Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
December 20, 2014

Steeped in Overhead: A Look at the Expenses of Tea Party Groups

chocola002 010914 445x299 Steeped in Overhead: A Look at the Expenses of Tea Party Groups

Chocola runs the Club for Growth. (Tom Williams/CQ Roll Call File Photo)

Updated, 5:20 p.m. | Republican leaders are stepping up their campaign to discredit tea party activists who are challenging them on Capitol Hill and on the campaign trail, accusing conservatives of lining their own pockets at the expense of the GOP.

A recent radio ad for Senate Minority Leader Mitch McConnell, R-Ky. — who is under attack from the right in his own primary — blasts the Senate Conservatives Fund for spending its money “on a luxury townhouse with a wine cellar and hot tub in Washington, D.C.” House Republicans joke privately about the “conservative-industrial complex.” Even Ann Coulter has warned of “con men and scamsters” infiltrating the tea party movement.

Such claims hold more water for some groups than others in a movement with no clear leader. The tea party, loosely defined, is scattered among more than a dozen multimillion-dollar organizations, from the Club for Growth to FreedomWorks, to the Tea Party Express and the conservative startup Madison Fund, all with different bottom lines and spending patterns.

Some of the groups that have come in for the most criticism, such as the Senate Conservatives Fund — which calls the McConnell radio ad inaccurate — actually do spend most of their money on candidates. Others, such as the Tea Party Patriots Citizens Fund, have spent exactly zero in this election cycle on candidates, even as they raise millions from low-dollar donors.

Whatever their overhead, tea-party-aligned groups are spending tens of millions collectively, sometimes with little or no board oversight. Such groups tend to operate multiple fundraising entities, simultaneously pulling in checks for a 501(c)(3) charity, a 501(c)(4) advocacy group, a conventional political action committee subject to contribution limits and an unrestricted super PAC. Public records filed with the IRS and the Federal Election Commission revealed some unusual expenditures.

  • Club for Growth President Chris Chocola earned $510,786, from mid-2012 to mid-2013, tax records for the group’s advocacy arm show, pushing his election-cycle earnings to more than $1 million. Club spokesman Barney Keller called that “a pretty good deal,” given that U.S. Chamber of Commerce President Thomas Donohue earns $5.5 million a year. “I would argue we have exactly the same effect on policy as the chamber does,” Keller said.
  • The Tea Party Express PAC raised $10 million in the 2012 cycle, more than three-quarters of it from donations of less than $200. But the group made only $259,500 in campaign contributions and $686,124 in independent campaign expenditures in that election, public records show. In the meantime, one of its lead organizers, political consultant Sal Russo, handled the bulk of the group’s fundraising, travel, consulting, direct mail and ad production — earning his California consulting firm Russo Marsh & Associates a cool $2.3 million, according to Political MoneyLine.
  • FreedomWorks paid its president and CEO, Matt Kibbe, $470,000 in 2012, or about $940,000 for the full election cycle. The group’s advocacy arm pulled in $15 million in 2012, according to its most recent tax disclosures, and spent $5 million on “advertising and promotion,” $1.4 million on “office expenses,” $1.3 million on “conferences, conventions and meetings,” and $74,285 in severance to a departing employee. A FreedomWorks board member also reportedly paid former House Majority Leader Dick Armey an $8 million settlement following his departure as chairman amid a FreedomWorks shakeup.
  • The Madison Project, a conservative PAC that has spent $51,884 opposing McConnell, spent $1.8 million in the 2012 election cycle. Some $97,500 of that was donated to candidates, FEC records show. But still more went to pay the group’s top organizers, according to the Center for Responsive Politics. Chairman and ex-Rep. Jim Ryun, R-Kan., earned $66,540, according to the CRP, while his son, political director Drew Ryun, made $67,932.

Conservative organizers say they spend their money efficiently and employ relatively few staff while making a major impact. They take credit for helping elect such conservatives as Republican Sens. Ted Cruz of Texas, Mike Lee of Utah, Marco Rubio of Florida and Rand Paul of Kentucky. When McConnell told The New York Times recently that the GOP would “crush” conservative activists “everywhere,” tea party organizers turned his warning into a fundraising pitch.

“They are the ones who subvert the platform of the party in order to placate moneyed interests,” Madison Project Policy Director Daniel Horowitz said in an email. He added that his group’s organizers “are entering politics, often for the first time, specifically not to make money.”

FreedomWorks Executive Vice President Adam Brandon said his group’s advocacy arm has earned Charity Navigator’s top four-star rating for sound fiscal management and commitment to accountability and transparency two years running.

“We’ve always been able to keep our fundraising costs very, very low,” Brandon said, adding that slightly more than 90 percent of the group’s income last year went to “programmatic support.” The group’s mission “is not to get Republicans elected,” he said. “That’s never been our goal. Our goal is to build the most fiscally conservative majority that there is. Our goal is to hold people accountable.”

At the Senate Conservatives Fund, Executive Director Matt Hoskins has born the brunt of GOP complaints and scrutiny following reports that his group spent tens of thousands for a costly remodeling at the Capitol Hill townhouse where the PAC is headquartered, including for the “wine cellar and hot tub” cited in McConnell’s ad. Hoskins said the ad is misleading because the group rents the space.

