Jeff Larson used RNC piggy bank to pay friends

Did use of charitable donations violate federal election law?

On a September evening in 2009, a few dozen guests, many of them Minnesota's most elite, filed into a private party at the Radisson Plaza Hotel in downtown Minneapolis.

It was a night for expensive suits and classy business skirts. A pricy arrangement of flowers from Pazzobello decorated the banquet hall. Reception Jazz, a local three-piece ensemble, played quietly in the corner to complete the mood.

It had been a full year since the Republican National Convention left the Twin Cities, and for the evening's guests, there was reason to celebrate. The 2008 election may have been a loser for Republicans, but the convention itself was an enormous success, and many of the people at the Radisson that night had helped make it happen.

As the CEO and treasurer of the committee, Jeff Larson was paid $400,000 after the convention
AP Images/Jim Mone
As the CEO and treasurer of the committee, Jeff Larson was paid $400,000 after the convention

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All told, the party cost more than $45,000. Funding came from tax-deductible donations paid to the 2008 Republican National Convention Host Committee. After the convention debts were paid, the committee still had more than $7 million in the piggy bank. Some of this would go toward resolving final business for the convention, but the majority was a surplus.

The RNC Host Committee continued to pay out enormous sums of money from the surplus long after the convention. Throughout 2009, the committee chief of staff expensed meals, car rentals, and flights, while receiving more than $130,000 in salary and benefits, according to Federal Election Commission records. He also drew a six-figure salary in 2010.

Other payments went to Republican operatives, political fundraisers, and former staff members of the committee.

The pattern of spending made so long after the convention is unusual, according to campaign-finance experts who reviewed the expenses at our request. Many of the payments could be in violation of FEC law, says Craig Holman, a researcher for watchdog nonprofit Public Citizen.

"There are a series of questionable—and long-term—expenses documented in the host committee reports," says Holman. "It is very surprising that people seem to still be making a profit off the convention two years later."

The RNC committee's spending is in stark contrast to the host committee for Denver's 2008 Democratic National Convention, which officially dissolved in early 2010, donating its surplus to charity. The Denver committee paid about $95,000 to staff members since the beginning of 2009—$84,000 of which went to an accountant who was tying up necessary loose ends.

Meanwhile, Minnesota's RNC host committee has paid eight times that to individuals, totaling about $760,000, according to FEC reports. The most recent salary payment of $10,000 was made to a staff member earlier this year.

"It's sort of like paying your wedding planner two years after your wedding," says Dave Levinthal, an analyst for the Center for Responsive Politics.

The financial activity might also be a violation of the law, says David Schultz, a legal professor and campaign-finance expert at Hamline University.

"It sounds more like what they're doing at this point is using a shell as a way of trying to covertly undertake some kind of political activity," Schultz says.

   

ONE OF THE most powerful Republicans in the country needed a lift to the airport.

It was October 2005, and Republican National Committee Chairman Ken Mehlman was wrapping up breakfast at the Downtowner in St. Paul with Gov. Tim Pawlenty. Also at the table was Tom Mason, the governor's chief of staff.

Mason offered to drive Mehlman to the airport. During the ride, Mehlman remarked on the beauty of the landscape. It was then that Mason realized he might at long last fulfill his ambition to bring the Republican National Convention to the Twin Cities.

After dropping off Mehlman, Mason knew just who to call: Jeff Larson.

Then in his mid-40s, Larson was already one of the most well-connected Republican strategists in the country. Unlike many political operatives, Larson climbed the ranks of the Republican Party almost entirely behind the curtain, successfully dodging the harsh media glare throughout his career.

"He really is a person who came up through the trenches in the Republican Party," says former Congressman Vin Weber (R-Minn.). "He started out just doing basic volunteer work and showing up at low-level functions, and he's risen to the top. I mean, he's been successful in business, successful in politics, and now he's one of the most trusted people in the Republican Party hierarchy."

If there was one man who could clinch the Twin Cities as host of the Republican National Convention, it was Larson. Hosting the convention had also been an aspiration of Larson's for decades. So when Mason called Larson to tell him the news, Larson was already working on pitching the Twin Cities as the host site.

In order to bring the convention to town, Mason and Larson would first have to prove the Twin Cities well-equipped to handle an event of such magnitude. This would mean putting political differences aside and getting support from the Democratic mayors, namely Minneapolis Mayor R.T. Rybak and St. Paul Mayor Chris Coleman.

Convincing the mayors to help wasn't a hard sell. Hosting a national political convention is good business for everyone. In 2004, the Republican National Convention earned New York hundreds of millions of dollars in revenue. A national convention also brings priceless media exposure.

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