Armey in Exile

The 2012 election was supposed to be the culmination of Dick Armey’s life’s work—his chance to harness tea party fervor and bring about sweeping reform. So when it all fell apart amid a feud with his comrade-in-arms, not even an $8-million payout could console him.
Dick Armey has retired in Texas, where he putters around his ranch, visits his grandkids, and thinks about a new book. He says he doesn’t miss Washington. Photograph by Justin Clemons.
Dick Armey has retired in Texas, where he putters around his ranch, visits his grandkids, and thinks about a new book. He says he doesn’t miss Washington. Photograph by Justin Clemons.

By the time CNBC’s election-night anchors welcomed Dick Armey on
the air, the networks had already called it. CNBC rolled footage of Barack
Obama supporters waving American flags and cheering, above the
breaking-news banner: PRES. OBAMA WINS RE-ELECTION. The only thing left
was for Mitt Romney to concede.

But Armey, the former House majority leader, saw no reason to
surrender. “I don’t blame the Romney folks for refusing any concession
speech on the basis of this premature call,” Armey told viewers. “You got
Florida running, seems to me, headlong into a recount, and Ohio I don’t
think is settled by any means.”

Driving to his home outside Dallas after the TV appearance,
Armey heard Karl Rove on the radio insisting that Ohio was still up for
grabs. Armey planted himself on the couch and flipped anxiously between
Fox News and C-SPAN, nourishing a flicker of hope right up until 12:55 am,
when Romney finally capitulated.

After three decades in politics, Armey had seen Republicans
lose plenty of elections. But this one really hurt. He knew it would be
his last election as the face of the Tea Party, and it wasn’t supposed to
end this way.

One month earlier, Armey had agreed to resign as chairman of
FreedomWorks, an influential conservative organization, and slipped out of
Washington for good. Even an $8-million payout couldn’t assuage his
bitterness. The fall of 2012 should have been an auspicious time at
FreedomWorks headquarters.

Throughout the mid-aughts, the organization had tried—and
repeatedly failed—to ignite a modern-day Tea Party movement. So when
populist anger over out-of-control federal spending gripped the nation in
2009, no group in Washington was better positioned to capitalize on it.
FreedomWorks organized Tea Party protests, supported hardened conservative
candidates, and helped the GOP take back the House in the 2010 midterms.
In the run-up to the November 2012 elections, FreedomWorks rallied 2.1
million activists and spent nearly $20 million in an effort to drag
Washington to the right.

Almost overnight, the organization had transformed itself from
a B-list nonprofit to the Tea Party’s unofficial headquarters in
Washington. The ascent was engineered by a pair of unlikely allies. With
his ten-gallon hat and Texas swagger, Armey, 72, was FreedomWorks’
charismatic frontman. Forty-nine-year-old Matt Kibbe, an ex-congressional
aide with muttonchops and Grateful Dead posters, was its behind-the-scenes
strategist.

Through their long crusade, the two had become as close as
family, and Kibbe saw Armey as a father figure. But at the very moment
that their small-government revolution was finally happening, Armey and
Kibbe declared war on each other, dividing the FreedomWorks staff into
opposing factions just weeks before the most important election of their
lives. Employees scrambled to keep the infighting out of the press,
fearing that the embarrassment would hurt Republicans at the ballot box,
and they struggled to make sense of the rift.

What could have caused the nasty, personal feud between these
two former allies that now threatened to destroy their life’s
work?

• • •

It was 1983, and Dick Armey needed a new job. He had once been
happy at North Texas State University, whose faculty he had joined in
1972. He began economics classes by reciting: “Armey’s Axiom Number One:
The market’s rational; the government’s dumb.” He spun dry academic
concepts into engaging lessons—using, for example, Al Capone’s crime
syndicate to explain market-sharing cartels. Students voted Armey their
favorite professor.

By the early 1980s, though, North Texas State’s campus in
Denton was growing increasingly liberal and politically correct, and Armey
felt out of place. “I had to get out of there,” he says.

Armey spent evenings watching live coverage of roll-call votes
and markup hearings on C-SPAN. “Hell, obviously anybody can do that job,”
he thought. He declared his candidacy for the House in 1983 and was
elected the following year.

In his Stetson hat and cowboy boots, Armey cut an improbable
figure in Congress. He sneaked out to the Potomac for early-morning
fishing, and to save money he slept in the House gym. When the House
speaker kicked him out, he crashed in his office.

