Politics & Policy

FreedomWorks’ Foes, Inside and Out

The conflict with Armey coincides with the group’s efforts to win intra-party conflicts.

Few political developments in 2012 offered the intrigue of the high-profile split between FreedomWorks and its chairman, former congressman Dick Armey.

Armey, 72, had been with the organization since 2004 and had become in many ways the face of the group. The closing weeks of 2012 offered glimpses of bizarre details: Armey’s departure was sweetened by a payout of $8 million in consulting fees paid in annual $400,000 installments from a FreedomWorks board member; Armey initially communicated his side of the story through an interview with the progressive magazine Mother Jones. Finally, on December 25, the Washington Post reported on an aborted coup in September, when Armey, his wife, and an aide holstering a handgun at his waist walked into the FreedomWorks offices and fired two of the top staffers: Matt Kibbe, the group’s president; and Adam Brandon, its senior vice president. The coup disbanded six days later; instead, Armey accepted his payout and determined to formally depart after the November elections.

Armey initially attributed the breakdown in relations with Kibbe to Kibbe’s book deal in 2012 for the publication of Hostile Takeover: Resisting Centralized Government’s Stranglehold on America. Armey was concerned that Kibbe had “structured the deal to personally profit from the book despite relying on FreedomWorks staff and resources to research, help write and promote it,” according to the Politico account. Armey and others at FreedomWorks believed this arrangement could jeopardize the group’s tax-exempt status.

A source inside FreedomWorks confirms that FreedomWorks’ legal counsel reviewed and edited Kibbe’s $50,000 book contract with the publisher before Kibbe signed it. The arrangement, which allowed the organization to promote the book and use it to build membership and donor support, was very similar to an earlier effort to promote Armey’s Axioms, a book Armey wrote when he worked for Citizens for a Sound Economy, one of the organizations that merged to form FreedomWorks in 2004. That arrangement allowed Armey to keep the royalties from Armey’s Axioms even as Citizens for a Sound Economy promoted the book on a national tour. The logic to this kind of argument is that the benefit to the organization, in terms of increasing membership, building the brand, and fundraising, far outweighs any costs incurred.

In early December, Kibbe decided to donate all proceeds from Hostile Takeover to FreedomWorks, according to staff. This source within FreedomWorks says that one fundraising pitch lifted directly from the book raised more than $350,000 for the organization.

In January, Armey elaborated on his complaint, telling David Corn of Mother Jones that he had been asked to sign a memo in August declaring that Kibbe was the “sole author and copyright owner” of the work and that “no significant FreedomWorks resources were used in the writing of the book.” Armey contended that the opposite was true.

After repeated requests for comment on Armey’s complaints and allegations, FreedomWorks provided a statement from businessman and former presidential candidate Steve Forbes, who is a member of FreedonWorks’ board of directors. “Matt Kibbe has been to FreedomWorks what Steve Jobs was to Apple,” Forbes said. “That’s why under Matt Kibbe’s leadership, FreedomWorks has grown dramatically over the past several years and has become a powerful support system for grassroots activists that make up the freedom movement. Great success always begets carping criticisms. The achievements of Matt and his team speak for themselves.”

In comments to the Associated Press, Armey suggested in December that his division with Kibbe and other leaders at the organization stemmed from his belief that the group was losing its way. “My differences with FreedomWorks are a matter of principle,” he said.

So what changed within FreedomWorks between 2010 and 2012? For one, the fights the group picked in 2012 were much more likely to ruffle feathers among Washington Republicans than its most high-profile crusades had been in 2010.

In the 2010 cycle, FreedomWorks’ top targets included Pennsylvania senator Arlen Specter, who left the GOP to become a Democrat in the face of a primary challenge from Patrick Toomey; Florida governor Charlie Crist, who left the GOP to run as an independent in the Senate race against Marco Rubio; Bob Bennett, a relatively little-known incumbent Utah senator who lost his nomination at the Utah GOP convention to Mike Lee; and a slew of incumbent House Democrats. Because Specter and Crist were no longer members of the GOP during their 2010 bids, almost none of the FreedomWorks money was classified as being spent against Republicans.

When examining the group’s spending in recent cycles, it is important to note that FreedomWorks is actually several entities; they have similar missions and ideologies, but they operate under different tax laws. There is FreedomWorks Inc., a 501(c) 4, which is allowed to participate in elections and lobby for legislation, although certain contributions are subject to the gift tax and its income spent on political activities is taxable. Then there is the FreedomWorks Foundation, a 501(c) 3; this group is not permitted to participate in political campaigning, and its supporters can deduct donations on their taxes. Additionally, FreedomWorks PAC (largely inactive in the 2012 cycle) and FreedomWorks for America Super PAC (whose primary activity is supporting the group’s endorsed candidates) function as separate entities.

Expenditures of independent groups such as FreedomWorks for America Super PAC are itemized and classified in filings with the Federal Election Commission as either for or against a particular candidate.

In 2012, FreedomWorks started targeting incumbent Republicans with relatively high profiles and voting records that Washington Republicans considered at least fairly conservative: Senator Dick Lugar of Indiana and Senator Orrin Hatch of Utah, former governor Tommy Thompson of Wisconsin, and a pair of incumbent GOP House members.

