Late last year, Judson Phillips of Tea Party Nation came to Eric Odom with a proposition. Odom’s group, the American Liberty Alliance–a free market, anti-tax group launched in March 2009, after its leaders had helped put together the first Tea Party protests–could sign on with the National Tea Party Convention that Phillips was organizing. ALA could promote the convention on its website and to its members. In return, it would become a “gold co-sponsor” of the convention, which would cost any other sponsor $5,000. That status would let Odom join other activists backstage with Sarah Palin, the event’s big-ticket speaker, before she gave her Saturday evening address. Odom signed up, and ALA joined the conservative women’s group Smart Girl Politics as the most prominent Tea Party groups promoting the event.

On January 12, Odom had to rethink his position. In the morning, he tried to convince local leaders of ALA that, despite some bad press coverage, the event was worth supporting. But at 2 p.m., Nashville-based Tea Party activist Kevin Smith posted a 6,700-word article on the “story behind Tea Party Nation’s dishonest beginnings.” In Smith’s account, Tea Party Nation had become a scam, promoting its own welfare while alienating local grassroots activists. The high cost of the convention–full-access tickets were $549, while access to Palin’s speech alone was $349. “It’s become clear to me that Judson and his for-profit Tea Party Nation Corporation are at the forefront of the GOP’s process of hijacking the tea party movement,” Smith wrote. “How can I honestly object to this same behavior in my Government and demand they clean up Washington when I am unwilling to risk the personal and political injury it takes to expose the fraud, corruption, and deceit to which I am privy?”

Smith’s attack on Tea Party Nation jumped from e-mail inbox to e-mail inbox. Hours later, 25 of ALA’s organizers told Odom that they wanted to pull out of the convention. Shortly after midnight, Odom announced that that ALA was quitting the convention because “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.”

Since the first announcements about the National Tea Party Convention in November 2009, the high-priced, first-of-its kind event has been a magnet for controversy, a divisive subject within the burgeoning movement, and a punching bag for local and national media. Those three factors have complemented one another, as angry activists like Smith, Florida organizer Robin Stublen, and California organizer Mark Meckler have attacked the convention in very public forums. The attacks have remained one-sided as Phillips has blown off questions about the criticism. He has not responded to multiple phone calls and e-mails from TWI and from other outlets such as TPM Muckraker. Asked to confirm that Palin was being paid $100,000 to appear at the event, Phillips only told Politico that its reporters’ sources were “not reliable.” The result: A steady stream of negative press that has been circulated inside the movement, culminating in the high-profile withdrawal of ALA.

“I think it is a great con of people making money off the passions of others,” said Erick Erickson, the editor of RedState.com and sponsor of the biannual RedState Gathering convention, in an e-mail to TWI. “A $500+ per person fee to a for-profit organization run by people most people have never heard of is neither populist nor accessible for many tea party activists. It smells more like a scam using Sarah Palin to build legitimacy while lining pockets with money from hard working tea party activists.” After talking to TWI, Erickson put up a blog post making the argument in even more detail.

“When I’ve talked to our members, they’ve said this is entirely too expensive,” said Jenny Beth Martin, the national coordinator of Tea Party Patriots. The decision not to participate was made in a December conference call with members. “I’m sure there are other people in the movement who haven’t given as much, haven’t been organizing events, and may feel more comfortable spending that money, going to see some speakers, and getting that training. But we’re focusing on a grassroots response to the State of the Union and on the next round of Tea Parties on February 27.”

But as humiliating as the National Tea Party Convention’s coverage has been for activists, critics and attendees alike see the ambition and political strategy of their movement becoming more and more mainstream. Nine months ago, Odom got national headlines for pre-emptively denying RNC Chairman Michael Steele a speaking slot at the Chicago Tea Party. “We prefer to limit stage time to those who are not elected officials, both in government as well as political parties,” he said at the time. Today, Steele is winning a Tea Party Nation web poll on whether he should speak the convention, and Odom is gearing up for a trip to Massachusetts to help the Republican candidate, Scott Brown, take the state’s open Senate seat. The Tea Party Express, an operation of the GOP-supporting Our Country Deserves Better PAC which has been utterly rejected by some Tea Party activists, is rolling into the convention and catching hardly any flack for it. The presence of Palin, Rep. Michele Bachmann (R-Minn.) and Rep. Marsha Blackburn (R-Tenn.) at the convention is seen, universally, as a coup with import that will outlive the controversy over the event itself.

“Having Palin speak at the convention works to to their mutual advantage,” said Morton Blackwell, the president of the Leadership Institute, an organization that trains conservatives (program veterans include James O’Keefe, the videographer who taped damaging exposes of ACORN) and is getting a discounted sponsorship at the National Tea Party Convention in return for holding free sessions. “It’ll help them get thousands of people there, I think. And the leadership of the Tea Parties, that I’ve talked to, do not believe that they should start their own party.”

