Nonprofit, nonpartisan journalism. Supported by readers.


Republican National Convention hosts about to deliver hefty thank-you gift to Minnesotans

Nearly $7 million in leftover funds raised by the Minneapolis/St. Paul 2008 Host Committee for last year’s national gathering will soon be headed to three local foundations:  the St.

McCain and Palin families
MinnPost photo by Bill Kelley
Arizona Sen. John McCain and Alaska Gov. Sarah Palin launched their fall campaign at the 2008 GOP national convention in St. Paul.

Just a year after wrapping up their Republican National Convention business, organizers are about to present the host cities with a hefty thank-you gift.

Nearly $7 million in leftover funds raised by the Minneapolis/St. Paul 2008 Host Committee to help stage last year’s national gathering will soon be headed to three local foundations.

The committee, which raised $54 million for the convention, will disband in the next month or two and turn over its remaining money — an estimated $6 million to $7 million — to the St. Paul Foundation, the Minneapolis Foundation and the Minnesota Community Foundation.

Leftover funds to foundations
Whatever’s left — which Host Committee officials estimate to be between $6 million and $7 million — will go to the foundations, 40 percent each to the Minneapolis Foundation and St. Paul Foundation and 20 percent to the Minnesota Community Foundation.

“This is an amazing gift, coming at an important time,” said Carleen Rhodes, president and CEO of the St. Paul Foundation and the Minnesota Community Foundation. “The bipartisan [Host] Committee recognized that it was important that the whole state get some of the resources, so we’re an intermediary to move the money to lots of places where it can do the most good.”

She said the underlying decision was “to move the money to as many nonprofits as possible, because they are struggling in these challenging times.”

The money for her two foundations will go to:

• Community Relief Fund, which provides grants on key issues like hunger, affordable housing, financial counseling, health and mental health issues and job training, in the East Metro and statewide.

• The 2010 grant-making budget, to provide more resources for the foundations’ regular efforts,

• A management improvement fund, which helps nonprofits develop marketing and business plans.

• $100,000 each to six Initiative Foundations around the state.

• Two e-technology efforts, one that lets donors give online to all kinds of nonprofits,and the other to enhance civic engagement.

The Minneapolis Foundation will use funds from the RNC Host Committee over the next three years to support its new strategic priorities of transforming education, promoting economic vitality, and building social capital. The funds will be allocated to grant-making and community leadership activities.

“This is a wonderful legacy from the Republican National Convention Host Committee. It will allow the Minneapolis Foundation to expand our ability to positively impact our community through these financially challenging times and make a lasting impact in Minnesota,” said Sandy Vargas, president and CEO of the Minneapolis Foundation.

Bonus for unpaid committee CEO
The Host Committee’s board also decided to pay a $400,000 bonus to Jeff Larson, who had served without pay as CEO of the committee since fall of 2007.

When Larson, a nationally known Republican fundraiser, took the job running the Host Committee, it appeared to be an unpaid position. It turns out Larson had no guarantee of being paid but did have a clause in his contract that if the convention turned out well and there was money remaining, he would be eligible for a bonus.

The committee’s board granted the $400,000 this summer. From their perspective — showcasing the Twin Cities to 50,000 convention visitors and a worldwide media audience — the convention was a big success, officials said. (The controversy surrounding a police crackdown on protesters — which drew criticism as heavy-handed — was not considered in the success algorithm.)

Larson’s company, FLS Connect, is a major telemarketing firm that provides voter identification and contact, fundraising and other campaign services to Republican national and state party committees and candidates.

He was identified as the “shopper” for vice presidential candidate Sarah Palin’s expensive convention wardrobe. Larson also gained attention for renting a basement room in his Washington, D.C., house to then-Sen. Norm Coleman in an arrangement that was scrutinized during Coleman’s 2008 re-election bid. He also served as treasurer of Coleman’s Northstar Leadership Political Action Committee.

 Larson, who has extensive Twin Cities ties, told MinnPost “The convention was something I always wanted to have in town, and I felt it was certainly worth doing, and I wanted to do my part.” He said he had no expectations of being paid for the RNC work.

“We didn’t know if there actually would be any money left over — it was nip and tuck until the last 10 days [before the Sept. 1-4, 2008, convention] and we really weren’t anticipating any extra.”

In those last few days, though, some of the large contractors — who’d been paid in advance for planning and staging the convention — determined that their costs were lower than projected and refunded millions of dollars, leading to the excess, organizers said.

Cindy Lesher — who was the unpaid (and “un-bonused”) president of the Host Committee as a “loaned executive” from Xcel Energy — said there were some tough times in the fundraising process and we “didn’t know how it would end up.”

“We worked hard to run a lean operation, nothing at all excessive, and stayed on budget, and we did it,” she said.

The latest FEC filings show that the Host Committee still has more than $7 million on hand. Some bills still remain to be paid, though, said Larson and Michael Vallante, the committee’s chief of staff.

Pending lawsuit
Before wrapping up its obligations, the committee faces one remaining outstanding issue: a lawsuit from the national fundraising company 3 Dog Consulting of Alexandria, Va., which says it raised $36 million for the committee. It alleges in a lawsuit that it is still owed $761,000 for its work.

While legal discovery continues in the suit, the committee has set aside about $740,000 in a contingency fund, so it can go ahead and begin disbursing the other funds to the foundations, said Michael Vallante, chief of staff for the committee, who is working to close out the committee’s books and obligations.

“The dissolution process requires notifications and filings and will take a couple months, but we’re planning to move some of the money to the foundations later this month,” Vallante said. “With winter and the holidays, we know they can use some of the money quickly.”

A challenge, then a surplus
Vallante, too, said fundraising had been tough in the months leading up to the convention.

“It was a challenge in early 2008, and while we were aggressive in fundraising, we also became aggressive in tightening the budget. Things involving luxury were eliminated. We prepaid a lot for two of our major expenditures — for construction at Xcel and the production end of things — so the vendors would have the money up front and could get things done quickly and smoothly.

“Then we got a few million more late in the cycle, in mid- to late August, and when the convention was over we got a rebate from a couple vendors, so we were left with the surplus.”

Vallante said with the surplus, and the strong feeling of the Host Committee board that the convention had gone well, the bonus clause for Larson was taken up.

“The board researched appropriate amounts that might be paid for that level and that position, and waited until the middle of this year, to get most of the bills paid and a clear picture of the finances, and then invoked the bonus,” he said.

The filings with the Federal Election Commission show that Vallante has been paid $10,000 a month for managing consulting services.

Lesher, who has since retired from Xcel Energy and now devotes much of her time to nonprofit work, said the convention exceeded all expectations, from the Host Committee’s perspective of trying to showcase the Twin Cities for visitors and the media audience.

“Some people ask if it was worth raising all that money, and I think the answer is absolutely yes. This was a once-in-a-lifetime opportunity to show off these communities I love on a world stage, and it worked,” she said.

Joe Kimball writes about politics, St. Paul and other subjects. He can be reached at jkimball [at] minnpost [dot] com.