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Activists Question FreedomWorks' Direction

The tension hit a boiling point this summer when Armey was asked to sign off on a deal that Kibbe had secured to write a book, “Hostile Takeover,” according to sources familiar with the situation. Armey refused, concerned that the agreement was structured to personally benefit Kibbe, even though FreedomWorks employees helped write and market the book, which was released in June. Armey and others at the organization were worried that the arrangement could violate the group’s nonprofit tax status, those sources said.

If FreedomWorks employees or resources were used to write the book, the organization owns rights to that book by default, said Marcus Owens, a lawyer at Caplin & Drysdale, who for a decade directed the IRS division responsible for approving organizations’ charity status. Brandon said fundraising appeals featuring the book helped raise more than $355,000 for FreedomWorks, while Kibbe earned about $50,000 in profits from sales.

In early September, Kibbe and Brandon were placed on administrative leave. After they returned, staff email accounts were purged and Armey agreed to resign his role as chairman in exchange for an $8 million payout. Days later, Kibbe and Outreach Director Deneen Borelli were on the road for a multicity series of events on race relations that doubled as a book tour for both of them.

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