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Tea Parties Emerge as Revenue Stream

by Kenneth P. Vogel

Tapping into the deep reservoir of anger on the right at President Barack Obama and Congress has turned out to be a financial boon to a diverse collection of tea party-affiliated political groups and candidates soliciting donations and raising money from the sale of T-shirts, books and paraphernalia.

Tapping into the deep reservoir of anger on the right at President Barack Obama and Congress has turned out to be a financial boon to a diverse collection of tea party-affiliated political groups and candidates soliciting donations and raising money from the sale of T-shirts, books and paraphernalia. (Photo: AP) The tea party brand has proved to be a potent source of revenue for new for-profit companies funding - among other things - an upcoming convention keynoted by Sarah Palin, for established national non-profit groups soliciting small donations and for political action committees and long-shot candidates raising hundreds of thousands of dollars to try to overcome sometimes long electoral odds.

And it's spawned a host of competing initiatives to capitalize on the willingness of conservative activists to put their money where their politics are, even during tough economic times.

A combination of newly engaged small donors and already engaged ones redirecting their contributions are the main source of the money, according to movement organizers in Washington and across the country, who predict that if tea party donors unite behind a group or cluster of groups, they could emerge as a force as well-financed as the liberal juggernaut MoveOn.org.

But the fundraising efforts have also prompted grumbling about the monetization of a local grass-roots movement and raised concerns about whether the money is being used to advance the cause of the activists who burst onto the national scene last summer with marches and town hall protests around the country.

The debate over fundraising reflects the tensions of a movement whose internal stresses have raised concerns on the right about its ability to become a factor in the 2010 elections. Already, there are charges and countercharges that the money that has been raised has not been used effectively to advance the small-government, limited taxation ideals at the heart of the tea party movement.

"There are a lot of questions about money and where all the money has gone," said Erick Erickson, editor of the influential conservative blog RedState.com, which has emerged as both chronicler of - and guide for - the tea party movement.

Conservative bloggers and activists have at times accused some tea party organizers of poor budgeting, wasting money on flashy initiatives like cross-country bus tours that critics say don't do much to advance the cause, or - worse - using cash raised from activists to pad their groups' coffers or their own wallets.

"The biggest problem I have is that there are a bunch of hacks out there," said Erickson, who has been traveling the country advising conservative groups and big donors on strategies for feeding and channeling the grass-roots energy behind the tea party movement. He said "multimillion-dollar donors" have largely refrained from supporting many of the tea party-affiliated groups because they're waiting for signs of which will be able to effectively advance the movement.

In the meantime, though, small-dollar donations from the movement's grass-roots activists have emerged as a significant funding stream that could be key for the tea party to advance from merely staging protests to shaping elections, according to Eric Odom, an early tea party organizer who has founded a handful of tea party-related groups.

"If you take the million people who turned out on April 15 [at Tax Day Tea Parties around the country], and you can get even half of those to contribute $100, that's pretty significant and that's what we're working on," said Odom, who helped organize the April rallies.

This month, Odom unveiled a new political action committee called Liberty First PAC to raise money from tea party activists to fund congressional challengers embodying the movement's principles. Though the PAC has only raised $15,000, he says it's received pledges for $100,000. "Our next $400,000 is within reach, and after that, it should take care of itself," he predicted.

Odom conceded, though, that a for-profit company he co-owns called American Liberty Alliance burned through the $30,000 it raised - from donors and by selling Web ads - to fund a monthlong candidate-backing cross-country bus tour before it could pay a couple of the people who helped pull it off, though he says the payments weren't guaranteed.

The California-based political action committee Our Country Deserves Better PAC-TeaPartyExpress.org has raised big bucks - and hackles - for its own pair of bus tours on the so-called Tea Party Express, whose riders participated in tea party rallies in towns along its cross-country routes.

The PAC sought $250,000 in donations from grass-roots activists to fund a bus tour that started in San Diego in October and ended this month in Orlando. The PAC, which is planning another pair of tours in 2010, reported to the Federal Election Commission that from the beginning of the year through the end of June (the most recent figures available), it raised $585,000 and paid $235,000 to PAC officials, the consulting firm that runs the PAC, and the activists who have traveled on the Express.

The PAC's coordinator, Joe Wierzbicki, said its goal " is to support conservative candidates for Congress in 2010 and a conservative presidential candidate in 2012." A good portion of its money went to produce ads supporting Republican campaigns, including Jim Tedisco's narrow loss in the special election for a western New York congressional seat, and opposing Democrats such as Senate Majority Leader Harry Reid. In all, the PAC this year spent $327,000 on independent expenditures through the end of June.

