The Federal Election Commission released a report Friday alleging Crossroads GPS, a nonprofit entity that spends a portion of its resources promoting conservative political causes, may have violated federal election laws going as far back as 2010.
The revelation could have major implications for groups active in electoral politics that have registered as the tax-exempt 501(c)(4) organizations and bill themselves as a social welfare groups.
Under federal election law, nonprofits like Crossroads are legally allowed to participate in some candidate advocacy, but that role may not account for the majority of the group's spending.
Over the years, Crossroads GPS has doled out millions for conservative causes and dominated the television airwaves in competitive congressional districts and swing states.
The FEC report alleges that Crossroads spent so much of its money on campaigns that it violated federal election law by not registering a designated "political committee."
The FEC's professional staff's legal report implicates Crossroads saying "the commission finds reason to believe that Crossroads GPS violated [the law] by failing to organize, register and report as a political committee."
However, the Federal Election Commission, which is made up of three Republican and three Democratic members, was divided over whether to proceed with the case and will not move forward.
Crossroads claims the dismissal of the case as a victory and argues it is evidence they have done nothing wrong.
"The FEC itself dismissed the staff's very argument. What the FEC says is what matters, not the staff, and the commissioners DID NOT agree with the staff," writes Jonathan Collegio, a spokesman for Crossroads, in an email to U.S. News.
Outside watchdogs, argue, however the case is a troubling example of how partisan the fight over federal election law has become.
"Campaign finance has become a politicized issue. In the aftermath of Watergate, everyone was onboard. What has happened in the ensuing years is that big money has become an awfully tempting things for politicians," says Kathy Kiely, a spokesman for the Sunlight Foundation, the group who brought the FEC allegations to the media's attention. "It seems unlikely, unless someone gets struck by a bolt of lightening and inspired by a guardian angel, that anyone's mind on the FEC board will change."
With the FEC deadlocked, Kiely says it is the Internal Revenue Service that will have the power to strengthen campaign finance rules.
With the encouragement of the White House, the IRS is currently considering a set of guidelines that would make it more difficult for tax-exempt organizations like Crossroads GPS to participate in the election process.