In the 2012 cycle, in the primaries, FreedomWorks spent $11.1 million that was classified as “Against Democrat” and about $1.5 million classified as “Against Republican” candidates. The group also spent $7 million classified as “For Republican” and $13,000 “For Democrat.” The group’s $19 million or so spent in 2012 is only a fraction of the sum spent by the biggest-spending Super PACs of 2012 (such as the $175 million spent by American Crossroads/Crossroads GPS or the $66 million spent by Priorities USA Action, the Super PAC headed by former Obama campaign staffers). However, FreedomWorks still ranked as the eleventh-highest-spending independent organization last cycle, slightly ahead of the National Rifle Association, the American Federation of State, County and Municipal Employees (AFSCME), and others.

According to data filed with the FEC through December itemizing the group’s spending, FreedomWorks for America spent about $1 million opposing Hatch in Utah’s primary in 2012 and another $46,000 supporting his primary rival, Dan Liljenquist.

In Indiana, the group spent $416,000 opposing Richard Lugar and a separate $331,000 promoting Richard Mourdock in the primary; the group spent an additional $1.38 million supporting Mourdock in the general election and $743,000 opposing Senator Joseph Donnelly in the general election.

In Arizona, redistricting pitted a pair of freshman Republican incumbents against one another. On August 14, FreedomWorks for America spent $17,714 on a “voter ID/survey” in support of Representative David Schweikart, as he faced off against Representative Ben Quayle, the son of former vice president Dan Quayle.

In Wisconsin, FreedomWorks for America spent $6,117 on online ads, yard signs, staff, and overhead in support of Eric Hovde in August, who was then battling Tommy Thompson in the GOP gubernatorial primary.

In Louisiana, FreedomWorks for America spent $670,000 in support of Representative Jeff Landry, who shared a district with Representative Charles Boustany, another Republican, when the state lost a congressional seat after the 2010 Census. The group also spent about $105,000 on online ads and candidate books in opposition to Boustany, who ultimately won in a December runoff.

Armey’s six-day reign at FreedomWorks, during the abortive coup in December, was brief, but it certainly suggested a different direction for the organization. A recording of a staff conference call provided to the Washington Post indicated that Armey wanted FreedomWorks to make a strong effort in behalf of Todd Akin, the Missouri Republican whose Senate campaign had already cratered after he suggested that rape could not result in pregnancy. Armey credited his decision to support Akin to “my friend [Missouri senator] Roy Blunt,” according to a memo from Kibbe. “He says they really need grassroots cover for Todd Akin,” Armey reportedly said.

FreedomWorks had endorsed John Brunner in Missouri’s GOP Senate primary and had declined to endorse Akin even before Akin’s politically radioactive comments on rape. Despite Armey’s call to help Akin, FEC filings do not indicate any activity by the group in Missouri after May. Akin had “allowed Democrats to change the narrative with his offensive comments about ‘legitimate rape’ and simultaneously lost two seats we could have won,” Kibbe wrote in his end-of-the-year letter to FreedomWorks members. “Indiana’s Richard Mourdock would later step on that easy-to-spot landmine and lose a seat he had in the bag.”

While Armey has discussed his departure with Mother Jones, ABC News, the Associated Press, CBS This Morning, the Washington Post, and Media Matters for America, the remaining leadership at FreedomWorks has not responded in detail. After the unexpected internal battle, the organization is forging ahead. One staffer says many in the group feel “let down” by Armey’s criticism, emphasizing that it stings especially because the staffers he is now criticizing once “looked up to him.”

Armey has never specified the “matter of principle” that spurred his departure, but FreedomWorks did redefine its mission in 2012: The organization shifted from what some might consider the easy call of opposing lawmakers who stood out for their disagreement with conservatives — the Arlen Specters and Charlie Crists of the GOP world — to targeting brand-name, well-connected veterans of the party such as Lugar, Hatch, Thompson, and Quayle, the son of a former vice president.

It’s not unreasonable to conclude that in 2012, FreedomWorks focused as much or more on winning intra-party conflicts than on waging the traditional battles against liberal Democrats. But if Armey indeed wanted FreedomWorks to support any Republican who “needed grassroots cover,” he would be departing sharply from the organization’s defined, core mission. Washington already has several well-funded organizations whose sole purpose is to elect Republicans, with few litmus tests for ideology or policy preference: the Republican National Committee, the National Republican Senatorial Committee, and the National Republican Congressional Committee.

The purpose of FreedomWorks, according to Kibbe and the staff members who chose to stay on after Armey’s departure, is not to support any Republican who wins a primary but only those who consistently support FreedomWorks’ limited-government, free-market ideology. And as future GOP primary fights take shape, FreedomWorks is likely to play that role again, thrilling some Republicans and frustrating or enraging others.

Those fights are a bit farther down the road. As 2013 begins, the organization is now focused on several state initiatives, including a measure for paycheck protection in Pennsylvania, efforts to expand school choice, and attempts in ten key states to block the creation of the health-care exchanges intended to facilitate Obamacare. But the group enters the year facing a challenge few would have foreseen, a former chairman infuriated with what it has become, and eager to tell of its flaws and problems to anyone who will listen.

— Jim Geraghty writes the Campaign Spot on NRO.

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