From NBC's Domenico Montanaro
Party faithful are paying a high price for admission -- more than
double the cost of other similar national political conventions -- to
hear former Alaska Gov. Sarah Palin speak at next month's Tea Party Nation Convention in Nashville, Tenn.
The $549 per person price tag for the sold-out
Feb. 4-6 event -- which is closed to all but a "select"
group of media friendly to the movement -- has angered some activists.
But they began to raise questions when it was revealed that, unlike
those similar national events, the organizer of the convention
registered the group behind the event -- Tea Party Nation -- as a "for profit" corporation.
The little-known organizer is Judson Phillips,
a self-described "small-town lawyer." He is a former assistant district
attorney now in private practice, specializing in
driving-under-the-influence and personal-injury cases. He is organizing
the convention with his wife, Sherry, his sister-in-law, and a handful
of other volunteers.
A background check of various public records
databases raises questions about how he has handled money in the past.
The search shows that Phillips filed for Chapter 7 personal
bankruptcy in 1999 and during the past decade, he has had three federal
tax liens against him, totaling more than $22,000.
In an interview with NBC News, Phillips
admitted to the financial difficulties. He declined to comment on the
bankruptcy, but said the federal tax liens have been paid off.
"I work for myself," he said. "Sometimes you have a good year; sometimes you have a bad year; sometimes you get a little bit behind; the government files a lien. They've been paid off. There's millions of small businesses in this country that probably one time or another have had a tax lien filed against them. All it is is a legal mechanism to make sure that the government gets paid. And they've gotten paid. Case closed."
Phillips, who said he ran in a Republican primary for a seat on the Williamson (Tenn.) County Board of Commissioners in 2002, denied that his personal finances have any bearing on his ability to be a responsible steward of Tea Party funds.
"That question is so-- that question is not asked about NBC with its advertisers or anything else," Phillips charged. "We are putting on an event that is a convention. People are paying for their attendance. It's a private event. People who are coming to it are private; people who are participating in it are all private citizens. It's not really any of anybody else's concern."
At least two public officials, however -- Congresswomen Michelle Bachmann of Minnesota and Marsha Blackburn of Tennessee -- are slated to speak. And Palin, of course, is a former governor and vice-presidential candidate. Both Bachmann's and Blackburn's congressional offices reaffirmed their intention to speak at the event in interviews with NBC News. They largely sidestepped questions of the appropriateness of the for-profit designation and Phillips' financial history. Both, instead, praised the Tea Party movement in general.
"Over the past year," Bachmann spokeswoman Debbee Keller wrote in an e-mail, "Tea Parties across the nation have shared a common goal of restoring fiscal discipline and individual liberty back into the legislative process. Unfortunately, Washington has ignored their voices by belittling their values and opinions. Congresswoman Bachmann is honored by the invitation to speak at the upcoming Tea Party Convention and looks forward to working along side so many fellow Americans to achieve these fundamental principals."
Blackburn spokesman Claude Chafin said, "We always viewed the Tea Party Nation speaking request as an acknowledgment that Marsha has a long record of fighting for the issues that are important to tea party activists: fiscal responsibility, reducing the size of government, and ending Washington's first right of refusal on your paycheck. The tea party movement in all its manifestations -- from Tea Party Nation to the tens of thousands of Americans who traveled to Washington this fall -- is energizing the Conservative cause. Congresswoman Blackburn sees this resurgence of constitutional passion as a positive development for our nation and she is excited to lend her efforts to the cause."
With regard, specifically to the for-profit aspect of the event, Chafin added, "We're flattered that you think of the hometown girl as a 'draw' equal to the party's vice-presidential nominee. If this was the only tea party event she had ever addressed, it might be an issue, but she has spoken at rallies in DC and across Tennessee."
Meghan Stapleton, Palin's spokeswoman, has not responded to an e-mail request for response.
'Not about making money'
Despite Phillips' registration of Tea Party Nation as a for-profit corporation, he denies that he's one in a line of people trying to profit off the movement.
"This is not about making money," Phillips said. He derided what he described as non-profits' "begging for money" with fundraising letters and e-mail solicitations. There are also limitations, for example, on non-profits' political activities."A for-profit corporation is not subject to any of those restrictions," he added, "so, for me, it was simply a no-brainer."
Asked if he hopes Tea Party Nation will be profitable, and he can take a salary, he said, "I'll be happy if we don't lose money. I don't think we'll lose money; I don't think we're going to make a whole lot of money. But we're not going to lose money."
Why would the convention be at risk of losing money with the price of admission and a sold-out event?
"There are costs involved in this," Phillips said, "because we're trying to throw together a first-rate convention. We want to make this a particularly good convention for the people who come here."
He identified his biggest costs as food for guests, banquet space rental (the posh Opryland Hotel in Nashville), transportation for speakers, and advertising.