Armey fought hard to cut government spending, and when he won a
few high-profile battles, GOP leaders took note. They invited him to help
write the so-called Contract With America, a set of promises—to audit
Congress for waste, to downsize committee staffs—that became the
Republican platform for the 1994 midterms. When voters handed control of
the House to Republicans for the first time in 40 years, Armey was elected
majority leader.

Despite his rise, Armey lacked political instincts, forgetting
people’s names and arriving late to votes because he was chatting with his
staff. “He was a Mr. Magoo type of character,” says a former GOP
leadership aide. “Everyone knew that he didn’t know what was going
on.”

Armey also talked himself into controversy. He referred to
Hillary Clinton as “Marxist” and to Massachusetts Democrat Barney Frank—an
openly gay congressman—as “Barney Fag.” (Armey said he accidentally
mispronounced Frank’s name.)

Heading into a press conference after the 1998 Monica Lewinsky
scandal broke, Armey was advised by a press aide not to comment on the
affair. But when a reporter asked, he couldn’t help himself. “If I had
been [in the President’s place], I would be looking up from a pool of
blood and hearing [my wife] say, ‘How do I reload this thing?’

Armey retired from Congress in 2003 but hoped to remain active
in the small-government movement. “It isn’t impossible that you could be
more effective out of Congress than you are in Congress,” his wife, Susan,
said.

Yes, Armey agreed. But only if he joined the right
organization.

On April 15, 2010, Armey rallied a crowd of Tea Party protesters at a “People’s Tax Revolt” on DC’s Freedom Plaza. Photograph by Bill O’Leary/Getty Images.

It was 2001, and Matt Kibbe was going to die. The tumor in his
stomach had swelled to the size of a football, crushing his kidney.
Doctors diagnosed him with Stage IV cancer.

Facing death, Kibbe reflected on his life. His years in
Washington had failed to bring about the small-government reforms he’d
worked so hard for. “There was no mark left behind—he didn’t change
anything,” a friend says. “That really haunted him.”

Kibbe had stumbled into free-market economics as a teenager in
Erie, Pennsylvania, where his father was a factory manager. At 15, Kibbe
bought the album 2112 by the band Rush, which was dedicated to
novelist Ayn Rand. Curious, Kibbe picked up Rand’s book Anthem at
a garage sale and was enthralled.

In graduate school at George Mason University, he studied
Austrian economics—the staunchly free-market discipline that rejects
government regulation and safety nets. By the time he entered the
workforce, Kibbe’s small-government principals were unshakable. He quit a
job at the Republican National Committee after President George H.W. Bush
broke his no-new-taxes pledge, and he resigned from the US Chamber of
Commerce when it endorsed President Clinton’s 1993 health-care
reform.

In 1996, Kibbe joined an organization called Citizens for a
Sound Economy (CSE), which was founded by billionaire industrialists
Charles and David Koch to do for the right what labor unions and Ralph
Nader’s consumer advocates had long done for the left.

Kibbe was CSE’s second in command when he underwent surgery to
remove his stomach tumor. To the surprise of his doctors, the procedure
revealed that the cancer wasn’t terminal. Kibbe recovered, but the
experience changed him.

“It radicalized me,” Kibbe says. “I returned to work with an
understanding that I didn’t have all the time in the world, so I wanted to
get something done.”

• • •

In 2002, CSE launched the website USTeaParty.com, with a video
game that encouraged users to toss crates of tea off a ship in Boston
Harbor while then-Democratic Senate majority leader Tom Daschle stood on
the dock, wearing a British redcoat and taunting: “Just pay me and shut
up.”

Armey joined CSE as co-chairman the next year, providing
political star power that the organization lacked. He made $430,000 a
year, on top of the $750,000 salary he earned as a lobbyist for the firm
DLA Piper.

But shortly after his arrival at CSE, a boardroom dispute split
CSE in two. The Kochs broke off and founded Americans for Prosperity while
Kibbe partnered with Armey to form FreedomWorks in 2004.

Kibbe wanted to make sure FreedomWorks couldn’t disband the way
CSE had, Armey says, so he structured the nonprofit with an unusual
three-person board of trustees that had the final say in all
organizational matters. Kibbe and Armey took two of the three
seats.

Together they organized activists to support small-government
initiatives throughout the country. But without the Kochs’ financial
backing, FreedomWorks struggled to make payroll.

