A confidential contract obtained by The Associated Press shows that Armey agreed in September to resign from his role as chairman of Washington-based FreedomWorks in exchange for $8 million in consulting fees paid in annual $400,000 installments. Dated Sept. 24, the contract specifies that Armey would resign his position at both FreedomWorks and its sister organization, the FreedomWorks Foundation, by the end of November.
According to the contract, Armey's consulting fees will be paid by Richard J. Stephenson, a prominent fundraiser and founder and chairman of the Cancer Treatment Centers of America, a national cancer treatment network. Stephenson is on the board of directors of FreedomWorks.
Armey's exit comes as a new sign of acrimony in conservative and Republican ranks as the party's bruised leadership struggles with its November electoral losses and uncertainty over how to recast its principles and issues to compete with an ascendant Democratic Party.
Armey would not describe his specific concerns, but he told Mother Jones magazine that the tea party group was moving in an unproductive direction. He also indicated dissatisfaction with the November election results, in which several GOP candidates supported by FreedomWorks Super PAC donations were beaten by Democratic Party rivals.
In an internal Nov. 30 resignation memo published by Mother Jones, Armey told FreedomWorks CEO Matt Kibbe to remove his "name, image and signature" from all the group's materials and Web operations. Kibbe and other FreedomWorks officials were not immediately available for comment.
Armey, who had been with the tea party group since its 2004 founding, is a veteran Texas Republican Party political figure who was intimately involved in the GOP's conservative "Contract with America" congressional movement in the 1990s. While Armey, 72, was FreedomWorks' co-chairman and intellectual authority and at first, its public face, the younger Kibbe has been its most active official, appearing at the group's public gatherings.
FreedomWorks flourished after a wave of tea party House candidates swept into office in 2010, but despite spending hundreds of thousands of dollars to back favored GOP candidates in November, the group's influence appeared to wane at the polls. Among the GOP losers supported by FreedomWorks in November were Senate candidates Josh Mandel in Ohio, Connie Mack in Florida and Richard Mourdock in Indiana.
Overall, tea party-influenced House legislators fared better in the recent elections, though their ranks thinned. At least 83 of 87 members of the tea party-powered House GOP freshman class of 2010 ran for re-election to the House in November. All but 11 of them were returned to office while a twelfth, Rep. Jeff Landry, R-La., faces an uphill runoff election this month against another GOP incumbent.
FreedomWorks' internal secrecy and its role as a high-financed super political action committee became an issue in the weeks before the election when federal campaign finance documents revealed that a shadowy Tennessee-based corporation had funneled seven donations totaling $5.28 million to the tea party group. The amount was the largest political contribution to a super PAC in 2012 from a business group that would not identify its donor, citing changes to campaign finance rules that allow more secretive donations.
FreedomWorks would not identify the anonymous donor, and a Tennessee lawyer who set up the apparent shell company, Specialty Group Inc., declined repeated requests for comment. The Tennessee firm changed its name to Specialty Investments Group Inc. on Nov. 28, although the group appears to advertise no product or service. ___