FreedomWorks Seeks to Shape GOP's Future

When Republican Dede Scozzafava suspended her campaign in New York's 23rd congressional district this weekend, it came completely out of left field...or in this case, right field, for the political establishment.

In a matter of weeks, the congressional race in the relatively obscure upstate New York district has become the epicenter of what some are calling a "civil war" over the soul of the Republican Party and what it should stand for in the Obama era.

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But to the conservative grass roots organization FreedomWorks, the upheaval in New York's 23rd district wasn't a surprise at all -- but rather, the pinnacle of months of planning, building a movement to shape the future of the GOP.

FreedomWorks, which started in 2004, is dedicated to lower taxes and less government, and claims to have 400,000 members. They aspire to be the equivalent of MoveOn.org for the right, It is an organization with the power to purge moderates in the GOP and promote what they deem to be "pure" conservatives.

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The group's efforts made national headlines last spring when the Washington, D.C.-based advocacy group tapped into public discontent, organizing tea parties on April 15, to protest taxpayer funds being used for government bailouts.

While tea parties -- an echo of America's patriot past -- seemed almost comic to some, something very real began to happen in public opinion and the polls: confidence in President Obama and his policies slowly eroded and anger erupted at town hall meetings during the congressional recess.

Between the discontent over the Wall Street bailout, economic stimulus, immigration, and health care, conservatives unleashed their grievances at Obama in a Sept. 2009 rally in the nation's capital. But was it the beginning of a true mass movement, or the culmination of a summer of rage on the right?

"Nightline" went to South Florida to see at the ground level what the grass-roots movement FreedomWorks is really about and to address critics' contention that it's a corporate front -- an "AstroTurf" movement -- not from the bottom, up.

Locals Rally Against Health Care, Socialism

On the patio of the Yard House restaurant in West Palm Beach, Fla., over 100 locals gathered to denounce health care reform, the Wall Street bailout, the economic stimulus, taxes, deficits and a lot more.

"I guess [the rally is] to stop Congress from turning us into a socialist nation," said rally attendee Ray Palmer. "I know they say this is not socialism, but when a government takes over the finance, insurance industry -- you know, I am a fiscal conservative -- we have to get back to the Constitution."

Former House Majority Leader and Texan Dick Armey is the chairman of FreedomWorks, and has been credited with revitalizing the group, and mobilizing conservatives across the country to come out to rallies in the name of freedom.

"The current movement that you see right now ... is the greatest grass roots mobilization of people of concern and intention on economic issues that I've ever seen," he said.

FreedomWorks Silent on Corporate Donors

"Nightline" spoke with Armey at an opulent beachfront condo of one of FreedomWorks' backers. It's a well-funded group, but its corporate donors were not something Armey wanted to discuss.

"We never discuss our contributors," he said. "As we have a grass roots organization, we by and large have grass roots donorship."

When asked if it would be better for people to know where FreedomWorks' money is coming from, Armey said the group's backers must be protected.

"You have to protect people from harassment and there is main harassment that falls on our contributors," he said. "I'm also an advocate for privacy rights and you have a right to be private."

While Armey didn't want to discuss which backers pay his $550,000 a year salary, like so many of the tea party protestors, he did want to talk about health care.

"We got the bad guys on the run, I think we have -- given the massive, great big government takeover of health care -- a tko for the time being, but they are not going to go away empty-handed and don't overlook the possibility that they could cram this down our throats," Armey said.

To Armey, and a newly energized conservative base, health care reform is simply a grab for government power and yet another form of leftist tyranny.

"Big shots in Washington want to be in control. They want the government to run health care. There's no denying that," he said. "It is an intrusion of my liberty guaranteed by the Constitution, the sacred document that they swore an oath of allegiance to, the Constitution."

But when Armey was in Congress for 18 years, he received health care through a government program -- the Federal Employee Health Benefit Plan -- which is subsidized by taxpayers. And before that, he was on the state payroll in Texas, teaching at Texas State University.

When "Nightline" asked Armey if his stance on health care was hypocritical, given his history, he responded, "I would say, you are being silly. I got employer provided insurance like most of the people in America."

Nightline: Your employer was the government.

Armey: My employer was the House of Representatives. My employer was the Texas State University. But, that is not a reason why I should be opposed to your having your insurance imposed on you by the federal government.

Racial Component to FreedomWorks Rallies?

The movement Armey seeks to lead was born in an eruption of populist anger at the massive Wall Street bailout President Bush signed a year ago. And it surged after Obama was inaugurated.

Some critics of the movement note that the vast majority of people at the rallies are white people -- and they point to a few hateful signs that have dotted the crowds.

Former President Jimmy Carter said the anger was all being fueled by racism. "An overwhelming portion of the intense animosity directed at President Barack Obama is based on the fact that he is a black man," Carter said in an interview with NBC earlier this year.

Armey disagrees with Carter, saying, "Jimmy Carter's all wet. Poor fella, I feel bad for him. But he's just flat all wet."

Instead, Armey told "Nightline" the fact that those who attend FreedomWorks' rallies are overwhelming white is a point of concern for the growing organization.

"Of course it concerns me," he said. "There's no more natural constituency for small government conservatism and restraint to big government, in my estimation, than Hispanic and black Americans. The Republican party has not done a good job of speaking to these two groups."

Later that evening, "Nightline" accompanied Armey to another gathering in Coral Gables, with a turnout far lower than the 500 FreedomWorks had predicted.

Bringing up the issue of race with one young mother in the crowd brought anger and fear to her voice.

"Why would [Obama] be associating with people who are avowed Marxists, about communists, people who have questionable pasts at best," she said. "I tell people, 'look, he can be black, white, red, Barney for all I care, really.' I mean, that's my standard phrase. He could be purple. But if I don't think he is protecting the Constitution, protecting our country and our troops..."

Then Armey showed up, gave his spiel, and moved on. Another day in the conservative counter-revolution.