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Tea Party Turmoil: FreedomWorks’ Dick Armey Takes $8 Million Exit Buyout After Failed Coup

StoryDecember 27, 2012
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Former House Majority Leader Dick Armey attempted a coup within his own tea party-linked nonprofit FreedomWorks earlier this year. When that failed, he took an $8 million payout from a millionaire Republican donor to leave. The incident highlighted what is believed to be growing turmoil inside the tea party movement after it rose to prominence ahead of the 2010 election. We’re joined by Politico reporter Kenneth Vogel. “[Armey] did in fact take a hit when he decided to go sort of all in with FreedomWorks and refashion himself as a tea party leader,” Vogel says. “There’s always been this kind of tug of war, if you will, in the tea party between national leaders, national groups that have deep-pocketed contributors and benefactors, like FreedomWorks … and the actual grassroots.” [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: We turn now to a deepening rift within the conservative political movement. New details have emerged in the internal turmoil at the key tea party group FreedomWorks. The Washington Post reports the group’s chairman and former House majority leader, Dick Armey, attempted to seize power in a coup-like maneuver earlier this year before receiving a multimillion-dollar payout to leave. Armey entered the FreedomWorks offices in September with an armed aide, who escorted two top employees off the premises while Armey suspended several others. Just days later, however, Armey left the group after an Illinois millionaire pledged $8 million over 20 years in exchange for his departure.

Speaking on Fox Business News, Armey commented on his decision to leave FreedomWorks. He also denounced House Speaker John Boehner’s decision to kick four tea party-backed congressmen out of key committee assignments.

DICK ARMEY: I left there because I had serious concerns about the ethical and moral behavior of the senior leadership. I don’t particularly want to discuss that at length. I think it will be resolved. I’m consoled by my certain knowledge that time wounds all heels and that this will be in fact, at some point, all sorted out. But it has nothing to do with John Boehner’s misguided sense that he can discipline his colleagues in his conference, all of whom were elected as Republicans on the Republican ticket, or the notion that people have been dreaming about since ’09 that the tea party will dry up and blow away. These tea party activists are people of—with long-standing commitment to ideals, and they know their activism matters, and they will be there in the next election cycle.

AMY GOODMAN: That was former House Majority Leader Dick Armey. FreedomWorks has been a pivotal force behind the victories of tea party candidates in recent years. The money for Dick Armey’s exit came from Illinois billionaire Richard Stephenson, founder of the for-profit Cancer Treatment Centers of America. Stephenson was reportedly behind more than $12 million in donations funneled to the FreedomWorks super PAC in the weeks before the 2012 election.

For more, we’re joined via Democracy Now! video stream by Ken Vogel, a reporter for Politco who covers money and politics, recently wrote an article called “Inside the Dick Armey, FreedomWorks Split.”

Ken Vogel, welcome to Democracy Now! So, Dick Armey came in with an armed guard to try to take over his organization?

KENNETH VOGEL: Yeah, kind of a bizarre story. Really a lot led up to it to get to that point. And my understanding is—my reporting suggested that maybe there were some members of the board of directors of FreedomWorks who actually took his side and actually placed these two senior officials at FreedomWorks on administrative leave before this showdown with the armed guard transpired. Nonetheless, it was already ugly at that point. That only made it that much uglier.

And it will be interesting to see what happens with FreedomWorks, because while Dick Armey may have only been a figurehead by the point that these tensions boiled over and manifested themselves in this coup, he was a rather powerful figurehead, both as a former majority leader of the House who had a lot of connections in the media and, more importantly, as a fundraiser. It’s interesting that this Dick Stephenson guy, who, as far as we can tell—and we don’t know a ton about the donors to FreedomWorks, because most of the money is coming in through the 501(c)(4) non-disclosing, nonprofit affiliate of FreedomWorks—but this Dick Stephenson guy is a major donor, probably one of the biggest. And so, his willingness to essentially, through this agreement, side with Matt Kibbe and Adam Brandon against Dick Armey, even though he entered into this agreement that will eventually pay Dick Armey $8 million over 20 years, is significant because it suggests that maybe this new leadership of FreedomWorks will have the backing of some major donors, even without Dick Armey’s leadership.

JUAN GONZÁLEZ: Well, Ken Vogel, according to some of the coverage, the claims as to the source of the rift are very different depending on which side you listen to on. From Armey’s side, he’s claiming that it has to do with ethical questions about the president of FreedomWorks, Matt Kibbe, writing a book where he was personally benefiting from, while using the staff of FreedomWorks. But on Kibbe’s side, he’s claiming that it has to do more with the fact that Armey was trying to pull FreedomWorks more in a main—to support mainstream Republican candidates instead of maintaining its support for more tea party-oriented Republican candidates. What’s your sense of these claims and counterclaims?

KENNETH VOGEL: Well, I don’t think that they’re necessarily mutually exclusive. Certainly, there were personality tensions there that involved both sort of who was in charge, just a power struggle. And Dick Armey—from Dick Armey’s perspective, these two senior officials, Matt Kibbe and Adam Brandon, were trying to wrest control of him and were doing so in a way that, from Armey’s perspective again, could redound to their personal benefit, potentially in violation of the group’s 501(c)(4), 501(c)(3) tax status—that is, where there can be no personal benefit accrued by any member of the leadership, any, quote, “interested” party.

