to an email.

A history of personal tensions between Rove and Jeb Bush could further undercut the group’s role in the presidential race, should Bush emerge as his party’s nominee.

Although Rove was George W. Bush’s top political adviser, his relationship with Jeb Bush has long been described as strained. Rove was seen by Jeb Bush’s team as poaching some of their material when the two brothers were running for governor in Florida and in Texas in 1994, and relations between Rove and Mike Murphy, Jeb Bush’s top strategist, have long been tense, although some say there has been a thaw of late.

And while Rove is beloved by a number of Republican donors, many grass-roots Republicans regard him as too closely tied to a presidency they see as insufficiently conservative.

Several donors who had grown familiar with the Crossroads pitches over the last four years said the group had been fairly quiet on the fundraising circuit since the 2014 midterms. But Crossroads officials say that there is no threat to their fundraising base, predicting that many donors will be willing to write two large checks — one to them and another to committees tied to a particular candidate. In 2014, Crossroads, despite a slow start, raised more than $100 million by November.

“People are as enthusiastic as ever about what we are trying to accomplish, and we are enjoying significant support from donors, including from those who have also supported specific presidential candidates,” said Ian Prior, a spokesman for Crossroads, who joined the organization this month as one of four new senior-level hires.

Law said the group planned to double the number of staff members to about two dozen in the next nine months as it gears up for the election. But he would not say how much it hopes to raise.

Donald F. McGhan, a Republican campaign-finance lawyer, said it was not clear how those efforts would play out.

“It’s really too early to tell this cycle who is going to be the dominant one and whether Crossroads is going to be more relevant or less relevant,” he said.

But Mel Sembler, a strong backer of Jeb Bush who is also involved with Crossroads, said speculation about the group’s changing role was exaggerated. He said that Crossroads was already drawing large numbers of donors who were also supporting Bush, and he predicted that would accelerate in the months ahead.

“Crossroads has been amazing,” he said, “in raising money and deploying it effectively.”

Anthony Scaramucci, a Republican donor and financier, said he expected that Rove — and Crossroads — would find a way to maintain their influence.

“I would never underestimate him,” he said.

© 2015 The New York Times Company

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