Soon after Palin was named keynote speaker, rumors circulated that the admission price would go toward defraying the cost of her hefty speaking fee. Palin, who since resigning as governor, reportedly commands $100,000 per engagement and is a client of the Washington Speakers Bureau. But Palin quashed the rumors Tuesday night when she told Bill O'Reilly -- in her first interview since being named a Fox contributor -- that she would not be taking a fee for the event.
'An ax to grind'
Phillips also said he liked the idea of the "for-profit" designation, so he could be able to "generate revenue. … We can sell a product or a service."
One way of doing that is selling Tea Party merchandise. But that is something that has been its own source of controversy. Former Phillips associate, Kevin Smith -- a Web designer who helped design the Tea Party Nation Web site -- had a falling out with Phillips over the decision to make Tea Party Nation "for-profit."
Smith alleged in a scathing online account of his time with Phillips that Phillips linked a PayPal account for the merchandise to his wife's bank account.
"That's completely false," Phillips said. "There's a PayPal account that goes for the corporation. The money goes into a corporate account that is held in the name of Tea Party Nation, Incorporated."
He added, "It's very obvious Kevin has an ax to grind. He's got a motive for doing this."
But, as a result of Smith's account, one major sponsor, the American Liberty Alliance, pulled its support from the convention on Wednesday.
"To be clear, the for-profit model has its place in the movement," Eric Odom, executive director and co-founder of the alliance, wrote on the group's Web site. "Many, MANY groups in the movement operate this way. But these groups should always have boards and oversight, and should never, ever process donations through personal PayPal accounts. In this particular case, it's entirely possible that those involved are operating in a fair way. But when we look at the $500 price tag for the event and the fact that many of the original leaders in the group left over similar issues, it's hard for us not to assume the worst."
Phillips said that thinking is unfortunate and hasn't heard back from ALA -- despite his requests for an explanation.
Out of step
Nonetheless, Phillips' designation of Tea Party Nation as "for-profit," as well as his largely shutting out the press, is out of step with other similar major national political conventions.
The Conservative Political Action Conference, known as CPAC, and its liberal counterpart Netroots Nation are both non-profit entities -- and welcome the media. Phillips, who readily admits he is not a "professional" organizer, said he was overwhelmed and surprised by the worldwide media interest in his event. Phillips says that he's had so many requests for credentials that many journalists will not get in, but is working to make the event more accessible.
The organizers of those events question the Tea Party Nation's "for-profit" tag.
Raven Brooks, executive director of Netroots Nation, called the "for-profit" designation a "red flag." He said his group aims to "break even and keep everything as accessible as possible." The admission price per person for Netroots Nation is upwards of $200. There are discounted student rates and additional funding is made available to cover costs for 40 selected individuals through the liberal group Democracy for America, Brooks said.
"It seems like a lot of the groups that are doing this [Tea Party events] -- whether they are consultants or organizers are for-profit," Brooks said. "It seems like they're just trying to capitalize financially on this trend out there right now. … This [particular event] feels very profit-driven.
"Sarah Palin is there, these people are charged up, and they'll cash in."
While the conservative Tea Party Nation is a natural ideological target for liberal activists like Brooks, that's not the case for CPAC. CPAC attracts many of the same people who attend Tea Party events.
Glenn Beck will keynote CPAC this year. Beck famously championed his 9/12 Tea Party project; Rush Limbaugh keynoted it last year. Palin, however, chose not to attend CPAC this year, and has never attended -- despite the confab being a regular stop for Republicans looking to burnish their conservative bona fides and appeal to activists. CPAC, this year, takes place two weeks after the Tea Party Nation Convention.
(It was reported that Palin chose not to speak at CPAC because of questions surrounding David Keene, CPAC's and the American Conservative Union's chairman. Keene allegedly solicited more than $2 million for his groups from FedEx in order to shore up support for legislation that would have favored the shipping giant over rival UPS. Keene has also been critical of how Palin dealt with the press during her 2008 vice-presidential run as well as her subsequent abrupt resignation as governor.)
Like Netroots, CPAC, which has a policy of not paying speakers, charges approximately $200 and up to attend. But the goal, organizers said, is to make the event as accessible as possible to draw young people.
"CPAC has never been a 'profit-making' or 'money-driven' enterprise," Keene said in a written statement. "I always tell the story about when Ronald Reagan leaned over to me at dinner after his election and said that the reason he would always come to CPAC is that it was the one place that activists could afford to get together, hear the people for whom they work in campaigns, exchange ideas, etc and said the one thing he hoped he could ask of us was that we'd never change that; that we'd keep it affordable so that it would never be limited to the wealthy. That was a promise I made him."
Ultimately, though, whether it is appropriate for Tea Party Nation to be "for profit" is a "question for the people attending the event and what they think about it," said Fred Wertheimer, president of the watchdog group Democracy 21. "There's no outside set of rules or parameters." He added, "The idea that someone's around trying to make money off something is not a new concept. The test here is if people know about it, and they want to attend the event, that's their call. It is important, however, that people are made aware that this is a for-profit operation before deciding whether to attend the event."