Kibbe and Armey organized anti-tax protests each April 15 at
post offices around the country—rarely drawing more than two dozen people.
They penned an op-ed submission in 2007 advocating the Boston Tea Party
approach to citizen revolt. “[Samuel] Adams was the first American to
recognize that ‘it does not require a majority to prevail, but rather, an
irate, tireless minority keen to set brush fires in people’s minds,’ ”
they wrote, according to Kate Zernike’s book Boiling Mad: Inside Tea
Party America
.

Editors yawned; the op-ed was never published.

No matter what they tried, Kibbe and Armey couldn’t seem to
ignite their modern-day Tea Party movement.

• • •

Everything changed on the morning of February 19, 2009, when
CNBC’s Rick Santelli was asked live on the air for his reaction to the
Obama administration’s latest plan to assist homeowners.

Santelli turned to the traders surrounding him on the floor of
the Chicago Mercantile Exchange: “This is America! How many of you people
want to pay for your neighbor’s mortgage that has an extra bathroom and
can’t pay their bills?”

The traders booed.

“President Obama, are you listening?” Santelli continued.
“We’re thinking of having a Chicago Tea Party in July. All you capitalists
that want to show up to Lake Michigan, I’m gonna start
organizing.”

As Santelli’s red face blasted across the Internet,
FreedomWorks’ staff saw an opening. The moment encapsulated the populist
anger over federal spending that they’d begun to sense months earlier,
when President George W. Bush announced a $700-billion Wall Street
bailout.

The staff had to answer Santelli’s call. But how?

Within hours, FreedomWorks created the website IAmWithRick.com,
rallying the public to oppose federal bailouts. Soon FreedomWorks was
flooded with calls. “It was like an organizer’s dream come true,” says a
former staffer.

In the weeks that followed, FreedomWorks and other DC-based
groups helped organize Tea Party rallies from Philadelphia to Sacramento.
On April 15, 2009—tax day—some 750 Tea Party protests took place around
the country. That summer, FreedomWorks urged people to oppose health-care
reform at town-hall meetings, turning those normally lifeless events into
news stories about angry constituents shouting down members of Congress.
The group spent $500,000 to sponsor September 2009’s Taxpayer March on
Washington, which—in conjunction with Glenn Beck of Fox News—packed
thousands of fuming Tea Partyers onto the Capitol’s west lawn. Protesters
waved signs reading I’M NOT YOUR ATM and held posters depicting President
Obama with a Hitler mustache.

Obama “pledged a commitment of fidelity to the United States
Constitution,’’ Armey told the crowd.

“Liar! Liar! Liar! Liar!’’ they chanted.

Reporters struggling to understand the leaderless Tea Party
movement found in Armey a quotable spokesman who never turned down an
interview. Criticism from the left—such as when White House spokesman
Robert Gibbs blamed “Dick Armey’s group” for “getting people to go to town
halls and yell at members of Congress”—only cemented FreedomWorks’
credibility. At the same time, Kibbe quietly paid conservative radio hosts
Glenn Beck and Rush Limbaugh to endorse the organization on the air. These
“embedded media” segments were paid advertisements for FreedomWorks
cloaked as editorial opinions.

Despite being Beltway elites, Armey and Kibbe emerged as
emissaries for the populist, anti-Washington revolution. The New
Yorker
described Armey—who flew first class and had a chauffeur—as
“the de-facto leader of the Tea Party movement.” Newsweek called
Kibbe—a former chief of staff to a Republican congressman—a Tea Party
“mastermind.”

As FreedomWorks’ profile expanded, contributions doubled from
$7 million to $14 million between 2008 and 2010. Its number of volunteers
jumped from 500,000 to 1.2 million. FreedomWorks fired up a long-dormant
political-action committee and supported hard-line conservatives—such as
Republicans Marco Rubio in Florida and Mike Lee in Utah—in Senate primary
campaigns against more moderate GOP opponents for the 2010
midterms.

Fueled by Tea Party enthusiasm, the GOP picked up 63 seats in
the House—enough for control of the chamber—six seats in the Senate, six
new governorships, and nearly 700 seats in state legislatures.

It was finally happening—Armey and Kibbe were at the center of
the most powerful conservative movement in a generation. Together they
wrote a bestselling book, Give Us Liberty: A Tea Party Manifesto,
and appeared on NBC’s Today show. Driving to Tea Party rallies
around the country, Kibbe played his Grateful Dead tapes for Armey, hoping
to convert the country-music lover.

