Increasingly the political arm of the Tea Party, Freedom Works, is coming under strong scrutiny by the press. Since former House Majority Leader left the organization (after an attempted coup) with an $8 million dollar severance package, the operations of the organization is seeing the light of day. What is emerging is a well financed right wing machine financed mostly by major donors that pay huge amounts to conservative commentators to promote them on the air but not as paid advertisements.
Media Matters and Mother Jones both have run investigative stories about the organization. Glenn Beck was paid over $1 million for favorable mentions on the air and urging his listeners to support the organization with their checks. Rush Limbaugh started receiving payments for similar favorable comments on the air but the extent of his financial arrangement was unknown. Beck never disclosed to his listeners as he made his appeals that he was receiving over a million dollars.
Media Matters reported that Republican Majority Leader Dick Armey said after the failed coup:
"Armey also said the relationship with Beck expanded to include rallies that were co-sponsored by Beck and FreedomWorks, and included appearances by FreedomWorks President and CEO Matt Kibbe.
Armey said he objected to these events, dubbed FreePACs, because they often charged admission to FreedomWorks activists.
A review of promotional information for the events found $20 was a standard donation requested at some of the locations, while a Dallas, TX., FreePAC last summer charged prices as high as $971.
"You don't charge activists to attend rallies. I would consider that wholly inappropriate behavior," Armey said. "There was a lot of resentment on the part of the activists. They would naturally expect that they are providing the activist power and think that they have a right to attend."
"The principal value to anyone from the relationship with Beck was Matt Kibbe, who got to share Beck's stage with him," Armey said, adding that he found out about the July 2012 Dallas rally after his name was already being used to promote it.
"They put out an email under my name that had more information than I had," he recalled. "That is why when I resigned I had them cease and desist using my name."
Armey said he began looking into the specifics of the Beck and Limbaugh arrangements last year after hearing from others in the organization that such activities were being done without his knowledge.
"I had come to the point where I don't know how much we are spending on Beck and Limbaugh, but we are spending too damn much and we are getting too little value out of it," Armey said. "It was something I only found out about after inquiring into the affairs in September or October.
"Starting in January of last year, in that general neighborhood, what we had was a pattern that Kibbe got into a pattern of consistently working out arrangements with people without telling me what he was doing," Armey added. "They had people issue directives, 'don't tell Armey about this.' I had people close to me saying there is something fishy here, you better look into it."
Armey pointed out that any reports of revenue raised through the Beck and Limbaugh arrangements does not take into account the money paid to them in the deal."
Mother Jones reported that far from raising money from elderly citizens in Kansas almost all of the $40+ million for Freedom Works comes from just a few major right wing donors.
"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.)"