Tea Party Consultants, Sarah Palin, Herman Cain Fleecing Right's Small Donors
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On July 20, hours after the horrific shooting in Aurora, Colorado, the Campaign to Defeat Barack Obama sent an email to supporters with the subject line "OUTRAGEOUS: Media Tries to Blame Tea Party for Colorado Shooting."
"We can't let the media get away with their attempts to smear the tea party," the email read, with a link to a Breitbart.com story claiming ABC News "tried to falsely blame the tea party for the Colorado massacre." (What actually happened is that in the scramble to ID the killer, ABC briefly noted it had found a profile of a man on a Tea Party website with the same name as the shooter and in the same city.) "Please help us fight back by supporting the most prominent tea party candidate in America right now -- conservative Republican Ted Cruz. CLICK HERE to CONTRIBUTE."
This brazen effort to raise money off of the Colorado shooting tragedy, taken alone, is disturbing. Even the Cruz campaign has called it "inappropriate." But what makes this fundraising appeal from the Tea Party Express-spinoff "Campaign to Defeat Barack Obama" even more egregious is that the dollars raised will disproportionately flow into the pockets of the group's leaders.
Latching on to Tea Party Energy
In 2009, as groups around the country were organizing what they called "tea parties" on tax day to protest government spending, Joe Wierzbicki, a senior associate at the right-wing political consulting firm Russo Marsh & Associates, developed a proposal for a "Tea Party Express" to latch onto the movement's energy.
His plan featured a "proper luxury coach wrapped in a 'tea party' graphical design" that would make stops in dozens of cities represented by vulnerable Democrats in Congress. Under the guidance of Wierzbicki and Russo Marsh's Sal Russo, the Tea Party Express soon developed into a major financial supporter of far-right candidates and a visible presence in the movement.
Wierzbicki, Sal Marsh, and their consulting firm Russo Marsh were among an array of Republican apparatchiks and deep-pocketed ideological interests to capitalize on the Tea Party's grassroots energy and help direct it towards propping up big business and the Republican establishment. But what makes Wierzbicki and Russo Marsh unique is the degree to which they capitalized on the Tea Party energy for personal financial gain.
In the runup to the 2010 midterms, a majority of the funds raised by Tea Party Express went to Marsh and his company for consulting fees and to pay for advertising and other expenses. "Political action committees must spend money to make money, typically hiring staff members from the organizers who created the group," the New York Times wrote at the time. "But it is less common for them to funnel most of their outside spending through a vendor controlled by a committee executive, as Mr. Russo has done."
The Campaign to Defeat Barack Obama (CDBO) formed in 2011 and appears to be operating from the same playbook, but with Wierzbicki at the helm. As the name suggests, CDBO's claimed purpose is to defeat President Obama, but their campaign activities thus far have largely focused on recall battles in Wisconsin. And their spending has disproportionately benefitted Wierzbicki and Russo Marsh.
73% of Funds Raised Go to CDBO Leaders, Consulting Firm
CDBO, a Political Action Committee (PAC) registered with the FEC, reports that it has raised $1,242,360 in the first half of 2012, much of it from small donors giving $50 or $100. (It has spent about the same amount during that period, $1,216,665.) CDBO seems to raise these funds through a steady stream of broad-based fundraising appeals like email blasts and online ads, which warn people of the dangers of a second term for President Obama, and suggest the best way to make Obama a one-term president is to donate to CDBO.
A recent CDBO telethon fundraiser featured guests telling viewers that the president plans to "build some kind of cult...in the public schools" and another saying that "what Obama may do next may prove fatal to the Republic" and that "to say that all you can do...is go and cast your vote is a dereliction of duty. What people need to do is pick up the phone and donate to your PAC." During the Wisconsin recall, CDBO raised money for its Wisconsin ads by asking people to "support Scott Walker, beat back Obama's minions and DEFEAT the RECALL."
In the post-Citizens United World, where Sheldon Adelson makes $20 million dollar donations to Super PACs, and Koch donor summit attendees pledge millions towards election spending, CDBO's small-dollar fundraising may seem quaint. And in contrast with the deep-pocketed donors whose political spending is likely intended to buy influence and curry favor with elected officials, it seems believable that the individuals who make $50 or $100 donations to CDBO are genuinely spooked by CDBO's anti-Obama fear mongering and send money to help the cause.
Unfortunately, it looks like these Tea Party donors are getting played. The majority (seventy-three percent) of the funds raised by CDBO in the first half of 2012 has gone to CDBO Executive Director Joe Wierzbicki, his consulting firm Russo Marsh, and CDBO Vice-President Ryan Gill. More than thirty-three percent of the dollars CDBO raised from the Tea Party faithful has gone into the pockets of Wierzbicki and Gill, largely for "fundraising commissions" or "consulting fees."
"DEFEAT the RECALL" and "win this one for 'The Gipper'"
Some of the first ads CDBO ran after forming in 2011 aired in Wisconsin to support Governor Scott Walker during protests over his plans to limit public sector collective bargaining. The group ran additional ads that summer to support Republican senators facing recall, praising Walker and the Republican senators for providing "the adult leadership Wisconsin needs to restore fiscal responsibility" and criticizing "Barack Obama's political allies" for "trying to recall the Republican senators" and ending with the message, "tell Barack Obama and his liberal hacks we reject their liberal intervention." CDBO Chairperson Lloyd Marcus boasted that the group spent $100,000 on their summer recall campaign.