“We had a great working relationship,” Armey says, “and we were
really making a difference.”

Matt Kibbe’s image evolved from right-wing wonk to hipster economist, and he developed a following among young staffers at FreedomWorks. Photograph by Timothy Devine.

As FreedomWorks took off, executives turned to a delicate
question: What are we going to do about Armey?

It was partly an issue of succession. Armey, the face of the
organization, turned 70 in 2010. He wouldn’t be around forever, and board
members wanted a plan for a post-Armey FreedomWorks, an executive
says.

At the same time, Armey’s public comments were making
FreedomWorks executives cringe. During a 2009 interview on MSNBC’s
Hardball With Chris Matthews, Armey told Salon’s Joan Walsh: “I’m
so damn glad you can never be my wife because I surely wouldn’t have to
listen to that prattle from you every day.” In a March 2010 speech, he
inaccurately described the Early American Jamestown colony as a “socialist
venture,” falsely identified Alexander Hamilton as an opponent of strong
central governments, and struggled to recall Winston Churchill’s name:
“Uh, with uh, help me out, uh, the great prime minister, English prime
minister,” the Post reported.

To FreedomWorks executives, Armey was becoming a liability. “In
this media cycle,” says a FreedomWorks executive, “one camera phone
watching you say something [offensive] at a rally could destroy the entire
institution.”

Armey didn’t object that the group was grooming Kibbe as his
replacement, but he had no plans to step down. He had been forced to
resign as a DLA Piper lobbyist in August 2009, when the firm’s
drug-company clients—who supported Obama’s health-care
initiative—complained about his opposition to the legislation at
FreedomWorks. Armey left Washington and began working from Texas. Without
the $750,000 salary from DLA Piper, he thought he was more likely to die
than retire.

• • •

Kibbe’s wife, Terry, had a solution to the Armey problem, a
former FreedomWorks staffer says: She thought her husband should take his
place.

Terry Kibbe had an unusual role at FreedomWorks. In 2011, she
earned $67,000 from the group as a management consultant and adviser and
had an office at headquarters. “She kind of functioned like she was
co-president,” says another former staffer. “She would send e-mails from
Matt’s account and not let anybody know it was her.”

Terry Kibbe was more ambitious than her husband and treated
Susan Armey as a rival, the first former staffer says, noting that Terry,
a die-hard libertarian, once poked fun at Susan, a devout Christian, for
praying before a meal. He adds that in 2010 Terry instructed Adam Brandon,
then FreedomWorks’ press secretary, to promote Matt Kibbe—not Dick
Armey—as the face of the organization. Around that time, FreedomWorks
employees began rerouting Armey’s press requests to Kibbe, former
officials say.

Armey and Kibbe worked together on Give Us Liberty, but Kibbe struck out on his own for Hostile Takeover.

In early 2010, Brandon showed Armey pictures of Kibbe’s
sideburns—which had previously been cut short—styled into muttonchops,
Armey says. FreedomWorks’ media department soon began calling attention to
Kibbe’s fondness for the Grateful Dead and the 1998 cult film The Big
Lebowski
.

Brandon told Armey he was “branding Kibbe” to make him more
appealing to young people, a demographic the organization wanted to reach.
FreedomWorks distributed T-shirts featuring an image of Kibbe’s
muttonchops with the phrase chops you can believe in.

As his public image evolved from conservative wonk to hipster
economist, Kibbe hit the cable-news circuit. He appeared alongside
Representative Michele Bachmann on Glenn Beck’s Fox News program, opposite
Chris Matthews on MSNBC’s Hardball, and with Maria Bartiromo on
CNBC. In the fall of 2011, Kibbe signed a contract to write another book,
Hostile Takeover—this time without Armey.

As Election Day approached, staffers noticed a change in Kibbe.
“The priorities had shifted from elections and campaigns and grassroots
and public-policy fights to something else,” says a former FreedomWorks
official. “It was about Matt Kibbe: selling books and doing Glenn Beck
TV.”

