Freedomworks Debacle: Tea Party Fractures Laid Bare
As Saturday Night Live’s Stefon would say, this Washington tale has everything: accusations hurled and counter-hurled, handguns, multimillion dollar payoffs — just what we needed to briefly distract us as the parties played chicken up on Capitol Hill’s fiscal cliff.
The story first came to public attention in early December, when David Corn and Andy Kroll at Mother Jones magazine reported that “former Rep. Dick Armey, the folksy conservative leader, has resigned as chairman of FreedomWorks, one of the main political outfits of the conservative movement and an instrumental force within the Tea Party.
“Armey, the former House majority leader who helped develop and promote the GOP’s Contract with America in the 1990s, tendered his resignation in a memo sent to Matt Kibbe, president and CEO of FreedomWorks, on November 30. Mother Jones obtained the email on Monday, and Armey has confirmed he sent it. The tone of the memo suggests that this was not an amicable separation… Armey demanded that he be paid until his contract ended on December 31; that FreedomWorks remove his name, image, or signature ‘from all its letters, print media, postings, web sites, videos, testimonials, endorsements, fund raising materials, and social media, including but not limited to Facebook and Twitter;’ and that FreedomWorks deliver the copy of his official congressional portrait to his home in Texas.”
Armey told Mother Jones, “The top management team of FreedomWorks was taking a direction I thought was unproductive, and I thought it was time to move on with my life.” The next day, the Associated Press reported, “A confidential contract obtained by The Associated Press shows that Armey agreed in September to resign from his role as chairman of Washington-based FreedomWorks in exchange for $8 million in consulting fees paid in annual $400,000 installments…”
“According to the contract, Armey’s consulting fees will be paid by Richard J. Stephenson, a prominent fundraiser and founder and chairman of the Cancer Treatment Centers of America, a national cancer treatment network. Stephenson is on the board of directors of FreedomWorks.”
Shortly after, both AP and USA Today followed up on findings from the non-partisan watchdog Sunlight Foundation and reported that William Rose, an attorney in Knoxville, Tennessee, had recently created two companies that funneled more than $12 million in contributions to FreedomWorks. As USA Today noted, “Under U.S. law, corporations can give unlimited sums of money to outside groups supporting candidates, but not if their sole purpose is to make campaign contributions.”
But where the money really came from remained uncertain, and both Dick Armey and FreedomWorks CEO Matt Kibbe initially denied knowledge of the donations. Armey then told Mother Jones, “This kind of secrecy is why I left. I have never seen anything like this before.”
Why each of them would claim ignorance about the source of so much of the total cash FreedomWorks raised for the 2012 campaign is another missing piece of the puzzle. But in response to Armey’s comments and a December 12 letter from two FreedomWorks board members — Armey allies — citing “allegations of wrongdoing by the organization or its employees” — mainly, that Kibbe had illegitimately used the organization to promote himself and a book he had written — Kibbe soon mounted a counterattack.
Corn reported that, in a memo titled “Republican Insiders Attempt Hostile Takeover of FreedomWorks,” Kibbe accused Armey and his two boardroom allies “of being shills for the Republican establishment and undercutting the group’s standing as an independent, non-partisan, conservative organization.(FreedomWorks has at times endorsed Tea Party candidates in primary elections against mainstream or incumbent Republicans, drawing the ire of mainline Republicans.)”