The following spring, CDBO ran at least four ads on Wisconsin television to support Governor Walker in the runup to his June 5 recall election. The first two ads praised Walker and criticized Obama for "fiddling in Madison," but as the election drew near, the ads focused more exclusively on supporting Walker. One ad included CDBO President Mary Pearson (who lives in California) telling viewers "Governor Walker's reforms are working here in Wisconsin." Another ad featured Ronald Reagan's son Michael, who claimed that Walker is "getting people back to work in Wisconsin" and telling viewers to "win this one for 'The Gipper.'"
Funds Raised to Support Walker, but also Enrich CDBO Leaders
Because some of the ads attacked President Obama, a federal candidate, CDBO reported the expenditures to the Federal Election Commission (FEC). Their filings for April and May of 2012 showed the group spending $59,748 on TV ads in Wisconsin, much of which went to Wierzbicki's consulting firm Russo Marsh, as well as a reported debt of $74,406 to the firm for prior independent expenditures in Wisconsin. Last year, CDBO also reported to the FEC that it spent $205,518 on advertising in Wisconsin; around three-quarters of that total was spent in August 2011, near the time of Wisconsin's Senate recalls, and the other quarter was spent in late 2011, as activists began circulating petitions for Walker's recall. Sixty percent of the total amount spent in Wisconsin in 2011 ($123,596) went to Wierzbicki's Russo Marsh.
Despite reporting at least some spending to the FEC, the total amount CDBO spent in Wisconsin or raised during that period is not known because the group never registered with Wisconsin's Government Accountability Board. Only expenditures relating to a federal candidate are reported to the FEC, but amounts raised and spent in support of state-level candidates are supposed to be reported to state election authorities. CDBO told the FEC that its ads in Wisconsin were in opposition to President Obama, without reporting that the same ads also supported Walker, and never disclosing to any election agency about the other ads that supported Walker exclusively. This means CDBO could have raised even more than what has been reported, and that even more of the funds raised might have gone into the pockets of Wierzbicki, Russo Marsh, or Gill.
In June, the Center for Media and Democracy filed a formal complaint against CDBO for apparently violating Wisconsin election law by failing to register with Wisconsin's elections board and disclose its funding and spending. The group has still not reported its expenditures.
Although CDBO has focused much of its activities on Wisconsin, it also waded into the special election in New York's 9th Congressional District last fall and ran ads opposing Mitt Romney in the GOP presidential primary called "Liberal Mitt's Latest Hits."
FEC Filings Show Wierzbicki, Other Officers Lining Their Pockets with Fees
A review of CDBO's filings with the FEC from January 1 through June 31 of this year demonstrate that the PAC's leaders are profiting significantly from the group's aggressive fundraising.
During that half-year period, Wierzbicki received $227,032 from CDBO (18.3 percent of what was raised). Of that total, he received $114,892 in fundraising commissions -- which means he took a 9.25 percent cut from the dollars raised during that period. He was also paid consulting fees. And he was reimbursed for travel and lodging, plus given several thousand for "Facebook advertising." His fees appear to be in addition to whatever salary he may earn as Executive Director of the organization.
Other CDBO leaders are also profiting from CDBO's aggressive fundraising. In just the first half of 2012, CDBO Vice-President Ryan Gill has received $183,468 in consulting fees, fundraising commissions, and payments for online advertisements, which is almost 15 percent of the total raised in that period.
Additionally, Russo Marsh & Associates, where Wierzbicki is a principal/partner, has been paid $500,504 for the first half of 2012, or 40.3 percent of the amount raised. This includes $164,368 in payments for blast fundraising emails (many of which support or oppose candidates but are not classified as independent expenditures), and $252,185 in payments for advertising, plus payments for travel and consulting fees.
"That kind of self-dealing raises red flags about possible lax oversight and excessive fees for the firms," campaign finance experts told the New York Times about the nearly identical relationship between Russo Marsh and the Tea Party Express in 2010.
Of the $1,242,360 raised so far in 2012, Wierzbicki has taken an 18 percent cut, Gill has taken 15 percent, and Russo Marsh has received 40.3 percent -- which, all together, means they took more than seventy-three percent of the total amount raised.
Cain, Palin Operating Similar Ruse
Former presidential candidate Herman Cain appears to be operating a similar scheme. The Washington Times reported last week that "Cain Connections," the Super PAC operated by Cain and his former campaign manager Mark Block, had been soliciting donations to support Governor Walker in his recall election, but never reported any expenditures on Walker's behalf or to support any other political causes or candidates. Sarah Palin's PAC did the same thing, raising $600,000 in the second quarter of this year, mostly from small donors, but giving only $15,000 (less than 3 percent) to support candidates, while spending $355,000 to mail out fundraising appeals that brought in those donations.
"Donors are deceived into giving to these organizations [without knowing that they are really] generating funds for the group's political operative leaders," Sheila Krumholz, Executive Director of the Center for Responsive Politics, told the Center for Media and Democracy.
Krumholz notes that groups like these have largely escaped scrutiny because focus is usually directed towards their funding, rather than how they disburse money. "Spending is often considered less worrisome than the source of a campaign's largesse," she says. Additionally, "the FEC doesn't require clear categorization [of expenditures], or disclosure of connections between groups or the likelihood of personal financial gain."
In any case, the average Tea Party supporter making a $50 or $150 CDBO contribution to fight back against the media's purported effort "to falsely blame the tea party for the Colorado massacre," or (as the group's name suggests) to defeat Barack Obama, would likely be disappointed to learn that a big percentage of their contributions are really going to support CDBO's political operative leaders.
"It's a ruse -- to line the pockets of the campaign or those associated with the campaign," Krumholz said of groups like CDBO.
Read more about the Center for Media and Democracy's complaint against CDBO for the group's activities in Wisconsin here.