Last week, an urgent fundraising email from the Tea Party Express PAC raised a few eyebrows in the campaign finance community.

“We just got off the phone with the McDaniel campaign and they need our help!” Sal Russo, the group’s chief strategist, wrote in the opening line.

The problem? The Tea Party Express raises major money — $8.5 million so far this cycle — from lots of grassroots donors with the promise it will be put to use helping upstart conservative candidates fight the GOP establishment. But outside groups that drop big bucks on campaign advertising aren’t supposed to be coordinating strategy with candidates. That’s why the email’s phrasing caused some chatter.

Help us keep government accountable by making a donation today.

Russo and Tea Party Express Executive Director Taylor Budowich were quick to tell a National Journal reporter they hadn’t coordinated with the campaign:

“We congratulated the campaign on winning the primary,” Budowich said of the phone call. He said the McDaniel campaign did not ask for any assistance. “There probably should be a period there, but it’s two separate statements,” he said. “… It’s not the campaign asked us for our help.” “The law says we cannot coordinate expenditures,” Budowich continued, “You can communicate with a campaign. You can’t coordinate expenditures. Completely, two different things.”

Budowich’s interpretation is correct, barring other evidence that he and the campaign planned things out. If there wasn’t a discussion of a specific strategy for how the Tea Party Express could help McDaniel, there was, technically, no coordination.

Another reason this may not be much of a problem? There’s no coordination if the money is never spent.

Despite the gung-ho email promising big action in response to the McDaniel campaign’s needs (“The Tea Party Express is going all in and heading down to Mississippi”), FEC filings show that while the group may be really good at raising money, it’s not so good at spending it on behalf of candidates. What it seems to excel at is paying Russo.

Tea Party Express offloads money with ease — it has spent $8.6 million this cycle, more than the $8.5 million it has raised — and ranks 16th among the 20 biggest spending PACs this cycle (a list that includes super PACs). But it’s nowhere near the top 20 when it comes to giving to candidates or making the most sizable independent expenditures.

Most of the $8.6 million went for fundraising, salaries and administrative costs — about $6.6 million. By far the biggest recipient was Russo’s own consulting firm. In fact, so far this cycle, Tea Party Express has paid $2.7 million to his company.

It’s a recurring pattern. In 2012, Tea Party Express raised $10.1 million and spent $8.3 million on fundraising, salary and administrative costs — including $3.1 million for Russo’s firm, or about 85 percent of the total raised. In 2008 and 2010 the share of the total raised that was spent on these costs was much lower, but still high (53 percent of $7.6 million in 2010 and 40 percent of $1.3 million in 2008) as was the amount paid to Russo’s firm ($668,000 in 2010 and $349,000 in 2008).

This is also not the first time questions have been raised about the group’s spending and the amount paid to top individuals within the organization. In 2010, Russo responded to queries from the New York Times by explaining that much of the money being sent to his firm was reimbursement for advertising and other costs. Earlier, in 2009, a Tea Party Express rep told the American Spectator that a large sum paid out to Russo’s firm was to cover legitimate campaign expenses, including ads the group ran against Senate Majority Leader Harry Reid (D-Nev.) FEC records show the group did spend heavily against Reid.

But, so far in 2014, there’s no evidence of any of that kind of spending. Even if the money is reimbursement for political costs — like making an independent expenditure — Tea Party Express would still have to report those payments. In 2014, only $208,000 has been reported to the FEC as a political expenditure — $161,000 in independent expenditures (none of it for McDaniel) and $46,000 for donations to campaigns (including $5,000 to McDaniel’s campaign.) And in this cycle, at least $2 million of the money paid to Russo’s firm is explicitly labeled as fundraising work and another $229,000 is for “consulting.” The rest of the money is mostly labeled as being for “administrative” costs or travel, meals and hotels.

One striking thing about the fundraising Tea Party Express does is that so much of it is from small donors. Committees are not required to break out the names of donors who give less than $200, and compared with many of the most active committees and many congressional campaigns, nearly all of Tea Party Express’ cash comes in from these donors. But an analysis of how the group raises its money compared to how it spends its money shows that over the years, as it has had increasing success with fundraising from small donors, it has spent less and less of its money on direct political costs (contributions to candidate campaigns or independent expenditures on their behalf).

Tea Party Express is hardly alone in exhibiting this pattern, but few have done it to the degree that Tea Party Express has. Another group with a similar name, Tea Party Patriots Citizen Fund, has raised a similar amount of money — $8.9 million, of which 74 percent came from small donors — but has only spent $947,000 (about 10.6 percent) on political costs. However, in the case of Tea Party Patriots, the group has already spent heavily on ads attacking Cochran and in favor of McDaniel.

Other conservative PACs involved in the McDaniel/Cochran race have much higher ratios of money spent on politics. Citizens United, the PAC for which the landmark 2010 court case is named, has numbers that are virtually the opposite of Tea Party Express’s. So far this cycle, Citizens United has raised 97 percent of its $1.5 million from small donors, yet has spent 60 percent of that sum on direct political costs — including $294,000 on independent expenditures supporting McDaniel.



For permission to reprint for commercial uses, such as textbooks, contact the Center: Feel free to distribute or cite this material, but please credit the Center for Responsive Politics.For permission to reprint for commercial uses, such as textbooks, contact the Center: [email protected]





Support Accountability Journalism At OpenSecrets.org we offer in-depth, money-in-politics stories in the public interest. Whether you’re reading about 2020 presidential fundraising, conflicts of interest or “dark money” influence, we produce this content with a small, but dedicated team. Every donation we receive from users like you goes directly into promoting high-quality data analysis and investigative journalism that you can trust.Please support our work and keep this resource free. Thank you. Support OpenSecrets ➜