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$12m donation to Freedomworks laundered thru shell company may have violated

Federal Law

New details are emerging about how a multi-millionaire used shell corporations to funnel money to the Super PAC associated with embattled Tea Party group FreedomWorks for America -- and how those laundered contributions may have violated federal law.

Dick Armey
FreedomWorks, which until recently was led by former House majority leader Dick Armey and GOP activist Matt Kibbe, has been in the midst of turmoil, with Armey abruptly resigning weeks after the November 2012 elections. Soon after his resignation became public, it was revealed that a majority of funding for the FreedomWorks Super PAC came from from Specialty Investments Group Inc. and Kingston Pike Development Corp., two corporations incorporated on September 26 and 27, respectively, and which gave over $12 million to FreedomWorks in the six weeks between their incorporation and election day.

Knoxville, Tenn.-based attorney William S. Rose incorporated both groups and is listed as Specialty Investments Group's CEO (and put his $634,000 home as its principal address). Both corporations have done little else besides give money to FreedomWorks, but Rose has denied that the entities are shell corporations, calling the business of the new companies a "family secret."

Two election watchdog groups are not buying Rose's claims. The Campaign Legal Center and Democracy 21 filed complaints with the Federal Election Commission before Christmas alleging the donations from these companies to the Super PAC violate federal law prohibiting political contributions from being made in the name of another person.

The contributions "raise serious questions about whether this was an illegal scheme to launder money into the 2012 elections and hide from the public the true identity of the sources of the money," said Fred Wertheimer, president of Democracy 21.

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Watching the goings on at Freedomworks is far funnier than anything on TV.