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Newspaper Article

    Tea party's growing money problem

    BY Kenneth P. Vogel
    08/18/2010

    Some leading tea party activists are concerned that their efforts to reshape American politics, starting with the 2010 elections, are being undermined by a shortage of cash that’s partly the result of a deep ambivalence within the movement’s grass roots over the very idea of fundraising and partly attributable to an inability to win over the wealthy donors who fund the conservative establishment.

    Many tea party organizations have shied away from the heavy-handed solicitations that flood the e-mail boxes of political activists. And the handful of tea party groups that have raised substantial amounts, either by embracing aggressive fundraising or through pre-existing connections to wealthy donors, are viewed suspiciously within the movement.

    Local groups have been left to literally pass hats seeking donations at their meetings or rely on their organizers’ bank accounts, while some national groups have failed to live up to their bold fundraising predictions.

    “I don’t blame them, since most of these people are so new to the process, and they don’t know anything beyond the protests, but at the end of the day, the energy and the passion will only take you so far,” said Ned Ryun, president of American Majority, a nonprofit group that teaches grass-roots conservative activists how to influence the political process. “Without money, nothing quite works like it could.”

    Last spring, American Majority organized a series of summits across the country to train local tea party activists on how to organize and raise money to influence elections.

    “We’ve been challenging them to start building what I call privatized political infrastructure to play in primaries and actually change the system,” Ryun said. “If it doesn’t start shifting, the tea party is going to be a flash in the pan.”

    The movement’s money problems suggest what may be the tea party’s central paradox — that the very anti-establishment sentiment that spawned it may keep it from having the resources it needs to become a sustainable political force.

    Many of the newly engaged activists who joined the movement regard traditional political fundraising as representative of the corrupt politics they abhor.

    “When you start chasing the money, you start having to compromise, and that’s where a lot of D.C. organizations go wrong,” said Everett Wilkinson, a South Florida financial adviser who runs two of the biggest tea party groups in Florida. “If we stay trim and we keep our overhead small, we won’t have to raise a lot of money and we won’t have to compromise. No one owns us.” 

    Anecdotal evidence from Wilkinson and others suggests that many groups are being financed out of the pockets of a handful of organizers and activists.

    Wilkinson said one of his groups raised less than $10,000 last year, while the other finished in the red, requiring him to cover its losses personally.

    Karin Hoffman, founder of a rival South Florida tea party group called DC Works for Us, said she finances all the activities of her 600-member group herself. “We don’t even want money,” said Hoffman. “We want people to contribute money directly to the candidates. A grass-roots movement doesn’t even really need money and shouldn’t really have money. To what end?”

    Other tea party groups have launched with ambitious financial goals, then failed to live up to them.

    Eric Odom, an early tea party organizer, in late November announced the creation of a new political action committee, estimating that small-dollar donations from the movement’s grass-roots activists would yield as much as $500,000 in seed money. But the group stopped filing mandatory reports with the Federal Election Commission after disclosing that it raised just $13,000 in December, and Odom recently told POLITICO, “We no longer operate under the PAC and are working in another direction.”

    And the websites of the FEC and the Internal Revenue Service show several tea party groups that filed the initial paperwork to form political committees last year but have yet to file additional reports indicating that they’ve raised any money.

    On the other hand, Tea Party Patriots, perhaps the leading coalition of local tea party groups, raised $900,000 in the year or so since its incorporation last summer, almost exclusively from its activist network, said its co-founder, Jenny Beth Martin.

    Martin said it’s been careful to avoid aggressive fundraising solicitations for fear of irritating its activists, though she did concede the group is developing “a comprehensive fundraising plan.”

    “We haven’t raised any big money,” she said, “but I certainly wouldn’t object if we did. We’re just learning the ropes for that.”

    Yet the deep-pocketed institutional and individual donors that have long funded the conservative movement have remained wary of the fractious and sometimes controversial movement.

    “There’s a bigger issue here,” said Erick Erickson, founder of the influential conservative Red State blog, which is popular in tea party and new conservative circles. “And that is that there are a lot of people out there that, by and large, don’t really think that the tea party movement is going to be around much longer, and so why invest in a movement that is not going to be there much longer?” 

