Freedom's Watch, a conservative political advocacy group bankrolled mainly by casino magnate Sheldon Adelson that poured $30 million into this year's political races, is shutting down.
Multiple sources said the board of directors, which includes former White House spokesman Ari Fleischer and former Ambassador to Italy Mel Sembler, has decided to close down rather than just scale down post-election.
"There are no ifs or buts," said a Republican operative close to the situation. "The board has made the decision to shut the doors."
The group always had planned a reduction after the election, and up until the Thanksgiving holiday it was considering downsizing from its peak size of about 50 staff during the campaign to a few key positions. A skeleton crew could have focused on a few issues under debate in Congress.
Now, the organization will retain one or two persons to handle the process of winding down, but a Freedom's Watch official confirmed that operationally it will cease to exist.
The group's dependence on Mr. Adelson, one of the GOP's biggest donors, was in the end its undoing.
Only a year ago, Mr. Adelson was the third-richest man in America, with a net worth of $28 billion. Flush with cash, he was the driving force behind Freedom's Watch, which registered as a political lobbying group in September 2007.
Mr. Adelson's company, Las Vegas Sands Corp., has since then lost 95 percent of its stock value, reaching a low of $2.89 a share in November, down from $122.96 a share a year ago.
A Freedom's Watch official argued that Mr. Adelson was not the only source of funds for the group and that the real problem was that a whole roster of donors, for whom politics is "between a personal agenda and a hobby," has felt the pinch of the economic crisis.
But Mr. Adelson contributed most of Freedom's Watch's money, sources familiar with the group's operation said. The organization's reliance on his largesse was such that at one point this fall all staff were herded in front of a video camera to sing "Happy Birthday" to Mr. Adelson.
Freedom's Watch boasted at the beginning of 2008 that is was poised to spend as much as $200 million on the presidential campaign and statewide races around the country.
In the end, it spent $30 million, though the organization believed it still made an impact with the resources it had.
But reports of dysfunction inside Freedom's Watch had surfaced as far back as March, when former White House official Brad Blakeman left as the organization's president. His position was not filled, though Carl Forti, a former communications director at the Republican Congressional Campaign Committee, was hired at the time as executive vice president for issues advocacy in the House.
Tony Feather, the former political director for President Bush's 2000 campaign who in 2001 founded Progress for America, a soft-money predecessor to Freedom's Watch, was hired as Mr. Forti's counterpart on the Senate side.
At its founding, Freedom's Watch touted itself as an answer of sorts to the liberal advocacy group MoveOn.org.
Freedom's Watch spent $15 million on an ad campaign supporting President Bush's surge of troops in Iraq just as Gen. David Petraeus was being summoned before Congress to testify about the strategy.
But where Freedom's Watch was seen as a top-down organization reliant on a few wealthy donors, MoveOn is seen as a bottom-up, grass-roots organization that draws its support from a massive e-mail list of more than 4 million members. It uses the list to raise money and to organize support or opposition on policy battles.
MoveOn celebrated its 10th anniversary this year and is crafting a new role for itself now that both the executive and legislative branches of government are controlled by the Democrats.
Nonetheless, Freedom's Watch spokesman Ed Patru said the group had made a significant impact during the course of its short life.
"Freedom's Watch provided an important shot of adrenaline that was in no way inconsequential at a time when conservatism was struggling," he said.