For ACORN Video Is Only Latest Crisis
By Carol D. Leonnig and Alexi Mostrous
Sunday, September 20, 2009
The
liberal political organizing group ACORN faced internal chaos and allegations
of financial mismanagement and fraud long before two young conservatives
embarrassed the group with undercover videos made at field offices in
Internal ACORN documents show an organization in
turmoil as last year's presidential election approached, with a board torn over
how to handle embezzlement by the founder's brother and growing concern that
donor money and pension funds had been plundered in the insider scheme.
Minutes from a meeting ACORN held in
Some top ACORN officials tried to shield the
scheme, which involved Dale Rathke, the brother of ACORN founder Wade Rathke.
"Leadership has no faith in staff. Wade betrayed them," the minutes
said.
The documents present a troubling picture of one of
the nation's leading social justice advocacy groups, with more than 400,000
members, offices in 75 cities and an expanding international presence.
Founded in 1970 and supported in part by government
grants, ACORN has forged relationships with banks, federal and state agencies,
and nonprofit groups that have made it a major force in helping low-income
families buy homes and in bringing marginalized voters to the polls. The ACORN
political action committee endorsed Barack Obama in February 2008.
ACORN said in a statement Saturday that it has
taken "decisive action" to correct problems detailed in the
documents, which it said were stolen and leaked to investigators for a House
oversight committee. Spokesman Brian Kettenring said ACORN has reorganized, severed its connections to Wade Rathke and
"been made whole relative to the monies stolen in 1999-2000." He also
said that "arrangements have been or are being made to correct all tax
delinquencies."
An investigation by Republican members of the House
Committee on Oversight and Government Reform also showed that there was concern
within ACORN that its voter outreach efforts, which are required to be
nonpartisan, were aimed at electing Democratic candidates, a key complaint of
conservative critics.
In a June 2008 report to ACORN,
"My question all along was, are we funding a
liberal political agenda with taxpayer dollars without knowing it?" said
Rep. Darrell Issa, (R-Calif.), who co-sponsored last week's House legislation
cutting off ACORN's federal funding and led the oversight committee
investigation whose findings were released in July. "By the end, it was
clear to me, this organization can't assure anybody, including itself, that it
won't use our money for partisan politics."
Conservative ire over ACORN has been building since
the 2008 elections, for which the group mounted voter-registration drives that
helped propel the victories of Obama and other Democratic candidates. The Obama
campaign paid Citizens Consulting of New Orleans, a close ally of ACORN, more
than $800,000 for get-out-the-vote activities, and the group's political action
arm endorsed Obama.
Obama's ties to ACORN date to his days as a
community organizer in
Obama has said previously that ACORN did not advise
his presidential campaign. "We don't need ACORN's help," he said in
October.
Issa's investigators unearthed e-mails and
documents offering details of how the organization reacted to the discovery
that Dale Rathke, the former chief financial officer of ACORN, had embezzled
$947,000 in 1999 and 2000. Wade Rathke left his post as ACORN's chief organizer
in June 2008 after the embezzlement was discovered.
Neither the full ACORN board nor most of its staff
members knew about the embezzlement until a donor revealed it in 2008, eight
years later. ACORN reached a private settlement with Dale Rathke in which he
and his family agreed to repay the money that, according to ACORN documents, he spent on luxury hotels and trips on the
Minutes of an ACORN conference in
"Wade never fully told anyone on the
board," the notes show. "He allowed Dale to continue working for
ACORN and despite his assurances to the management committee at the time
allowed him to continue being involved with almost all finances."
Under the confidential settlement, the Rathke
family agreed to repay ACORN at a rate of $30,000 a year. Wade Rathke could not
be reached, but he told the New York Times last year that the organization
counted the losses as a loan on financial records, rather than reporting it to
police, because word of the embezzlement would have put a "weapon" in
the hands of conservative enemies.
Issa said his inquiry found a handful of Wade
Rathke loyalists in charge of nearly 200 entities and affiliates with varying
status -- some tax-exempt, some political -- but with blurred lines.
"If you weren't interested in merging all your
corporate entities to foster one political end, why did you create this
structure that would allow you to do just that?" Issa said.
In a statement, ACORN called the committee report
not credible and said it was normal for community organizations to maintain
separate functions.
Issa said ACORN's financial problems invite
questions about its voter-registration efforts. ACORN reported collecting more
than 1 million applications from low-income people and minorities in the 2008
election, compared with 500,000 in 2006.
"If we can't trust them in one area, what
makes us think we can trust them in another?" he said.
ACORN, which is funded with government money and
private donations, works under a variety of affiliates to encourage
homeownership and civic involvement among low-income citizens. Its offices in
the District and
As the videos gained traction online, calls for
criminal investigations and an end to funding have intensified. Georgia Gov.
Sonny Perdue and Louisiana Gov. Bobby Jindal, both Republicans, have ordered
state agencies to cut off ACORN's funding. In
Meanwhile, based on information provided by ACORN,
authorities in
In
"We keep getting information," he said.
"We don't have many resources, but we're not running out of
whistles."
ACORN relies on federal funds for about 10 percent
of its $25 million annual budget. ACORN and allied groups have received about
$53 million in federal funds since 2004.
Despite a move last week in Congress to block
ACORN's funding, Kettenring said cutting off federal support "would have a
negligible impact on our core operations."
Research editor Alice Crites contributed to this
report.