Tea party groups are making and spending millions, but not on candidates

Alexis Levinson | Political Reporter

Two well-known tea party groups spent more than 80 percent of the money they raised in 2013 not on the causes and candidates that they say it is their mission to support, but on operating expenditures, like paying consultants, companies who produce mailing materials and renting mailing lists.

The new Tea Party Patriots Citizens Fund and the independent expenditure arm of Tea Party Express — the Our Country Deserves Better PAC — spent a majority of the money they raised on things other than political expenditures.

The Tea Party Patriots Citizens Fund has been raising money since early last year. The goal of the super PAC, said Tea Party Patriots co-founder Jenny Beth Martin in a statement posted to the website, is to be a “community organizing for conservatives,” that will help “provide activists with resources… to organize friends, neighbors, and communities around a freedom agenda in an effort to put people in office who will be true representatives of the people.”

“The mission of the PAC will be to support good citizen-candidates to run for public office and represent the views of the majority of Americans in all levels of government,” Martin added.

So far, no money has been spent to support those candidates. According to the year-end spending report filed with the Federal Election Commission, of the $6,405,087 that the group has raised since early last year, $5,335,162 has been spent, and all of it has been put toward operating expenditures.

A vast majority of the donations came from donors who gave under $200 — the committee reported $4,702,716 in unitemized donations under the $200 mark.

The sums that were paid out by the group were much larger.

Strategic Fundraising, a St. Paul, Minnesota-based company that specializes in fundraising, was paid $1,028,148.96 for “List Rental.” Groups looking to raise money or get a message out to a growing number of people often rent lists of home addresses or email addresses to send out their materials.

Integram, a printing and mailing company based in Dulles, Virginia, was paid $892,127.54 for those services. The Richard Norman Group, a fundraising and communications consultant group that caters to conservative clients, was another of the most highly paid vendors, getting $647,820.78 for direct mail, fundraising consulting, media production, postage, and transaction fees.

Direct mail expenditures account for a large quantity of the group’s disbursements.

Martin was paid $90,000 for strategic consulting.

“We were building our supporter base for starting an organization essentially from scratch, so we have to begin building the supporter base for Tea Party Patriots Citizens Fund, and we began doing fundraising and also advertising that we had the Tea Party Patriots Citizens Fund,” Martin told The Daily Caller Tuesday.

She said, so far, they have begun “building out a national voter database,” setting up “technology and infrastructure” to support their efforts moving forward, and begun training members in those systems. Additionally, she said, they have spent money on “message testing and polling.”

Moving forward, she said, it is not yet decided how much the group will spend on independent expenditures. “We’re still determining the balance between how much we actually will do with endorsements versus how much we will do with voter education,” she said.

The reason for starting an independent expenditure group, she explained, was not about being able to make independent expenditures in races, but because “we felt the ramifications of the IRS targeting so severely,” Martin said, and they felt having this type of group would allow them to “more freely exercise our First Amendment rights.”

The Our Country Deserves Better PAC declares itself “committed to identifying and supporting conservative candidates and causes that will champion tea party values and return our country to the Constitutional principles that have made America the ‘shining city on a hill,'” in the mission statement on its website.

The group allocated its spending in a similar fashion to the Tea Party Patriots Citizens Fund. In 2013, it raised $6,003,834, the vast majority of which — $4,911,943 — came from donors giving amounts smaller than $200.

The group spent $5,757,324 in total. $5,678,878, or 98.6 percent of that spending, went toward operating expenditures, like direct mail, salaries, and paying strategic consultants. $55,995 went toward independent expenditures.

On Monday, the group spent $99,975 on an independent expenditure in support of Owen Hill, a candidate for Senate in Colorado, their first reported expenditure of 2014.

Russo Marsh + Associates received over $1.9 million for performing a variety of functions for the PAC: fundraising by mail, telemarketing, advertising, strategic consulting, as well as a number of reimbursements for travel expenses and postage. Amy Kremer, the chairman of the Tea Party Express, got $92,000 for strategic consulting. $421,123.80 went to a direct mail fundraising firm, HSP Direct, for “creative fees” related to fundraising.

There’s an argument to be made that these expenditures are reflective of spending during an off-year for elections. In 2013, there were very few elections. The presidential race was being talked about, but almost no one was spending money on it yet, and the midterm elections for congress did not really kick off until the new year.

Freedomworks, for instance, another group that identifies with the tea party and works to organize activists, also spent most of their money on overhead in 2013. They raised $847,243 on top of the $831,231 they began the year with. They spent $1,083,260 in total, and 87.3 percent of that spending, or $945,931, went to operating expenditures. $133,853, or 12.4 percent, went to independent expenditures.

But in 2012, when the tea party was battling to unseat Democrats in Congress and President Barack Obama, the numbers looked a little different. Freedomworks began the year with $1,990,381.09 cash on hand, and raised $20,847,893.90 over the course of the year. They spent $22,007,043.73 in total. Of that, $19,403,203.41, or 93 percent, went to independent expenditures. Operating costs amounted to just $2,539,912.03.

The Tea Party Patriots Citizens Fund did not exist before 2013, so 2014 will be the first election year in which they spend money, though Martin’s comments indicate they may continue to spend little on independent expenditures.

But the 2012 election seems to have had little impact on how the Our Country Deserves Better PAC spent its money. The group began the year with $115,975.19 in the bank. Throughout 2012, they raised $6,508,820.37. In total, they spent $5,725,731.21. Of that, 86 percent — $4,926,449.41 – went toward operating costs. $249,500 was given to other political committees or candidates, and $539,421.80 went toward independent expenditures.

Taylor Budowich, the executive director of Tea Party Express, said the group was focused on organizing and educating voters, not spending money to directly help candidates.

“Historically, we haven’t taken the burden of holding up candidates’ advertising,” Budowich said.

“We’re not Club for Growth; we’re not Crossroads. What we do is mobilize the grassroots and engage them in elections… through bus tours and grass roots activities,” he said, referring to other groups that put a lot of money behind independent expenditures to support or candidates.

Bus tours and organizing, Budowich added, are “not a cheap endeavor.”

“Our biggest influence has been nationalizing races,” he explained, and getting people engaged in elections, declaring that they have “been extremely successful” in doing so.

“It’s a very valuable process,” he said, “and something that I think campaigns have really benefited from.”

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