With Armey marginalized and Kibbe distracted, FreedomWorks’
headquarters became like a college dorm without a resident assistant.
After work, staff drank beer from kegs in the office kitchen and knocked
around ideas, some of them juvenile. Brandon—then the organization’s
number-two executive—produced a video in which a female intern, wearing a
panda suit, pretended to perform oral sex on another female intern wearing
a Hillary Clinton mask, Mother Jones reported. The video was
intended as a comedy to be shown during a July 2012 FreedomWorks
conference in Dallas. When other staffers objected, the video was
scrapped.

• • •

Larry Kudlow’s producer was on the phone, and she was steamed.
If Armey was going to break his commitment to appear as a guest on CNBC’s
The Kudlow Report, that was one thing. “But there is no way we
are going to book Matt Kibbe in his place,” the producer told Armey’s
assistant, Jean Campbell.

Earlier that morning, in August 2012, FreedomWorks’ press
secretary had told Campbell to cancel his previously scheduled Kudlow
appearance because she wouldn’t have time to brief him.

When Armey learned of the change, he was confused. Since when
did he need a twentysomething press secretary to brief him? Then Armey
learned that a FreedomWorks staffer had contacted the show to ask if Kibbe
could fill Armey’s slot.

“I hit the roof,” Armey says. “They consciously tried to get me
to break my commitment with Kudlow in order to get Kibbe on.”

Over the previous year, Armey had sensed that Kibbe was growing
distant. And he couldn’t figure out why reporters had stopped calling.
After the Kudlow incident, Armey says, others in the media told him they’d
had interview requests rerouted to Kibbe as well.

Armey resolved to confront Kibbe, man to man, as soon as
possible.

(Adam Brandon denies that staff at FreedomWorks ever
intercepted Armey’s interview requests, adding that FreedomWorks assigns
each media request to the staff member best suited to address
it.)

Days later, more than 100 FreedomWorks employees, activists,
and donors gathered at Wyoming’s Snake River Lodge & Spa, a 155-room
luxury hotel at the foot of Jackson Hole Mountain. Tea Party stars Rand
Paul and Ted Cruz were among the speakers at the 2½-day
retreat.

Arriving at the resort, Armey saw signs of his reduced standing
everywhere. He says that the event’s program had a picture of Matt Kibbe
in the front and listed him only in the back, along with rank-and-file
staffers, and that when he was scheduled to introduce a speaker, Terry
Kibbe took his spot onstage. “It was death by a thousand slights,” Armey
says.

He couldn’t find the right moment to confront Kibbe. But before
the retreat ended, an employee handed Susan Armey an envelope with a
document inside. “I’m supposed to get the leader Armey to sign this,” the
employee said.

Back home in Texas, Armey studied the document. It was a legal
agreement between Kibbe and FreedomWorks intended to “memorialize the
pre-existing understandings” about Kibbe’s book, Hostile
Takeover
. Armey was being asked to certify that no “significant
FreedomWorks resources were used in the writing of the book” and that
“Matt Kibbe is the sole author and copyright owner.”

But Armey had no “pre-existing understanding” with Kibbe about
this. And because many employees had helped produce the book he wrote with
Kibbe, Give Us Liberty, he figured Kibbe had used significant
staff time for this book as well. Two former FreedomWorks employees say
that about 15 of the 40 staffers helped with Kibbe’s book. But Brandon
says Kibbe wrote the book over his Christmas vacation with little staff
help.

Finally, because the first book had been contracted as property
of FreedomWorks, any earnings associated with it belonged to the
organization. This document, however, made clear that Kibbe himself would
own Hostile Takeover and any revenue it generated. Kibbe had
received a $50,000 advance for the book.

Diverting nonprofit resources for personal use is a violation
of federal tax code. If Kibbe had used “significant staff resources” to
produce his book, he would have put FreedomWorks’ tax-exempt status at
risk. Kibbe, Armey says, “had put the organization in jeopardy, and he had
done it to line his own pockets.”

Brandon disputes this assertion, arguing that Kibbe had no
interest in profiting from the book but wanted to retain the copyright
because he had written it. FreedomWorks’ in-house lawyer reviewed and
cleared the contract before Armey received the agreement, Brandon
says.

Furious, Armey and his wife flew to Maine to show the document
to FreedomWorks’ third trustee: C. Boyden Gray, a former White House
counsel.

Armey and Gray called a special meeting of the board for
Tuesday, September 4, 2012. Kibbe arrived at Gray’s DC law office without
knowing why he’d been summoned. When they were around a conference table,
Armey argued that Kibbe had pilfered his media requests and used
FreedomWorks’ resources to profit personally.

