“I’ve enjoyed my association with FreedomWorks,” said Sen. Mike Lee (R-Utah), who defeated incumbent Bob Bennett with help from the group. “Matt Kibbe and Dick Armey endorsed me early in my candidacy for the U.S. Senate, and they were a big help to me.”
Despite such testimonials, FreedomWorks has struggled with accusations that it is an “astroturfer” — a national organization of big-money donors that swept in to lay claim to an independent movement.
According to public records, FreedomWorks received more than $12 millionbefore the election from two corporations based in Knoxville, Tenn.: Specialty Investments Group and Kingston Pike Development. The firms were established within a day of each other by William S. Rose III, a local bankruptcy lawyer.
Rose, who could not be reached for comment, has said publicly he would not answer questions about the donations. But according to three current and former FreedomWorks employees with knowledge of the donations, the money originated with Stephenson and his family, who arranged for the contributions from the Tennessee firms to the super PAC.
Brandon, FreedomWorks’ executive vice president, told colleagues starting in August that Stephenson would be giving between $10 million and $12 million, these sources said. Brandon also met repeatedly with members of Stephenson’s family who were involved in arranging the donations, the sources said.
Stephenson attended a FreedomWorks retreat in Jackson Hole, Wyo., in August at which a budget was being prepared in anticipation of a large influx of money, according to several employees who attended the retreat. At the retreat, Stephenson dictated some of the terms of how the money would be spent, the employees said.
“There is no doubt that Dick Stephenson arranged for that money to come to the super PAC,” said one person who attended the retreat. “I can assure you that everyone around the office knew about it.”
Among other things, Stephenson wanted a substantial sum spent in support of Rep. Joe Walsh (R-Ill.), a tea party favorite and Stephenson’s local congressman, several who attended the retreat recalled. Walsh garnered national headlines during the campaign when he questioned whether his opponent, Tammy Duckworth, a former Blackhawk helicopter pilot who lost both legs in Iraq, was a “true hero.” Despite internal misgivings about the value of the investment, FreedomWorks spent $1.7 million on ads supporting Walsh; he lost the race.
Two watchdog groups last week asked the Federal Election Commission and the Justice Department to investigate the donations from the two Tennessee companies. The groups, Democracy 21 and the Campaign Legal Center, say the arrangement could violate federal laws that prohibit attempting to hide the true source of a political contribution by giving it under another name. (Brandon declined to comment on the complaints, but he said the group’s books were in order.)
For years, FreedomWorks was headed by an unlikely duo: Armey, 72, the old-guard pol who wears a black cowboy hat even when he’s not on his Texas ranch, and Kibbe, 49, who sports mutton-chop sideburns and has a passion for the Grateful Dead.
But the most important relationship appears to be the bond between Kibbe and Stephenson, who bridged their age gap through shared libertarian views and Kibbe’s battle with testicular cancer a decade ago, Armey and others said. They said Kibbe, after being given a terminal diagnosis, was encouraged by Stephenson to get treatment at his cancer clinics; more than a decade later, they said, he is cancer-free.
Until this year, the partnership between Kibbe and Armey worked well. Armey’s renown as a former House member drew media attention and crowds of conservative activists — most of them old enough to remember Armey’s role in the Republican revolution in Congress in 1994. And Kibbe’s youthful intellectualism drew a new generation of libertarian soldiers into the FreedomWorks fold. In 2010, the two co-wrote a book, “Give Us Liberty: A Tea Party Manifesto,” that became a New York Times bestseller and a successful marketing tool for FreedomWorks, which collected the book’s proceeds and used it to attract donations.
The partnership came to a crashing end when Armey marched into FreedomWorks’s office Sept. 4 with his wife, Susan, executive assistant Jean Campbell and the unidentified man with the gun at his waist — who promptly escorted Kibbe and Brandon out of the building.
“This was two weeks after there had been a shooting at the Family Research Council,” said one junior staff member who spoke on the condition of anonymity because he was not authorized to talk to the media. “So when a man with a gun who didn’t identify himself to me or other people on staff, and a woman I’d never seen before said there was an announcement, my first gut was, ‘Is FreedomWorks in danger?’ It was bizarre.’ ”