“We don’t even have a hot tub,” Hoskins said. “It has a whirlpool bath tub, and I’m told that it doesn’t even work.”

In the previous election, the group’s super PAC, known as Senate Conservatives Action, made $1.3 million in independent campaign expenditures. Its conventional PAC, the Senate Conservatives Fund, bundled $6.4 million on behalf of GOP candidates.

Since its 2010 inception through Jan. 31 of this year, the Senate Conservatives Fund has doled out some $640,000 to Bold Colors, a consulting firm run by Hoskins. That works out to about $240,000 a year — a healthy sum, but far less than some other tea party organizers are making. In this election, the group’s super PAC has spent close to $600,000 on primaries aimed at ousting McConnell and GOP Sen. Thad Cochran of Mississippi.

Hoskins says conservatives are good for the party.

“We want a Republican majority. But we believe that it needs to be a conservative majority, or it won’t change the country in a meaningful way,” he said.

But GOP leaders are finding new ways to vent anger over the large sums conservatives spend attacking incumbent Republicans. Ex-Rep. Steven C. LaTourette, R-Ohio, who runs the Defending Main Street super PAC, recently accused the Club for Growth of helping install California Democratic Rep. Nancy Pelosi as speaker, because the club spent three times more assailing Republicans in the 2006 election cycle than opposing Democrats.

“My chief frustration with these groups is that they seem to have made the determination that the weaker the Republican Party is, the stronger they are,” said Brian Walsh, a GOP strategist who consults for the National Republican Senatorial Committee, where he previously was communications director. “And I think that hurts the advancement of conservative principles, instead of helping it.”

The GOP complaints, Walsh predicted, are just getting started: “You are seeing a concentrated effort to expose one, their hypocrisy, and two, the financial motives that are guiding many of them.”

Ed. note: This story has been updated to clarify that Armey’s $8 million severance from FreedomWorks in 2012 was paid by a FreedomWorks board member, not by the organization itself.


Want to see more political commentary and opinion stories like this? Sign up for Roll Call's Thought Leaders Newsletter – delivered daily to your inbox!

  • http://marketsharescorp.com/ Nick10

    Club for Growth, FreedomWorks,Tea Party Express, Madison Project got rich ripping off simple hapless voters who got ripped off.

  • palintologist

    Sometimes the TEA Party wins by just showing up to fight the corrupt candidates: http://bit.ly/1jr1JuR

    • KarenJ

      Unless they ARE the corrupt candidates and pundits (hello, Steve Stockman, Dinesh D’Souza…).

  • Peter Castle

    Ann Coulter is the real “con man,” masquerading as a conservative but always looking for the next RINO to support. In reality, we should Never Trust Ann Coulter – at ANY Age, at http://www.coulterwatch.com/never.pdf.

    • BigOnion

      Thank you for making me smile. The way that Conservatives turn on, and eat, their own, for ideological failings too small for the non-Conservative to see, never fails to lighten my heart. :)

  • KarenJ

    “Such groups tend to operate multiple fundraising entities, simultaneously pulling in checks for a 501(c)(3) charity, a 501(c)(4) advocacy group, a conventional political action committee subject to contribution limits and an unrestricted super PAC. Public records filed with the IRS and the Federal Election Commission revealed some unusual expenditures.”

    These scam artists already have their whining “pity us, we’re being victimized!” excuses ready should the IRS give another more thorough look at their financial reports.

  • Carabella1

    I would say the rise of the tea party has been very good to the CEOs, more so than the sheeple they purport to represent. No different than any other corporate shills. Golden parachute, anyone?

  • YONATAN C

    How sad that men like John Boehner will stand in the way of the passing of the unemployment extension bill that would help the more than two million unemployed workers and their families without benefits, and the means to survive economically, while seeking employment. How can he claim to be for fiscal responsibility when millions of our tax payers dollars are going to fund corporate welfare and foreign aid? When tax payers dollars were spent on bailing out the Banking and Airline industries, amongst other companies, where was their “fiscal responsibility” and budgetary concerns then? Why is helping the average working American worker and families, not as important? I’m looking forward to the 2016 election. You will see these millions of voters show their distain and anger towards these career politicans in the voting booths.

  • OdinofAzgard

    Kinda like the mafia tries to keep small-time criminals from ruining the game. Big corruption doesn’t want the light or the heat.

  • YONATAN C

    The Republican Party has failed the three million unemployed families STILL WITHOUT an extension of benefits, since late last December. Over the past six months, the Republican senate has held the extension bill “hostage” in the senate, for political leverage, and party agenda. They have sentenced these families to financial ruin and deep poverty, which many may not recover from. While they fought tooth & nail for the Koch Brother’s oil pipeline bill to be passed, they totally ignored these struggling families. The Republicans have shown a total lack of compassion, and common decency towards the disadvantaged in our country. The new face of their party is Senator John Boehner. This is a man that has rejected every idea and every bill that would benefit average Americans. Billions of dollars have been approved for the Ukraine, while the extension bill is still not passed to help these families. It’s appalling

Sign In

Forgot password?

Or

Subscribe

Receive daily coverage of the people, politics and personality of Capitol Hill.

Subscription | Free Trial

Logging you in. One moment, please...