    American Majority’s Ryun, the son of former GOP Rep. Jim Ryun of Kansas and a former aide to President George W. Bush, said he’s spoken to a number of “very, very big donors” interested in contributing to tea party groups.

    “But they’re a bit leery because they want to actually know these people are legitimate,” said Ryun, whose own group has raised a respectable $2.9 million between its formation in 2008 and the end of last year, according to a recent IRS filing.

    “In 2011, one of the major challenges for the tea partiers is whether they are going to be able to prove to donors that they have a plan to change the world, or at least their community, and to become long term and sustainable. If they can show that and prove some results already on a shoestring budget, I’m convinced, based on some of the conversations that I’ve had with donors, that there will be money for them.”

    Some of the biggest foundations behind the conservative movement — Koch and Bradley — have signaled their wariness about affiliating with the tea party, even as Koch doles out hundreds of thousands — and likely millions — of dollars to one of the main Washington nonprofit groups assisting tea partiers around the country: Americans for Prosperity, which was founded by the family’s most politically active member, David Koch.

    On the eve of the April 15 Tax Day tea party rallies in Washington, a spokeswoman for the various Koch foundations and companies issued a statement distancing the Kochs from the tea parties and another major Washington-based movement organizer, FreedomWorks, which was formed after a 2003 rift within a Koch-funded predecessor group that also yielded Americans for Prosperity.

    According to Koch spokeswoman Melissa Cohlmia, “no funding has been provided by Koch companies, the Koch foundations, Charles Koch or David Koch specifically to support the tea parties.”

    Nor have any Koch interests contributed to Tea Party Patriots or a number of other prominent tea party groups, Cohlmia later told POLITICO.

    Likewise, the president of the Lynde and Henry Bradley Foundation, which grant reports show has contributed $195,000 to Americans for Prosperity and $270,000 to FreedomWorks between the time of their split and the end of last year, said his group’s focus will remain on policy research and development, rather than grass-roots mobilization.

    “We are not directly funding their tea party activities,” foundation President Mike Grebe told POLITICO. “We’re funding public education programs run by Americans for Prosperity and FreedomWorks, both of which are very active in the tea party movement, but our monitoring of that would be indirectly, as opposed to having direct contacts with tea party people.”

    For its part, FreedomWorks has been working for years to replace large institutional donors, primarily corporations, with a broad network of smaller grass-roots donors — an effort that got a major boost when the group emerged as a tea party leader, said its president, Matt Kibbe.

    Still, according to its IRS filings, the group saw its contributions rise only about 5  percent between 2008 and 2009 (when it pulled in $7.6 million), despite its emergence as a leading tea party group.

    Though he conceded that tea party activists were initially reluctant to contribute to political groups and may never match big donors dollar for dollar, Kibbe said he believes “the tea party movement is not about going toe to toe financially with big moneyed interests. The tea party is about outworking the establishment.”

    Some of the tea-party-branded groups that have been most aggressive raising cash have been accused of using the movement for their own profit, a criticism leveled at Tea Party Nation, the for-profit company that charged $550 for tickets to a tea party convention it staged in February in Nashville. Its owner remains mired in a lawsuit over $50,000 he borrowed to pay Sarah Palin’s speaking fee for the event, which, beset by controversy, barely broke even.

    The Tea Party Express, a PAC that organizes cross-country bus tours and airs ads supporting tea party candidates, has been among the movement’s most successful fundraisers, but its close financial ties to a GOP consulting firm have engendered deep suspicion among activists. It had been operating for nearly a year as Our Country Deserves, supporting John McCain’s presidential campaign before implementing a plan last July to boost its profile and finances by repositioning itself as a tea party group.
    After that, it saw its fundraising more than quadruple, raising nearly $2.7 million in roughly the next six months, compared with less than $600,000 in the preceding six months, according to FEC filings.

    Yet, allegations from tea party circles about profiteering by groups such as the Tea Party Express have hindered the ability of the movement, as a whole, to raise money, said Red State’s Erickson.

    “Every movement — left, right, center or no political affiliation whatsoever — attracts its contingent of scammers and con artists and charlatans, and it takes a while for that to sort itself out,” he said. “And that’s why a lot of the money is still sitting on the sidelines.”

     

     

    by Kenneth P. Vogel on 8/9/10.