Why Dick Armey resigned from his tea party organization

Alex Pappas | Political Reporter

WASHINGTON — Dick Armey’s resignation as chairman of FreedomWorks follows months of turmoil, accusations of unethical behavior, top officials being put on administrative leave and a wave of staff departures inside the tea party-affiliated organization.

Multiple sources inside FreedomWorks told The Daily Caller that Armey’s resignation — made public this week but in the works for months — came about after the former House Majority Leader became angry with how FreedomWorks CEO and president Matt Kibbe was operating the organization.

“We had serious differences of opinion about the process of how you do business, and I wanted to move on,” Armey told TheDC in a Tuesday phone interview.

FreedomWorks, formed in 2004, has established itself as a prominent player in campaign politics. It is known for organizing large tea party rallies and in backing conservative candidates in races across the country.

The tension between Armey and Kibbe boiled over in August, according to sources, when Armey found out about the details surrounding Kibbe’s new book, “Hostile Takeover: Resisting Centralized Government’s Stranglehold on America.”

Armey, who in September accepted a $8 million consulting contract in return for leaving FreedomWorks after the election, was outraged that Kibbe — and not FreedomWorks — would earn money from the book. The royalties from a previous book co-authored by Kibbe and Armey went directly to the organization.

Despite a request from Kibbe, Armey refused to sign a document for the book deal. In September, Kibbe and Adam Brandon, a top official who helped Kibbe secure the book deal, were temporarily put on administrative leave as the organization’s board of trustees looked into the matter and hoped to keep it quiet before the elections, sources said.

Armey wasn’t the only one at FreedomWorks uncomfortable with Kibbe’s actions. Some questioned why Kibbe was on a book tour ahead of the election instead of devoting resources to the election.

“There’s unethical behavior going on at the top and there are a bunch of people leaving,” one knowledgeable source told TheDC.

Said another source: “There is a feeling by a lot of folks that FreedomWorks is shifting over to become a promotion vehicle for Matt Kibbe more than an organization that focuses on public policy and elections and being a service center to the grassroots.”

As many as 10 other people — including longtime staffers Brendan Steinhauser and Max Pappas — have left or are also leaving FreedomWorks, the sources said.

In an interview on Tuesday, Kibbe argued the book helps the organization more than it helps him and the organization is stronger than it has ever been.

“We really set out to tell what I consider the FreedomWorks story, the philosophy and decentralized strategy and some of the policy issues that matter,” he said of the book.

Kibbe, whose contract with Harper Collins is worth $50,000, said the book is “incredibly valuable to FreedomWorks to promoting our agenda, to raising money.”

“A lot of our most successful high dollar fundraising piece was in fact lifted directly from the book,” he said. “And I’ve used this book to educate both donors and activists.”

“It was always designed as something that would help FreedomWorks, because that’s what I do and that’s what I want to accomplish,” he said.

Kibbe disputed that Armey resigned over the book.

“That had virtually nothing to do with it,” Kibbe told TheDC. “I think there were just two very different visions about where FreedomWorks was headed.”

He also denied that staffers were leaving because of “this dispute over the direction of FreedomWorks.”

“We also have over 50 people on our staff and you’re bound to get a certain percentage of turnover at any given time,” he said. “That’s how this town works and we’re no exception to that.”

According to sources, the tension between Armey and Kibbe reached an all-time high over the book. But Armey had other complaints as well: he suspected that FreedomWorks press staffers were bumping him from TV appearances so they could book Kibbe instead. He also thought staff were having to choose between being loyal to Kibbe or loyal to FreedomWorks, and those choosing Kibbe were given preferential treatment.

When it became clear that Armey wanted out of FreedomWorks, Dick Stephenson, one of Armey’s longtime friends who is also on the FreedomWorks board — stepped in to convince him to wait until after the election to call it quits.

It was feared that the press would have a field day with his resignation, potentially hurting tea party prospects at the polls, sources said.

Armey then secretly signed a consulting contract with Stephenson — the Associated Press revealed on Tuesday — worth $8 million in $400,000 annual installments, under the condition he wouldn’t leave FreedomWorks until after the election.

“The question of the timeline was a matter of anxiety over the election, not wanting to upset the applecart before the elections,” Armey told TheDC on Tuesday.

Referencing news reports suggesting otherwise, Armey emphasized that the money isn’t coming from the FreedomWorks coffers.

“I can tell you that any agreement I had with Dick Stephenson in no way was an agreement between me and FreedomWorks,” he said.

Armey resigned in an email to Kibbe on Friday. It stayed quiet until Mother Jones, a liberal outfit known for being critical of conservatives and tea partiers, broke the news.

On Monday, hours before the story broke, there were no signs of turmoil as Kibbe held a press availability for 100 local tea partiers that convened at the group’s Capitol Hill offices for a weekend conference.

Standing on a platform and surrounded by the activists, Kibbe declared: “I think there’s more energy in this movement today than there was Nov. 6.”

Several feet away from the platform was a box of books titled, “Hostile Takeover.”

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