Dick Armey Defends His $8 Million Deal to Leave FreedomWorks

Dec. 29, 2012— -- Former House majority leader Dick Armey says he took an $8 million consulting deal in return for leaving the conservative organization FreedomWorks because the group was "dishonest" and because he "couldn't leave with empty pockets."

The arrangement, he says, will allow him to "never have to work again forever."

In an interview with ABC News as he was winding down his Wii Fit workout, Armey spoke frankly and at length about his dispute with FreedomWorks, his eyebrow raising consulting contract, and the strategy of the Republican Party.

Armey, 72, was a leader in the 1994 Republican takeover of the House and became House majority leader. He retired from Congress in 2002 and had become a leader of the Tea Party movement in recent years.

The Washington Post this week detailed what it called a coup Armey tried to pull off at FreedomWorks in September with the help of gun carrying aide after his relationship with FreedomWorks' president, Matt Kibbe, became hostile.

While Armey disputes the description of using an armed aide to conduct a coup, he admits that he agreed to leave FreedomWorks as part of a deal with Richard Stephenson, president of the for-profit Cancer Treatment Centers of America.

Under the terms of the deal, Armey will receive $400,000 a year until he is 92 – a total of $8 million – to be a consultant for Stephenson.

"I can talk about economics because I am an economist," Armey said. "I can talk about what's going on on the Hill, in politics, who's a winner, who's a loser, things of that nature."

Stephenson stepped in, Armey says, because he "was concerned I was going to resign (from FreedomWorks) and sue them before the (presidential) election. He didn't want an uproar. We all understood if I take any action that made it at all public it would be a press nightmare and we didn't want that before the election…

"So Dick was saying, 'You know, Armey, my family and I have heard your story, about how you can't afford to retire and we want to help with your retirement,'" Armey said.

The former leader of the House Republicans said it was a deal he just couldn't refuse.

"I can't stay here (FreedomWorks), I can't work with people like this, and I can't afford to leave with empty pockets," Armey said.

He said his choice was to put in "10 years of hard labor" to win control of FreedomWorks when Stephenson said to him, "'Instead of hard labor, how about you never have to work again forever?' How many people are going to have trouble of making that choice at the age of 72?"

Armey said his fight with Kibbe was prompted by "pretty underhanded stuff," essentially a battle over royalties being paid to Kibbe instead of FreedomWorks for Kibbe's book "Hostile Takeover." Armey claims FreedomWorks' staff provided research and marketing help for the book and Kibbe tried to get Armey to sign a memorandum saying he did not use the organization's resources.

"We had a very dysfunctional organization that was being used primarily at that time scheduling all kinds of things in the interest of establishing a reputation for Matt and selling his book," Armey said. He also complained that he was being kept out of fundraising meetings and press requests for himself were being redirected to Kibbe in an effort to make Kibbe the face of the Tea Party movement.

"I must say the trespass against me was so comprehensive and so eroding of my critical asset -- and my critical asset is my relationship with the press," Armey said. "I actually had a court case, a case I could have taken and I did consider doing so, but we decided we wanted to try and handle it quietly outside of the press pursuant to the condition was I could not work with these guys anymore. You can't take people who you indisputably understand to be dishonest and dangerous to the organization in their dishonesty and continue working with them."

Neither Kibbe nor FreedomWorks Vice President Adam Brandon would talk about Armey's accusations and the group's press secretary Jacqueline Bodnar said only, "We want to thank Dick Armey for his years of service. We are focused and excited heading into 2013 and we wish him well."

"We are just moving into 2013," Bodnar said. "FreedomWorks has always had the same mission to create a winning constituency of activists of limited government. We've always done that and we will continue to do that in 2013 and we are excited to do that in 2013."

The man who was one of the leaders of the 1990s "Republican Revolution" said he was "hurt" by the report of the armed coup.

"I'm getting a hail storm of caricatures about me now being some kind of gun toting crazy man that I don't appreciate at this time in my life to be characterized in that way," Armey said.

Armey said he is concerned about the future of both the Tea Party and the Republican Party and how you "mend fences" with groups that have become completely alienated by their party.

Despite that alienation, he defended FreedomWorks' decision to pour money into races like Todd Akin's in Missouri after his controversial comments about "legitimate rape." Akin lost to Democratic incumbent Sen. Claire McCaskill, who had been expected to be easily defeated.

"They say Akin said a dumb thing. Look if you never again ever campaigned for every politician that ever said a dumb thing you would never campaign for any politician, and more than one politician has made a comeback after saying a dumb thing," Armey said.

He said it's clear both the GOP and the Tea Party needs work.

"The Republican Party seems to be more inept than ever and the Democratic Party seems to be more skillful than ever…We had the magic of Ronald Reagan in 1980 and we had the magic of the contract in 1994, but you can't sit around and wait for the next great man to come along or the next great moment," Armey said.

"How do you mend fences? Like the Hispanic vote. You can't call her ugly all year round and expect her to go to prom with you. There is no more natural constituency for the values of the Republican party…than the Hispanic community…but our party has so alienated them that they are giving their votes to the Democrats. I always laugh this is a party that was born with the emancipation proclamation and we can't get a black vote to save our life."

Armey thinks the Tea Party is less relevant now because in 2010 "FreedomWorks was the spark plug, the command center, the switchboard, the information clearing house for that whole movement and we were focused on that."

"In 2012, Freedomworks spent its time monkeying around with Glenn Beck, didn't put money in critical races. If they spent half of the money in Utah becoming the enemy of Orrin Hatch and put the money in Missouri, Akin would never have become the nominee," Armey said.

He is frank that he's not sure how he will stay relevant, but he wants to "stay active in the cause of liberty and small government."

"I don't know how I'm going to do that," Armey said.