PAC profile: FreedomWorks for America

Introduction

Type of organization: Super PAC

Supports: Conservative candidates

Founded: Sept. 6, 2011

Website: freedomworksforamerica.org

Social media: Twitter profile, Facebook page, YouTube channel

Principals:

• Ryan Hecker (COO, treasurer, legal counsel): A Houston-based activist who laid out a platform for the nascent tea party on his online “Contract from America.”
• Russ Walker (executive director, assistant treasurer): Head of Oregon’s FreedomWorks chapter that funded a campaign against two ballot initiatives that would have raised taxes on the wealthy and corporations in 2010.
• Matt Kibbe (president and CEO of Freedomworks, Inc.): Tea party architect, former chief economist for the Republican National Committee and policy analyst for Citizens for a Sound Economy.
• Dick Armey (now ex-chairman of FreedomWorks Inc): A leader in the tea party movement, Armey is a former Republican House Majority Leader and co-author of the 1994 Contract with America. He left FreedomWorks in the fall of 2012.
• Dean Clancy (assistant treasurer): FreedomWorks legislative counsel who served as a senior policy adviser to Armey.

Profile:

FreedomWorks for America is part of a political one-stop shop. In addition to the super PAC, there is FeedomWorks, Inc., a 501(c)(4) “social welfare” nonprofit; FreedomWorks Foundation, a 501(c)(3) nonprofit; FreedomWorks, Inc. PAC, a traditional political action committee and various state-level PACs.

The FreedomWorks nonprofit was born in 2004 from the merger of Empower America and Citizens for a Sound Economy, an industry-funded think tank promoting deregulation and funded in large part by the billionaire brothers Charles and David Koch. After two federal court rulings, including the U.S. Supreme Court’s Citizens United decision, made way for super PACs, FreedomWorks spawned one of its own: FreedomWorks for America.

A major tea party benefactor, FreedomWorks for America “utilizes its over a million-strong grassroots volunteer base to elect candidates who fight for lower taxes, less government and more freedom,” according to its website.

Even as the group’s website urged visitors to “Fire Obama,” FreedomWorks for America was not shy about targeting Republican candidates. Ahead of the election, the organization rated dozens of congressional and presidential candidates — and its top presidential picks for the Republican presidential nomination were Ron Paul and Newt Gingrich.

In 2012, the super PAC poured money into Senate primaries, throwing its support behind Republican candidates Adam Hasner, Richard Mourdock and Donald Stenberg. The group also spent money opposing incumbent Sens. Ben Nelson, D-Neb., and Richard Lugar, R-Ind. The organization focused a signficant portion of its early expenditures on thwarting the re-election of Utah’s Republican Sen. Orrin Hatch, an effort that was unsuccessful.

FreedomWorks for America became especially active in the U.S. Senate GOP primary in Texas where Ted Cruz, the tea party favorite, and Lt. Gov. David Dewhurst, who was preferred by many in the GOP Party establishment, faced off. Cruz ultimately won after the primary went to a runoff between the two men. The super PAC spent more than $487,000 supporting Cruz and attacking Dewhurst prior to the runoff.

The super PAC released several waves of online ads targeting contested U.S. Senate races, including 11 on Sept. 17, as the Center for Public Integrity reported.

By the end of March, nearly half the super PAC’s receipts were from its sister nonprofit, FreedomWorks Inc. April’s report to the Federal Election Commission revealed that the super PAC continued to receive major funding from the nonprofit, with $155,000 out of $345,000 (44 percent) raised in April coming from FreedomWorks Inc. in the form in in-kind contributions for staff, overhead and travel.

The trend continued in the subsequent months, but changed dramatically in the fall.

Specialty Group Inc. of Knoxville, Tenn., wrote seven checks totaling nearly $5.3 million to FreedomWorks for America in early October. By Election Day, the company’s total giving was $10.6 million.

The corporation was created on Sept. 26. The name and address listed on incorporation records are those of a Knoxville, Tenn., area attorney named William S. Rose, Jr. Another of Rose’s companies, called Kingston Pike Development LLC, also donated $1.5 million to FreedomWorks for America.

On Dec. 20, the Campaign Legal Center and Democracy 21, two campaign finance reform groups, filed complaints with the Federal Election Commission and Department of Justice allegedly that Specialty Group and Kingston Pike were “straw companies” created to obscure the true source of political contributions from the public.

On Dec. 27, the Washington Post reported that Richard J. Stephenson, a reclusive Illinois millionaire who founded the for-profit Cancer Treatment Centers of America and sits on FreedomWorks board, was the original source of the money that went through Rose’s companies.

In April, the Center reported on the large salary and first-class flights for FreedomWorks chairman Dick Armey.

The former Republican House Majority Leader tendered his resignation from the organization on Nov. 30, according to Mother Jones. Armey was upset with the direction of the organization and left with an $8 million pay-out.

Advertisements:

• A January ad entitled “Defeat Orrin Hatch in Utah” claimed the senator’s 35-year career was riddled with broken promises, including support for auto industry bailout.
• A September ad took aim at President Barack Obama’s handling of the economy. In “You Broke It, You Own It,” FreedomWorks blamed Obama for citing natural disasters to deflect blame for the slow economy since 2008. The ad was created by independent filmmaker Ben Howe, who is also responsible for the Obama Volt parody ad, the Center for Public Integrity discovered.
• Tea party-aligned U.S. Senate candidate Ted Cruz, a Texas Republican, garnered support from FreedomWorks, which ran ads calling Cruz a “special candidate” and likening him to former President Ronald Reagan.
• “All Hat and No Cattle,” an ad against David Dewhurst, the lieutenant governor of Texas and Cruz’s rival, put a photo of his head on an animated bucking bronco. The ad accused him of being a “country club moderate,” not a “conservative cowboy.”
• This ad released in July featured an incorrect news report that liberal billionaire George Soros was backing an anti-Allen West super PAC in Florida.
• This pro-Cruz ad that aired in Texas in early July said Cruz was “fighting the epic fight” against the Affordable Care Act.
• “Senator Space Cadet” opposed Sen. Bill Nelson, D-Fla.

Last Updated: Jan. 16, 2013