$9.5 million raised, at a cost of $8 million, with less than $400,000 going to candidates.
What would you consider a charity that raised almost $10 million, but actually used less than 5% of that total on its mission and programs? By every reasonable definition, you’d have to consider it woefully ineffective, at best, a fraud, at worst.
Consider then that the Tea Party Express has raised just over $9.5 million between January 1, 2013 and June 30, 2014, but has spent barely $380,000 directly, or indirectly, to benefit the candidates they support. Also, as they spent more than they received, their cash-on-hand decreased by almost $350,000; from $848,000 on January 1, 2013 to $498,000 on June 30, 2014.
The direct costs for raising that $9.5 million were more than $8 million, or 85% of total receipts, with more than $3.6 million paid out to Tea Party Express founder, Sal Russo’s consulting firm Russo, Marsh and Associates.
Expenses by Top Six Categories
The amounts shown, above and below, were obtained directly from the financial disclosure reports filed by the Our Country Deserves Better PAC, and categorized using the stated purpose of each disbursement reported.
Expenses by Top 12 Payees
In the 18-month period, the total of direct contributions and independent expenditures, made to or on behalf of their allegedly supported candidates, was a mere $381,098. As a category, candidates rank third behind fundraising ($6,119,408) and postage ($1,996,711); and as a payee, candidates rank eighth behind four fundraising payees and three postage payees.
Notice also there are no disbursements for any “issue-based” ads or media buys. Tea Party Express doesn’t seem too interested in getting their message out. In fact, it seems the only thing they truly care about, and put effort into doing, is getting their donors cash into their bank account.
The organization’s mission statement, excerpted from their website, reads:
Propelled by millions of Tea Party supporters across the country, Tea Party Express has become the most aggressive and influential national Tea Party group in the political arena. We are 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 a fundraising (of course) email sent on Saturday, they try to make clear what their priorities are:
Alaska, Montana, South Dakota, Louisiana, Arkansas, North Carolina, and West Virginia are priorities for us this election cycle.
With a conservative majority in the Senate, we will be able to finally move direly needed meaningful reform through both chambers of Congress, block President Obama from continuing to appoint liberal judicial nominees in his last two years, and by electing more TRUE fiscal conservatives to the Senate, we will have an even stronger voice in the direction of our party.
It is awfully curious then, that despite their stated purpose – per their FEC filings – Our Country Deserves Better PAC has not provided a single dollar in value to any senate candidate from Alaska, South Dakota, Louisiana, Arkansas, North Carolina or West Virginia. Records do show they contributed a total of $10,000 to Steve Daines’ campaign in Montana, but given how much they collected from donors, and the kind of money it takes to actually win elections, that’s a paltry sum indeed.
In fact, the $270,168 reported as independent expenditures (part of the aforementioned $381,098 total) benefited Steve Lonegan (NJ) in 2013, and Chris McDaniel (MS), Owen Hill (CO), and Karen Handel (GA) in 2014. Maybe there is a newfound zeal to step up for the likes of Dan Sullivan or Mead Treadwell, Mike Rounds, Bill Cassidy, Tom Cotton, Thom Tillis and Shelley Moore Capito; however if past performance is the best predictor of future behavior it’s far more likely that the email is just more hollow rhetoric designed to keep the money flowing in; and if it’s not a fundraising scam, then they’ve clearly demonstrated an alarming level of ineptitude when it comes to their ability to use that money to help the Republicans take back the senate majority.
Although there are obvious differences between a charity and a quasi-political organization, from a donor’s perspective there’s one thing they can reasonably expect from both: that a significant portion of every dollar donated is actually going toward the stated mission and purpose of the fundraiser.
Charity Navigator, a highly regarded watchdog of charitable organizations, explains what donors should look for from a legitimate charity, in the use of monies for their stated purpose and the cost of fundraising:
The majority of charities listed on our site – seven out of ten non profits – spend at least 75% of their expenses directly on their programs. That means the organization should spend no more than 25% of their total expenses on administrative overhead and fundraising costs combined.
Tea Party Express has basically turned those numbers upside-down, and even then they still come up way short with less than 5% actually being spent on their “programs.” It’s time donors to organizations like this start doing a little research and consider making direct donations to campaigns, and eschewing self-serving organizations with an apparent maximum-money-in with minimum-money-out attitude.
Sal Russo has a history of questionable financial practices
This isn’t the first time Sal Russo has faced scrutiny; he has been involved with other organizations besides Our Country Deserves Better PAC, and they too have faced serious questions about their internal financial practices.
In a very thorough piece of investigative journalism, written by Kim Barker, and published last Tuesday at The Daily Beast, a charity called Move America Forward was exposed as having handled donor money in a similarly questionable manner.
The driving force behind Move America Forward is Sal Russo, 67, the longtime political consultant who is listed on the 10-year-old charity’s tax returns as chief strategist.
Russo is better known for helping to form the Our Country Deserves Better PAC, also known as the Tea Party Express, one of the largest Tea Party groups in the country.
The article goes on to identify one questionable action after another, with some pushing the boundaries of ethics to the point of bordering on the illegal. There’s no question Russo was involved in these as well; in fact, Barker exposes an operation with remarkable similarities to the Tea Party Express.
Charities like Move America Forward, which accept tax-deductible donations, are not allowed to engage in partisan politics like other nonprofits, such as trade associations and social-welfare groups. Charities are also not allowed to pay excessive fees or wages to staffers or consultants, according to federal tax rules.
But an examination of Move America Forward’s tax returns shows that it is deeply intertwined with Russo’s political enterprises and businesses, paying millions of dollars to him and his consulting firm.
According to its five most recent tax returns, Move America Forward paid out more than $2.3 million to Russo or Russo, Marsh and Associates for services including “program management and advertising.” That’s about 30 percent of the charity’s overall expenditures over that time.
Move America Forward is by no means the only dubious charity out there; and Tea Party Express and their Our Country Deserves Better PAC is not the only political organization that has morphed from being a grassroots advocacy organization in 2009 to a fundraising machine today; others have also lost sight of their real mission, with little or no true regard for their donors. However the fact that they are not alone should make their behavior that much more appalling to donors.
Whether you call them “scamsters” or the “grifting wing” it’s high time that good people, who really are looking for honest change in America, know exactly where their money is going, or in this case, not going.