The trustees voted two to one—Armey and Gray for, Kibbe
against—to remove Kibbe from the board, and then put Kibbe and Brandon on
administrative leave.

Before Kibbe left, the trustees asked him to sign a document
preventing him from launching an organization similar to FreedomWorks for
the next four years, a FreedomWorks executive says, adding that the
agreement came with a $100 signing bonus: “It was meant to be insulting.”
(Armey denies that there was a signing bonus and says that the document
was just a confidentiality agreement.)

Kibbe refused to sign.

• • •

Armey worried that Kibbe might instruct his allies to destroy
documents related to the book deal, so he telephoned Jean Campbell, who
was waiting outside FreedomWorks’ Capitol Hill headquarters.

“Go ahead,” Armey told her.

She secured the office, marshaling employees away from their
computers and into the conference room. An armed former Capitol Police
officer accompanied her—in case there was any trouble.

“Dick Armey will be here soon with an announcement,” Campbell
told the staff.

Some 30 anxious staffers surrounded the rectangular table when
Armey and his wife marched in. Armey announced that Kibbe and Brandon had
been put on leave, but he didn’t explain why.

FreedomWorks staff divided into two camps. While some senior
employees respected Armey’s authority, many newer ones weren’t old enough
to remember his days in Congress and—because Armey worked from
Texas—didn’t really know him. In Kibbe, they found a hip libertarian who
went on television and hosted parties at his home. Younger staffers
developed a “cultish admiration” for Kibbe, a former official says. Some
even wore their chops you can believe in T-shirt at the
office.

To the young staffers, Armey seemed ill suited to run the
organization. He put three additional FreedomWorks employees on
administrative leave but—when they broke down in tears—immediately
reinstated them. Staffers say he referred to a Japanese employee with a
ponytail as “that Indian fella.” (Armey denies this.) And when Armey
kicked his cowboy boots up on a table in Kibbe’s office, that was it. “It
was kind of like, ‘Well, I’ll be damned if this is going to happen,’ ” a
young employee says.

Kibbe and Brandon had retreated to Kibbe’s Capitol Hill home,
where they contacted FreedomWorks donors, activists, and board directors
to establish support outside of headquarters. Directors were angry that
Armey hadn’t consulted them before taking action. Glenn Beck and members
of Congress called Kibbe to offer encouragement.

Soon after Armey’s takeover, a group of young Kibbe loyalists
arrived at Kibbe’s house for pizza and wine. They told Kibbe about Armey’s
office management. Among Armey’s first moves was ordering the removal of
all references to Kibbe from the FreedomWorks website. (Armey says he only
asked for the removal of references to Kibbe’s book.)

“In our limited experience dealing with Armey, [we] saw him as
this lovable grandpa,” says a young staffer. “To see him tailspin into
this power-hungry, totally out-of-touch person was really
frightening.”

The younger staffers used their cell phones to record
conversations with Armey or Campbell. They disregarded Armey’s
instructions, refusing, for example, to provide him with Kibbe’s schedule
of upcoming donor meetings. Says Armey: “They started trying to sabotage
things right from day one.”

• • •

On the day after the takeover, Armey flew to Colorado for a
donor event, leaving behind Campbell to monitor the employees. She took
attendance, read staff members’ computer screens over their shoulders, and
scribbled observations in a notebook. “She was like a drone,” says
one.

Armey still hadn’t told the staff why Kibbe and Brandon had
been put on leave. So when he arranged for an all-staff conference call,
employees piled back into the conference room expecting they’d finally get
details. Instead, Armey wanted to discuss the organization’s
“bandwidth.”

“All of a sudden I just realized that we got a lot of
bandwidth, but we got limitations on them,” Armey told the staff,
according to a recording of the call. “My guess is that we, we can do some
reallocation of that. . . . I wonder if the techie guys can get me, like
when I get back in town tomorrow, some kind of a summary on what bandwidth
we have, what the limitations are, what our usage has been, and what
reallocations we can do?”

SENIOR STAFFER: “Hey boss, when you said ‘bandwidth,’ what did
you mean?”

ARMEY: “Well there’s a technical, uh, limit on the bandwidth,
uh, isn’t there? For sending out e-mails?”

SENIOR STAFFER: “Oh. . . you mean the e-mail . . . the system
of . . . sending out e-mails?”