In two closely watched battles between Republican moderates and conservative challengers, small donors have played a major role. Doug Hoffman, the Conservative Party candidate in a New York special congressional election, received most of the more than $265,000 he raised for his unsuccessful campaign from outside his upstate New York district. And Marco Rubio, who is trailing Florida Gov. Charlie Crist in a battle for the GOP nomination.html for the Senate, raised $315,000 of the $1 million in contributions he reported in the last quarter from small, out-of-state donations

Wierzbicki's PAC has come under heavy fire from activists who have charged it alternately with trying to co-opt the movement for partisan political purposes and "using the name tea party to put money in his own pockets." 

Tea Party Nation, a for-profit company that runs a social networking website for activists and is now selling tickets - at $560 a pop - to what it's billing as the "First National Tea Party Convention," has also come under fire from activists. According to the organization's website, the planned three-day convention in February is "aimed at bringing the Tea Party Movement leaders together from around the nation for the purpose of networking and supporting the movements' multiple organizations principal goal

The registration fee doesn't include lodging at Nashville's sprawling Gaylord Opryland Hotel, where the convention is being held. But it does include access to scheduled speeches by tea party heroes Rep. Michele Bachmann (R-Minn.) and Palin, whose speaking fee (reported to be in the six figures) was paid by convention organizers.

"If this were a perfect world, we wouldn't charge anybody, but to put on an event like this, there are expenses that have to be covered," said Tea Party Nation President Judson Phillips. He explained that his group is hoping to turn a profit from the event so that it can "funnel money back into conservative causes" through a 527 group it plans to set up to get involved in campaigns.

"This is the source of a lot of disagreement within the tea party movement, where a lot of people say money is a bad thing. But the simple fact of the matter is that you are not going to get candidates elected without money," he said.

"The tea party movement is a grass-roots movement; it's not a business," countered Anthony Shreeve, an East Tennessee local tea party organizer who resigned from the convention's steering committee after a disagreement over finances. "Most tea party activists won't be there because they can't afford it."

Tea Party Nation's website sells ads such as the one for a book called "Tea Party Revival: The Conscience of a Conservative Reborn," which bills itself as "an essential guide" to the movement, and also hawks Tee-shirts emblazoned with "Got Tea?"

The Tea Party Express's online store site bears only a message explaining that merchandise "was backordered due to the tremendous amount of support. Not to worry. ... you will be receiving your items soon." And a conservative Georgia-based company called Patriot Depot has offered up a wide array of movement paraphernalia, including a T.E.A. ("Taxed Enough Already") yard sign ($19.95) and personalized tea bags it promised to send to Congress before the April 15 tax deadline.

Then there are the more established - and well-funded - Washington-based conservative groups that have gotten most of their cash from big donors, but in recent months, as they've helped facilitate and organize aspects of the tea party movement, have quietly competed to add grass-roots activists to their member and donor rolls.

Many grass-roots party activists, whose local groups by and large are financed by $5 and $10 donations collected in hats passed in living rooms and coffee shops weekly around the country, resent the fundraising solicitations from national groups, said Glenn Gallas, a Hot Springs, Ark., tea party organizer.

"You just become another name on their e-mail list to ask for money from," he said.

Nonetheless, FreedomWorks, Americans for Prosperity and Americans for Limited Government - among the Washington groups most involved in offering their organizational services to local Tea Party activists - all say they've seen major spikes in membership and small donations.

It's impossible to gauge how much of those groups' funding comes from the gras-sroots versus huge individual or corporate donations, since the groups aren't subject to mandatory disclosure rules. But what is known of their finances - for example, that most of Americans for Limited Government's $4 million budget comes from large donors including New York real estate magnate Howard Rich, while Americans for Prosperity is funded in part by interests affiliated with its founder manufacturing tycoon David Koch - have yielded charges from the left that the groups are drumming up fake grass-roots' opposition to Democratic initiatives.

Adam Brandon, spokesman for FreedomWorks, a non-profit chaired by former House Republican Leader Dick Armey, said the group is seeing "just a huge number (of grass-roots tea party activists) giving" since it got involved in the movement. It has helped facilitate some of the seminal events in the movement, including the massive Sept. 12 "Taxpayer March on Washington." 

But another Washington group that co-sponsored that march and other tea party activities, the National Taxpayers Union, has not seen its donor rolls blossom during its involvement in the movement, according to spokesman Pete Sepp.

"What we were trying to do in activating these folks was first to get them involved and then, hopefully, seek their financial support," said Sepp. "One would think ‘gosh you're crazy for not hitting them up for money right away,' but we really wanted to see how we could cultivate grass-roots contacts for the long term to establish an ongoing presence in their own communities, rather than suddenly put these people on donor rolls and hit them up mercilessly," he said.

"A lot of these folks are not in a great financial position to begin with. It's one of the reasons that they're out protesting is because they're feeling the pain," he said, adding that too much of an emphasis on raising money "could potentially harm the movement, because it's a premature national initiative that doesn't have the support of the majority of we the people."

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