Additionally, Dick Armey thought that they were kind of hogging the limelight, quite literally, that they were hiding media requests that were coming in for him and instead offering up Matt Kibbe. I can personally attest to that as someone who has covered this organization in the past, where I had made media requests to talk to Dick Armey and had instead gotten Matt Kibbe, who, you know, at the time I didn’t think anything of, because I thought Matt—you know, Matt Kibbe is a very articulate guy. He is obviously very involved in the leadership of FreedomWorks and the tea party movement more generally. But you could see why Dick Armey sort of retroactively might quibble with that.

And additionally, from the philosophical approach, certainly there is something to that. FreedomWorks and other tea party groups did get a lot of criticism for going in behind candidates, anti-establishment candidates in Republican primaries, who the establishment deemed sort of less viable as general election candidates. I’m talking now about Richard Mourdock, the candidate who beat Dick Lugar in the Indiana Senate primary. I’m talking about, going back to 2010, Sharron Angle, the candidate who defeated a couple more establishment candidates in the Nevada Senate primary. And both of those candidates ended up losing to Democrats who, in many ways, were considered rather vulnerable from a sort of, you know, political odds maker’s perspective headed into the election. And so, there were establishment Republicans who really pointed a finger of blame at the tea party and at groups like FreedomWorks for hindering their potential Senate gains and cutting them short in both 2010 and 2012.


KENNETH VOGEL: Whether Dick Armey had wanted them to go in a more establishment direction, I hadn’t heard that at the time. I didn’t detect that—

AMY GOODMAN: Well, actually, let’s—let’s turn to—

KENNETH VOGEL: —but it’s certainly possible. And it certainly—


KENNETH VOGEL: —would undercut Matt Kibbe and Adam Brandon and other tea party leaders’ sort of sense as to what the tea party should be.

AMY GOODMAN: Let’s turn to Dick Armey on CBS insisting the tea party was not holding back Republican leaders from agreeing to a budget deal with additional revenues to avert the so-called fiscal cliff.

DICK ARMEY: No, not at all. First of all, understand, the tea party is not a political party. It is a group of people across the country that have a commitment to a set of principles. They believe economic growth is the first most important need of this country, which means get the government to stand down, quit interfering, quit obstructing growth, in so many ways, not the least of which is the EPA.

AMY GOODMAN: That’s Dick Armey, former head of FreedomWorks, for Senate—House majority leader. Ken Vogel, talk about what’s happening with the fiscal cliff right now and the major divisions within the Republican Party. You follow the conservative movement within the Republican Party.

KENNETH VOGEL: Yeah, that’s right. And I think that that is the story of the fiscal cliff stalemate, much as it was last year with the stalemate over increasing the debt ceiling. It is, in fact, these tea party members, who were elected first in the—you know, in the conservative wave of 2010 when Republicans took back the House, and subsequently some—there were some additions to the sort of tea party caucuses in both the House and the Senate in 2012, but many fewer. And in fact, many tea party members lost their re-election bids in 2012. And I think—you know, it’s hard to generalize, but you could look at a number of them and say that the—the sort of souring of public opinion on the tea party as a result of their perceived unwillingness to compromise in 2011 over the debt ceiling negotiations probably was held against them, probably hurt not only them in their re-election bids, but also Republicans more broadly and the Republican brand, because it is—they are perceived to be the party of intransigence as a result of these—this increasingly small minority within the House Republican conference that’s made up of self-identifying tea party folks who rode the tea party wave in 2010 into office. And they are, in some ways, carrying out their mandate. This is what they said during the campaign. They said that they were not going to compromise on fiscal issues. They’re not doing it. It’s had, you know, a rather gridlock-inducing effect on the government and a rather damaging effect on public perceptions of both the tea party and the Republican Party.

JUAN GONZÁLEZ: And your sense now of where Dick Armey goes after this—with this $8 million cushion that he has to leave FreedomWorks?

KENNETH VOGEL: Well, I think this is—he perceives this as his retirement. And that’s the way—when I talked about this with him, that’s the way he framed it. He did in fact take a hit when he decided to go sort of all in with FreedomWorks and refashion himself as a tea party leader, which struck a lot of folks within the tea party as odd. I mean, there’s always been this kind of tug of war, if you will, in the tea party between national leaders, national groups that have deep-pocketed contributors and benefactors, like FreedomWorks, like Dick Armey and Dick Stephenson, the cancer center CEO, and the actual grassroots. I think it’s an oversimplification to say that the tea party is just a sort of astroturf, corporate-funded interest group or an extension of the Republican Party even. Clearly there is that element to it, but there is also this broad swath—or there was in 2010, this broad swath of grassroots activists, and [inaudible] were new to the process.

AMY GOODMAN: Ken, we have to leave it there. Ken Vogel, covering politics for Politico.

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