Mystery donor gives $7 million to group

An anonymous donor gave $7 million to the American Action Network, a conservative group that spent millions to aid Republicans in the 2010 midterm congressional elections, according to tax returns the organization is filing with the Internal Revenue Service.

That single donation accounts for 25% of the nearly $27.5 million raised by the group between July 1, 2010, and June 30, 2011. The organization, which touts its grass-roots advocacy efforts, showed contributions from just 34 donors during that period. Eight contributors accounted for nearly 90% of the group's revenue.

As a tax-exempt group, the American Action Network does not have to publicly disclose its donors, and spokesman Dan Conston said the organization would not comment on its contributors. It was founded with help from veteran Republican power broker Fred Malek and is run by former Minnesota senator Norm Coleman.

The filings, made available to USA TODAY, show the network spent more than $25 million and used the lion's share of the money -- $17 million -- on so-called issue advocacy and grass-roots organizing. It said $5.5 million went to activity focused on candidates and other political activity. The group also distributed money to six other conservative groups, including nearly $500,000 to American Crossroads, a super PAC linked to Republican strategist Karl Rove.

Conston said the tax return confirms the network's "primary purpose has been and remains to advocate for the implementation of center-right policies that we believe enhance American social welfare."

Democracy 21, a campaign-finance watchdog group, has pressed unsuccessfully for the IRS to strip the American Action Network of its tax-exempt status, arguing its primary funtion in the 2010 election was to run ads attacking Democrats and other political activity, not social welfare.

Democracy 21 President Fred Wertheimer charged Tuesday that the group is "funded by the rich and the super rich" and is using its tax status to skirt contribution limits and disclosure requirements.