ARMEY: “Right, right.”

Employees snicker.

ARMEY: “I think that is . . . there’s some kind of quota or
limit on how many we can send at a time, or in a given period of time.
That they freeze up.”

SENIOR STAFFER: “We don’t necessarily have a restriction on the
number of e-mails we can send out at any one given time. We do try to
temper it so as to not exhaust the e-mail list a bit. But that’s more of a
self-imposed limitation.”

ARMEY: “I’ve betrayed my techiness backwardness
already.”

The call lasted 15 minutes.

“Did I miss something?” an employee asked
afterward.

Armey and his wife stopped at the Chicago home of Richard
Stephenson on their way back to Washington. A reclusive millionaire who
had founded the for-profit Cancer Treatment Centers of America, Stephenson
was a big FreedomWorks donor and Kibbe’s strongest ally on the board of
directors.

When Armey arrived, Stephenson introduced a therapist who he
suggested could mediate Armey and Kibbe’s dispute. Armey didn’t know it,
but Kibbe had flown in from Washington and was waiting in another room.
“If you think you’re going to therapize me into working with Matt Kibbe
again, you’re kidding yourself,” Armey told the therapist.

He had previously told Stephenson that the allegedly rerouted
media requests gave him a legal case against FreedomWorks for tortuous
interference. He calculated damages at $8 million—the potential earnings
Armey felt he’d sacrificed by staying at FredeeomWorks. (The figure is
based mostly on Armey’s $750,000 annual contract with DLA Piper, which his
position at FreedomWorks forced him to give up.)

Either Kibbe goes or I go, Armey said. “And if I go, I’m going
to have to sue. I can’t go away with empty pockets.”

As Armey left, he saw Kibbe sitting on a couch in an adjacent
room. Neither said a word.

The next afternoon, C. Boyden Gray summoned Armey to his
Washington office: Stephenson was willing to pay Armey $8 million to
retire. The deal would be arranged as a consulting contract between Armey
and Stephenson, payable in annual installments of $400,000 over 20 years.
In return, the trustees would reinstate Kibbe as FreedomWorks president
and Armey would leave the organization after the election.

Armey accepted.

Kibbe and Brandon were back in the office by the end of the day
and spent the next few weeks settling scores, former staffers say. They
labeled employees who had been helpful to Armey as “collaborators” and
stripped them of authority. Kibbe promoted two young staffers who had
remained loyal to him during the crisis, and he donated his $50,000 book
advance to FreedomWorks. (Brandon denies punishing employees and says all
promotions were merit-based.)

• • •

Armey returned to his Texas ranch not as the commanding general
of the Tea Party but as a retired civilian. He starts each day with a
series of finger exercises to help him recover from a hand condition that
required minor surgery. Then it’s on to the Wii Fit for a workout. The
rest of the day is open. He might visit his grandchildren, look after his
horses, or do chores. Occasionally, a reporter calls for his thoughts on
the political issue of the moment.

Armey says he spends a lot of time thinking about the book he
plans to write. It’s part autobiography, part economic-policy treatise.
“If you’re going to write a book that really seriously deals with
substantive ideas,” he says, “you got to spend probably five, six hours a
day daydreaming about that before committing words to paper.”

He insists he doesn’t miss the action in Washington. “I’ve got
so much going on right now over the book that I don’t sleep as well,
because I wake up with my head full of ideas.”

When he thinks about his $8-million payout, he can’t resist
laughing: “I got an offer I couldn’t refuse.”

Meanwhile, FreedomWorks is struggling. Key staffers and board
members have fled, and first-quarter fundraising has slipped. Things may
get even worse. Two watchdog groups have asked federal authorities to
examine $12 million in suspicious donations that FreedomWorks received
right before the election.

(Brandon says everything is just fine. “We haven’t had to lay
anybody off,” he says, adding that FreedomWorks has sold 16,000 tickets to
an upcoming event.)

Following the disastrous 2012 election, public support for the
Tea Party has crumbled, and establishment GOP figures such as Karl Rove
have launched initiatives to prevent less electable Tea Party candidates
from winning primary campaigns. At its most recent tax-day rally at the
Capitol, the crowd numbered in the dozens—a turnout that recalled
FreedomWorks’ early days. Now, more than ever, the movement could use a
pair of battle-hardened activists.

This article appears in the July 2013 issue of The Washingtonian.

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