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Prove Me Wrong: Tea Party Nation, PayPal accounts, and a shady financial past

Posted by – 1/17/10

If you’re just arriving at this controversy, you may want to get up to speed on the back-story. Here’s the blog that started things up last week.

In an interview with NBC News, Judson gave a classic politician’s answer to my allegation that he used his wife’s personal PayPal account to accept donations in the days immediately following the April 15th “Tax Day Tea Party” in 2009.

“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 further elaborated in a Tennessean article published today.

PayPal payments were always directed to a Tea Party Nation bank account, not a personal account, he said.

Smith and others might have thought they were misdirected because his wife, who keeps records for the company, set up the account to send e-mail confirmations of transactions directly to her, Phillips said.

Nice little jab by Phillips, insinuating that a web professional misunderstands how PayPal works, but it seems like the more this guy opens his mouth, the worse things get for him.

This has become a hot-button topic with the press in recent days because co-mingling of personal funds with donated funds is never permissible. In every interview so far, he’s answering a different question than the one that’s been asked. My allegation was that he used his wife’s personal PayPal account in April 2009 to accept donations for Tea Party Nation. The PayPal account he claims he has always used for all ticket sales and donations wasn’t even set up until August 21, 2009– well after the donations that occurred in April. This lovely screenshot of the PayPal member information panel for Tea Party Nation’s business account proves it. (If you have a PayPal account, you can corroborate this yourself.)


I dug deeper today, and found something that I missed the first time around.

Below is a screenshot sent to me by someone who donated to Tea Party Nation on April 17th, 2009, during the time-frame that I allege Judson and his wife were funneling donations through her personal PayPal account. It’s an email received by this donor as a receipt for the donation. (Identifying information has been blacked out to protect the donor from retribution.) But look at the email address attached to the PayPal account…


The PayPal account that was being used to accept donations in April of 2009 for Tea Party Nation was, in fact, a PayPal account with an email address from Judson’s law practice. So was it her personal PayPal account? Or was it a PayPal account she administered on behalf of “Judson Phillips, Attorney at Law”? Given his comment that sherry@teapartynation.com‘s PayPal account was a business account with her email attached to it, perhaps the same is true of the PayPal account for sherry@judsonphillips.com. Of course, one is no better than the other. Judson and his wife have a lot of explaining to do. (The description in the email above is auto-populated by ChipIn, the free service that was used to show a donation meter widget on the site. Given that I was the webmaster, I had set up this ChipIn account, thus why it shows my former TPN email address. As is stated on the ChipIn website, “Your contributors chip in via PayPal and the money goes directly into your PayPal account.” All donations went directly into the PayPal account owned by sherry@judsonphillips.com.)

Throughout last week, even more questions regarding Judson’s financial dealings have come to light. It was reported Friday that Phillips filed personal bankruptcy in 1999 and has since had three federal tax leins against him for more than $22,000. RedState’s Erick Erickson smelled something fishy on Monday. Then following Melissa Clouthier’s explosive article uncovering Phillips’s desire to make a million dollars from the Tea Party movement, Erickson had some advice for Phillips.

Just as a “for instance,” were I still practicing law I’d advise clients to have their 501(c)(4) or 527 already set up before taking people’s money. Saying the organization will turn around and pour the collected money into an as of yet unformed 527 or 501(c)(4) is questionable, if only from a tax standpoint.

I haven’t practiced law in a few years, but this was the area in which I practiced. If the fact are as reported, there is something questionable going on.

Sure, people make mistakes in life, but sometimes those mistakes carry with you for years in the form of a lack of trust. A person in this position must take extra steps to prove that all financial dealings are above board and properly organized, yet even Judson’s behavior last week in print and on radio arouse suspicion.

Given the questions raised about your inability to properly handle finances in the past, it only seems right that you should take the extra effort to show funds aren't being mismanaged this time.

So here’s the challenge, Judson. There are a lot of hard questions out there to which the convention attendees, your sponsors, the speakers, and certainly Sarah Palin deserve the answers. You called me a liar, so prove it. Tea Party Nation should immediately open its financial books for inspection with records dated from April 2009 to the present. Show the tea partiers that you’ve already set up the 527 that you claim will be receiving profits from the National Tea Party Convention. If there is truly nothing unethical going on here, then you’ve got nothing to hide. However, given the questions raised about your inability to properly handle finances in the past, it only seems right that you should take the extra effort to show funds aren’t being mismanaged this time. Sarah Palin — whose answer to the question of a speaking fee you foolishly refused to confirm — and the other speakers are trusting you with their political futures, and they deserve your honesty here.

Nothing wrong with transparency, openness, and fiscal responsibility, right? After all, it’s the very thing you claim to be demanding of government.

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5 Comments on Prove Me Wrong: Tea Party Nation, PayPal accounts, and a shady financial past


  1. [...] is a post from Kevin Smith, the Tea Party Express former webmaster explaining the hijinks going on over [...]

  2. Shanna says:


    Thoroughly enjoying this read as it always is refreshing to see the bad guys being taken to task! Keep giving ‘em hell, Kevin!

    Reading on to see if Judson ever responded to the claims you have so succinctly proven here…

  3. Larry says:

    It’s beginning to look like Phillips fits in with our existing Legislators. Keep up the pressure, because they are exactly what we want voted out of office.

  4. Don P. says:

    Wow, I’m not alone. I ignorantly spent $300 for a table at the Las Vegas convention. When the convention was cancelled, I asked Sherry for a refund, but after dodging the issue a few times, (waiting for a refund from the Mirage, passed message along to Judson who’s handling it) she has stopped answering my emails. I’ve also been banned from the TPN website. Any bets on whether I get my money back?

    Someone might want to check to see how much the Mirage is owed.

  5. [...] Party Nation merchandise to his wife’s bank account. Smith has a website up where he has posted screen-shots from PayPal that support his [...]