Jeff Larson used RNC piggy bank to pay friends

Did use of charitable donations violate federal election law?

A few months later, Larson helped start a committee with Tina Smith, Rybak's chief of staff. The newly formed committee put in bids to host the Republican and Democratic National Conventions.

"They really decided to make the bid not about politics, but about business," says Erin Dady, who was St. Paul's marketing director at the time.

In September 2006, the announcement rang out: St. Paul would host the Republican National Convention. On the heels of this news, it was also announced that Larson would be treasurer for the event's host committee.

Steven Cohen


"He was the guy that was instrumental in making that happen," says Mason. "He was the guy who made that happen."

On January 23, 2007, Larson officially filed the incorporation papers to head the Minneapolis-St. Paul 2008 Host Committee.


ON THE MORNING of June 6, 2007, Pawlenty hosted a breakfast at the governor's mansion in St. Paul. The governor had sent out invitations to 110 corporate CEOs, but because the meeting had been hastily thrown together on short notice, only about 25 company leaders made the trip.

The meeting was a sales pitch: It had been more than 100 years since the Twin Cities last hosted the Republican National Convention, and this was our time.

In order to help the cause, Pawlenty was relying on his guests. He expected local Fortune 500 companies to pitch in at least $1 million. From smaller businesses, he was asking half a million.

It was only a few months after Larson filed the incorporation papers, and the host committee was already struggling to raise money. Of the funds needed to host the convention, a total of $66 million would come from taxpayer dollars—$16 million from a federal earmark, and $50 million in national security and anti-terrorism expenses.

But the host committee had promised to bring in $58 million in donations. When Larson's committee banged the drum, Pawlenty helped with the heavy lifting.

By summer, all 10 spots on the host committee's board had been filled. Joining Larson on the committee were some of the biggest CEOs in the state. Among them were broadcasting magnate Stanley Hubbard, Douglas Steenland of Northwest Airlines, and Jay Fishman, CEO of Travelers Companies Inc.

When it comes to fundraising, host committees are something of a Wild West. Designed to raise and spend tens of millions of dollars in a short period of time, committees are funded through unlimited tax-deductible donations from individuals and corporations.

"The simple fact is these host committees have a lot of latitude to raise and spend money, provided that they don't cross the IRS's rules," says Paul Ryan, an expert at the nonprofit research group Campaign Legal Center. "They have a lot of latitude under federal campaign finance law to raise and spend money, pretty much however they want, as long as they're reporting it."

As Larson prepared for the convention, he also had to deal with a major PR problem. Larson's telemarketing firm was accused of making illegal robo-calls accusing Barack Obama of associating with terrorists.

An exposé also found he had rented a D.C. apartment to his close friend, Norm Coleman, and allowed Coleman to lapse on rent payments. When Larson was interviewed about his rent arrangement with Coleman in April 2008, Larson's work as CEO of the host committee came up. At the time, he explained he was working full-time on the committee for free.

It later came out that during this time Larson had spent hundreds of thousands of dollars on clothes for Sarah Palin's family at high-end retail stores. Larson was later reimbursed by the RNC for the expenses.

By the time of the convention, Larson had managed to pry open the wallets. Between Pawlenty, Larson, and a team of well-paid private fundraisers, the committee landed huge donations from some of the biggest corporations in the state, including $3 million from Target Corp., $2.9 million from Qwest, and $2.2 million from Best Buy.

In total, Larson's committee raised $65 million—$7 million more than its goal.

The last night of the Republican National Convention, presidential nominee John McCain addressed a crowd of more than 20,000 in the Xcel Energy Center. After a speech that lasted nearly an hour, McCain ended with one last call to action.

"Stand up! Stand up and fight!" he bellowed as the crowd erupted in booming applause. "We never hide from history! We make history! Thank you, and God bless you, and God bless America!"

Cue John Rich's country song "Raisin' McCain" and thousands of red, white, and blue balloons falling from the sky.

Larson had pulled it off. The convention was over, and despite some scuffles between police and protestors, the event was widely regarded as a huge success.

But for Larson and his host committee, the work wasn't quite finished. Hundreds of thousands of dollars in bills still needed to be settled. There was an internal audit to finish, and preparation for the extensive audit by the FEC.

Meanwhile in Denver, the host committee for the Democratic National Convention was in the same position.

"We still had some money to distribute from our host committee, and some logistics to close out," says Mike Dino, CEO of the Denver committee. "There's a lot to do after it's over immediately. It begins to certainly scale back."

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