A high-dollar Republican advocacy outfit is expanding with a new super PAC arm, taking advantage of quirks in the campaign finance system to pump substantial amounts of undisclosed money into key House and Senate contests, Axios has learned.

Driving the news: The Common Sense Leadership Fund, a GOP-aligned nonprofit group, has already steered half a million dollars to its new political action committee, the Eighteen Fifty Four Fund.

• CSLF spent more than $12 million on issue ads last year going after vulnerable House and Senate Democrats. At one point, it topped the list of all national policy advocacy groups in ad spending.
• It anticipates its new group will spend in excess of $10 million — and potentially much more — on midterm contests.
• The launch of Eighteen Fifty Four, a super PAC named for the year the Republican Party was founded, has not been previously reported.

The big picture: The 2022 cycle is expected to be the most expensive midterm cycle ever, driven largely by high-dollar super PACs on both sides.

• Most of them, though, are devoted to backing single candidates, many of those in pitched primary battles.
• Eighteen Fifty Four's focus is broader, and more aligned with GOP leadership.
• CSLF and its new political arm are creations of Kevin McLaughlin, a former executive director of the National Republican Senatorial Committee.
• As a 501(c)(4) nonprofit, commonly known as a "dark money" group, CSLF is not required to disclose its donors. That means the sources of funds it steers to the new PAC will remain a mystery.

What they're saying: "Our overarching goal is to supplement and serve as additional support to the ongoing stellar work of both the Senate Leadership Fund and the Congressional Leadership Fund," a CSLF spokesperson said, referring to the GOP's top congressional super PACs.

• He declined to name any of the races the group will spend on, but said they will include both primary and general election contests.
• Since last year, CSLF has gone after key Republican targets such as Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (D-N.H.).
• The spokesperson said the new PAC will raise money from CSLF and other donors, and will likely spend in the "eight figures" this year.
• "There's been de minimis political activities" at CSLF, which legally cannot have politics as its primary purpose. "So we have a lot of cap space."

Be smart: "Cap space" is a term operatives use to describe how much political activity a nonprofit can engage in under those political activity restrictions.

They generally limit nonprofit political spending to 49% of their annual budget.

• In other words, CSLF can legally steer up to half of its money — minus one cent — to Eighteen Fifty Four.
• Every dollar it spends on legally non-political activities — such as issue advocacy ads — frees up another dollar under that cap to send to its PAC for direct political activity.