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FreedomWorks,
the national conservative group that helped launch the tea party
movement, sells itself as a genuine grassroots operation, and for years
it
has battled accusations of
"astroturfing"—posing as a populist organization while doing the bidding of big-money donors. Yet internal documents obtained by
Mother Jones show that FreedomWorks has indeed become dependent on wealthy individual donors to finance its growing operation.
Last month, the
Washington Post reported that Richard Stephenson, a reclusive millionaire
banker and FreedomWorks board member, and members of his family
funneled $12 million in
October through two newly created Tennessee corporations to
FreedomWorks' super-PAC, which used these funds to support tea party
candidates in November's elections. The revelation that a corporate
bigwig like Stephenson, who
founded
the Cancer Treatment Centers of America and chairs its board, was
responsible for more than half of the FreedomWorks super-PAC's haul in
2012 undercuts the group's grassroots image and hands ammunition to
critics who
say FreedomWorks does the bidding of rich conservative donors.
Big donations like Stephenson's are business as usual for FreedomWorks. According to a
52-page
report prepared by FreedomWorks' top brass for a board of directors
meeting held in mid-December at the Virginia office of
Sands Capital Management, an investment firm run by
FreedomWorks board member Frank Sands,
the entire FreedomWorks organization—its 501(c)(3) and (c)(4) nonprofit
arms and its super-PAC—raised nearly $41 million through mid-December.
Of that total, $33 million—or 81 percent of its 2012 fundraising—came in
the form of "major gifts," the type of big donations coveted by
nonprofits and super-PACs. (
FreedomWorks' nonprofit components do not have to disclose their funders.)
Well-heeled
individual contributors ponied up $31 million—or 94 percent—of those
major gifts, according to the FreedomWorks board book. Eight donors gave
a half-million dollars or more; 22 donated between $100,000 and
$499,999; 17 cut checks between $50,000 and $99,999; and 95 gave between
$10,000 and $49,999. Foundations contributed $1.6 million in major
gifts, and corporations donated $330,000. Corporations once accounted
for more of FreedomWorks' hefty donations. In a memo included in the
report, David Kirby, FreedomWork's vice president for development, and
senior adviser Terry Kibbe wrote, "This year continued our trend of
relying less and less on corporate support." At the same time
FreedomWorks expanded its small donor ranks from 41,794 in 2011 to
81,081 in 2012. More than 30,000 of those small donors gave between a
dollar and $99 this year.
According to ex-FreedomWorks chairman
Dick Armey, when he joined the organization in 2003, FreedomWorks relied
heavily on corporate donations. The group, he says, subsequently weaned
itself off such underwriting and used direct-mail lists—some provided
by Armey—to build up a base of small donors. But in the last year, there
was a "big surge in private individual contributions," most of which
Armey says he didn't know about. "The details were kept secret from me,"
he remarks.
FreedomWorks, flush with wealthy donors' money, took
full advantage of the nation's lax campaign finance rules during the
2012 election cycle. The group's nonprofit side shifted
millions of
dollars
in dark money to the FreedomWorks super-PAC, effectively hiding the
true source of those funds. One campaign finance reform advocate
blasted
those internal money transfers as the "laundering of secret money." A
FreedomWorks spokeswoman did not respond to requests for comment.
The
December board report was prepared in the wake of a bitter internal
battle between Armey and FreedomWorks president and CEO Matt Kibbe. As
Mother Jones first reported, Armey resigned in November after feuding with Kibbe over the direction of FreedomWorks. Armey
accused
Kibbe of using FreedomWorks resources to write a book in a deal that
awarded Kibbe the sales profits. Two board members allied with Armey in
December launched a legal
investigation into alleged wrongdoing at FreedomWorks. Kibbe, meanwhile,
drafted a memo charging
that Armey tried to steer the group away from its tea party roots and
toward a more mainstream GOP position. Four FreedomWorks staffers,
including vice president for public policy and government affairs Max
Pappas,
resigned after news broke of Armey's resignation.
In
2012, according to the board book, FreedomWorks hosted 110 current and
potential "investors" at a Jackson Hole, Wyoming, hotel for its second
annual "Restore Liberty" donor retreat. The event resulted in a source
pledging a $10 million matching grant; the board book does not name this
source. In August 2013, FreedomWorks plans to fete donors at the
four-star St. Regis resort
in Aspen, Colorado. (FreedomWorks also treats its board well, holding
its August 2012 meeting at the Snake River Lodge and Spa in Teton
Village, Wyoming, according to minutes taken at the meeting.)
In
2013, FreedomWorks plans to spend between $25 million and $30 million,
according to the board book. Favored causes and projects include the
annual Blog-Con convention, the right's answer to Netroots Nation;
fly-ins for activists to lobby members of Congress; briefings with lawmakers and their aides; and the
recently launched FreedomWorks University.
FreedomWorks also plans to continue its financial support for Glenn
Beck's media enterprise, including sharing a TV studio with and leasing
office space to the Washington bureau of
TheBlaze, Beck's website and TV network.
The
board book is chock full of strategy talk by the FreedomWorks' brass.
In a memo to the board included in the report, CEO Kibbe panned GOP
presidential nominee Mitt Romney as just another "old white guy." He
acknowledged that his group's plan to help flip control of the US Senate
to the GOP failed miserably ("We take our lumps with humility"), and he
insisted that it's time to replace the aging image of the conservative
movement with "younger, more diverse, more substantive voices for
freedom in America." Kibbe asked: "Can liberty, personal responsibility,
and doing things for yourself be the new 'cool'?"
Such a
makeover, Kibbe wrote, can begin if FreedomWorks courts so-called "Ron
Paul Millennials," the loud, loyal twentysomethings who in 2008 and 2012
followed the GOP libertarian presidential candidate from one stump
speech to the next. Kibbe noted that FreedomWorks plans to reach out to
blacks and Hispanics with a new "Black and Brown" tour, starring a
Brazilian immigrant and tea party activist named Ana Puig. And he touted
FreedomWorks' growing online presence, with 2.1 million members on its
email list and 4 million Facebook fans.
Despite his organization's
reliance on big-money donors, Kibbe stressed that the future of
conservative politics is at the grassroots level. "Freedom is trending,"
he wrote to the board, "thanks to your willingness to keep up the
fight."
UPDATE: In
an interview with Media Matters for America's Joe Strupp,
Dick Armey shed more light on FreedomWorks' financial arrangements with
Glenn Beck's media network and Rush Limbaugh's radio show. Those deals
were
first reported by
Mother Jones.
Armey said FreedomWorks paid Beck upwards of $1 million to promote
Freedomwork last year, calling the deal with Beck "basically paid
advertising for FreedomWorks." But Armey questioned that deal, saying it
provided "too little value" to FreedomWorks. Read the entire Media
Matters story
here.
Click here to return to the top of the story.
Read FreedomWorks' Winter 2012 board book:
(Click the link below to go to the MJ article and read the board book)
You like war. You like torture. You like Jesus. I don't know how
in the hell any of that is compatible, but no one ever accused you
haters of being over-committed to ideological consistency. You like
people who look like you or at least hate most of the things that you
hate. You hate everything else.