Despite the negative press Palin has received for demanding so much money for her speech, there’s agreement that her presence will help convince activists that they need to work for Republicans. “Palin is actually more Tea Party than Republican Party, anyway–she walked away from the governor’s office, for crying out loud!” said Grover Norquist, president of Americans for Tax Reform–which is still undecided on whether to support the convention, based on conflicting suggestions from local activists. “But it’s important that they realize that they don’t have to be friends with the guys they replace the Democrats with. They get them to run on their issues. That’s how you avoid third party movements.”

Some of the people planning to attend the convention are still considering whether third party challenges to the Democrats and the GOP are viable. David DeGerolamo of NC Freedom, who is spending “thousands of dollars” to travel from North Carolina to Nashville and run a breakout session on consolidating state Tea Party groups at the convention, speculated that it would be an ideal place to “weed out” people who had the money to challenge the two parties. “I’ll tell you,” said DeGerolamo, “the GOP here in North Carolina is scared to death about what will happen at the Tea Party Convention.”

But the chance of the Tea Party Convention becoming the start of a third party movement — something rumored for months and occasionally indulged by Palin — is remote. (On the January 13 episode of “Glenn Beck,” Palin admitted that “there are times that I have been tempted to bail from” the GOP but that she didn’t think third parties are viable.) The focus of detractors is on purifying the movement of buck-raking, but not Republican activism. The focus of convention defenders is While Kevin Smith’s explosive blog post warned against GOP exploitation, hours later the Louisiana Tea Party endorsed Sen. David Vitter (R-La.) for re-election.

“Sometimes, in conservative circles, you run into this purity test problem where any traction in political process is seen as selling out over principled,” said John O’Hara, a staffer at the libertarian Heartland Institute who helped organized the February 27 Tea Party in Washington, D.C. and whose book “New American Tea Party” hit shelves this week. “I’d hate to see the Tea Party relegated to a third party spoiler, and luckily I don’t think that’s happening.”

Neither Tea Party activists nor conservative movement figures who are linking up with them express much worry about the bad press the convention is getting. Some of the non-participants who’ve been quoted criticizing the convention, such as Adam Brandon of FreedomWorks, are fine with the media promoting the crusade of Odom, Stublen, and others while Brandon’s group quietly promotes its new PAC targeting vulnerable Democrats. “We wish them all the best, but we are too stretched on the health care bill,” Brandon told TWI.

And for all the bad press Tea Party Nation’s received, the very day the group announced extremely limited access for the media, its website revealed one profitable reason why.

“The First National Tea Party Convention is officially SOLD OUT!!!! You may place your name on the waiting list in the event additional tickets become available.”

Sarah Palin is certainly giving the National Tea Party Convention legitimacy. But at what cost? I am fearful this thing will blow up and harm her. I am more fearful that a bunch of well meaning people from across the nation are going to show up, expect more, and then grow disaffected or burn out when the deliverables they expect do not come in.

I hope I am wrong about all of this. I could be. But something tells me I am right. And because no one else will say it, I will — I think Sarah Palin got some bad advice and probably should have done more due diligence.

At RebuildTheParty.com, a coalition of young GOP operatives, including Patrick Ruffini of The Next Right and Eric Erickson of RedState.com, argue that the key to winning the elections of the 21st century lies in mirroring the Internet-based, grass-roots models established by the Obama campaign and the GOP primary insurgencies of Rep. Ron Paul and former Arkansas Gov. Mike Huckabee.

In addition, their plan calls for the Republican National Committee to develop and adopt the newest technologies to serve their cause, train legions of new campaign workers and activists and focus on fielding a new generation of younger candidates. The coalition hopes to force the RNC to adopt and implement the plan ahead of the 2012 election.

2008 made one thing clear: if allowed to go unchecked, the Democrats’ structural advantages, including their use of the Internet, their more than 2-to-1 advantage with young voters, their discovery of a better grassroots model — will be as big a threat to the future of the GOP as the toxic political environment we have faced the last few years.

The time is now to set in motion the changes needed to rebuild our party from the grassroots up, modernize the way we run campaigns, and attract different, energetic, and younger candidates at all levels[...]

The challenge is daunting, but if we adopt a strongly anti-Washington message and charge hard against Obama and the Democrats, we will energize our grassroots base. Among other benefits, this will create real demand for new ways to organize and route around existing power structures that favor the Democrats. And, you will soon discover, online organizing is by far the most efficient way to transform our party structures to be able to compete against what is likely to be a $1 billion Obama re-election campaign in 2012.

I’m generally not in the business of giving Republicans advice, but I would have to agree that, structurally, adopting the plan is probably the smartest thing the GOP could do right now.

However, it appears to be lacking any recognition that on Tuesday, the American people overwhelmingly rejected the hyper-partisan rhetoric of recent elections. This plan seems to be an effort to double-down on partisanship, and it runs the risk of further alienating the non-conservative base majority of the electorate, which could push the GOP further into the wilderness if Obama has a successful first term.

That said, if the last few election cycles have taught us anything, dating back to the 2004 Howard Dean campaign, it’s that the Democrats have been light years ahead of the Republicans in developing the Internet as a tool for political organizing, communicating and fund-raising.

Progressives would be wise to take note that a new generation of Republicans is well aware of this imbalance and working actively to address it.