Tea Party Fundraising PACs Surge, but Cash Comes Slowly

June 17, 2010 -- The "Tea Party" movement that's staging rallies and shaking up GOP primaries with its anti-tax, anti-establishment message is using at least one conventional approach to politics: Its backers have established more than 30 committees to collect campaign cash to influence elections.

A dozen political action committees bearing the Tea Party name have been created since July 2009, filings with the Federal Election Commission show. Another 24 fundraising committees have been established with the IRS. Those groups, known as 527s for the section of the tax code under which they operate, can raise unlimited amounts of money for their political activity. Political action committees can collect no more than $5,000 a year from an individual.

Although the groups are proliferating, records show most haven't raised much money. Their leaders say they are building the political groundwork to aid Tea Party-backed candidates up and down the ballot in November -- from local sheriffs' races to congressional contests.

The new fundraising operations show that Tea Party activists "are serious ... and understand that parties, including small upstart parties, need money," said Costas Panagopoulos, director of the Center for Electoral Politics and Democracy at Fordham University in New York.

"At some point in time, rallies are enough. How many more signs can you make?" said Mark A. Skoda, who started the Memphis Tea Party PAC last year. "In order to change the political system, we have to be involved in the political system."

That sentiment also drove the Independence Hall Tea Party Association, which is active in New Jersey, Delaware and Pennsylvania, to launch its political action committee in February.

Since then, it has raised enough money to donate $1,000 to Republican businessman Tim Burns in advance of the Pennsylvania's May 18 special election to replace late Democratic Rep. John Murtha, said Don Adams, a part-time meeting planner from suburban Philadelphia who serves as the PAC's president.

Burns lost the special election, but is the Republican nominee in November's election.

Over Memorial Day weekend, Adams said, the group also staged an online "Donate-A-Thon" that sent "several thousand dollars" to Anna Little, a New Jersey Republican hoping to oust Rep. Frank Pallone, an 11-term Democrat. Little won this month's primary by 84 votes.

"We want to stop the Obama agenda, and the best way to do that would be to the change the face of Congress," Adams said.

The Tea Party-affiliated PAC raising the most — $4.4 million so far in this election cycle — is not led by political upstarts. Its top officials are veterans of GOP politics, including Sal Russo, a Sacramento-based consultant who was an aide to Ronald Reagan when he was California governor. The group was organized in 2008, as Our Country Deserves Better PAC to oppose Obama's presidential campaign before launching national "Tea Party Express" bus tours and adding TeaPartyExpress.org to its name.

Russo is the PAC's chief strategist and nearly $1.5 million — or about a third of the PAC's spending through the end of April — was paid to Russo's firm, Russo Marsh, and an affiliated company, according to campaign filings compiled by CQ MoneyLine.

The largest part of the money did not remain with the firm, but went to third-party vendors, Russo said. "Every single nickel is accounted for," he said. Even more important, Russo said, the group's work is paying off with wins at the ballot box. The PAC, for instance, spent more than $500,000 to help Tea Party favorite Sharron Angle, who won the June 8 Republican primary in Nevada for the U.S. Senate.