ACORN corruption: Founder's brother stole $900,000 – helped elect Obama

Source:San Francisco Chronicle
http://sfgate.com/

Did ACORN get too big for its own good?
http://tinyurl.com/lk2lla
By SHARON THEIMER and PETE YOST, Associated Press Writers
Saturday, September 19, 2009

WASHINGTON (AP) --Activist group ACORN started in 1970 to help
poor people in Arkansas and by decade's end went national,
expanding into a multimillion-dollar conglomerate with a mission
so far-flung that schools now bear its name, two radio stations
are affiliates and a man its political arm endorsed is the
president. Oh yeah — and it's the unwilling star of a hot
Internet video featuring a couple dressed as hooker and
her pimp.

Acorn Pimp Video http://tinyurl.com/kwsl9h

And that last bit is just one of its problems.

The organization praised for its Hurricane Katrina relief efforts and
treated by federal, state and local governments as a valuable public
resource has had nearly $1 million embezzled from it by its
founder's brother. The openly Democratic-leaning group has seen
its employees accused of voter registration fraud, and taking it
down has become a cause celebre for Republican lawmakers,
activists and pundits.

As if volunteers allegedly signing up cartoon character Mickey
Mouse to vote didn't give ACORN enough bad publicity, the
public is enthralled with new videos distributed on the Internet
and aired on television news shows showing ACORN employees
in Brooklyn, N.Y., advising a couple posing as a hooker and pimp
to lie to get housing aid, and employees in other cities counseling
the pair on tax, banking and immigration issues.

Many Democrats used to advertise their ACORN connections.

Now, however, the Democratic-led Senate has voted to cut off its
grants from the Department of Housing and Urban Development,
and the Democrat-dominated House doesn't want it to get any
federal money period.

White House press secretary Robert Gibbs called the conduct
in the videos "completely unacceptable" and a top supporter and
prominent ally of President Barack Obama, John Podesta, is
on an ACORN advisory panel working to clean up the mess.

Republicans are using ACORN to portray Democrats as corrupt and
distract Obama from his policy agenda, the same way that
Democrats used issues involving Halliburton, the giant government
contractor and ex-employer of former Vice President Dick Cheney,
against the GOP during the Bush years. Top Republicans from
congressional leaders to California Gov. Arnold Schwarzenegger
want criminal probes of ACORN's activities and conservative
voters are pressuring news organizations for coverage.

The Census Bureau this month cut ties with ACORN for the
upcoming census, and a nonpartisan watchdog group, Citizens
Against Government Waste, named senators who voted to
continue financing ACORN as its "September Porkers of the
Month."New York Gov. David Paterson on Friday ordered
state agencies to examine all of their contracts with ACORN
over the next month and to put holds on them until the reviews
are finished.

ACORN has portrayed its problems as the unfortunate work of a few
employees. In the best case, that suggests it made bad hires and
gave them poor training and supervision. But when the founder
of a national organization admits attempting to keep quiet his
brother's theft of more than $900,000, it's a sign that ACORN's
problems may rise high and run deep.

How did ACORN wind up in this mess? Did it simply grow too
big for its own good?

The scope of government investigations into its activities is
unknown.

Voter registration fraud cases involving ACORN workers are
pending.

HUD's inspector general has acknowledged an investigation is
under way.

ACORN this past week announced an internal investigation
into the video scandal and said it won't accept new clients in
its housing program in the meantime.

ACORN chief executive Bertha Lewis has pledged do whatever
necessary "to re-establish the public trust." She condemned the
actions of the two employees who appeared in the Brooklyn
footage, but ACORN also contends segments of the video shot
there and in other cities by the hidden camera couple were
manipulated to make it look bad.

Lewis called the attacks "reminiscent of the McCarthy era."

"We understand that the Republican Party is upset and the right
wing is upset because they are out of power now," Lewis said
Friday on New York City radio station WNYC.

James O'Keefe, one of the two filmmakers, said he went after
ACORN because it registers minorities likely to vote against
Republicans: "Politicians are getting elected single-handedly
due to this organization," O'Keefe told The Washington Post.
"No one was holding this organization accountable."

The group is confident it can survive the loss of federal money
and ride out its troubles.

"The majority of our funding comes from our membership and
from our supporters," spokesman Brian Kettenring said. "Any
attempt to try to limit our access to particular sets of funding
is not likely to have much impact on our core operations. It will
hurt the individuals that benefit from that particular project.
It's pretty clear this sort of attempt to cut off funding is
politically motivated more than sort of driven by a high-minded
concern for good governance."

ACORN's annual budget is $25 million, Kettenring said. Of
that, about 10 percent is federal money and a much smaller
share comes from state and local governments, he said. The
budget covers ACORN's national office, its state and local
chapters and the ACORN Institute, Kettenring said.

ACORN doesn't file a publicly available "990" report with the
Internal Revenue Service detailing its finances, spending,
relationships and activities. Some of its arms do, but those
eports do not reflect the full range of money that ACORN gets
or all the things it does.

HUD said this past week that it has given ACORN roughly
$42 million since the 2000 budget year. A July report by
California Rep. Darrell Issa, he top Republican on the
House Oversight and Government Reform Committee,
said ACORN had received more than $53 million in federal
money since 1994.

ACORN - short for the Association of Community Organizations for
Reform Now — began in Little Rock, Ark., in 1970 as the Arkansa
Community Organizations for Reform Now.

Founded by community organizer Wade Rathke, ACORN's goal was
to merge the varied interests of the economically disenfranchised,
from welfare mothers to working people in need, regardless of race.

"I had great respect for Wade," Little Rock civil rights lawyer
John Walker recalled Thursday. "He was smart. He seemed
principled. He was dedicated. He was able to establish rapport
with people. Wade was seeking to empower the powerless by
getting them involved in the political process."

In the 1970s, Rathke succeeded in spreading the vision of civil
rights leader George Wiley to other states and in 1978,
ACORN held its first national convention.

Besides its community organizing, housing work and get-out-the-
vote activities, over the years ACORN and its various affiliates
have tackled such issues as predatory lending, a power plant
in California, a telecommunications company merger, immigration
fraud, financial literacy, racial discrimination, land use and lead
poisoning.

It opposed Wal-Mart's effort to start a bank and contends that
big-box stores often take away more from communities than they
ive. It partnered with former President Bill Clinton's foundation
to make Hurricane Katrina survivors aware of a tax credit for
ow-income workers.

ACORN in 2006 estimated the monetary value of its successful
activism over the previous decade at $15 billion.

Its affiliates include nonprofit radio stations KNON in Dallas
and KABF in Little Rock.

The stations and ACORN work closely together, share a common
mission and have offices in the same buildings, Kettenring said.

Two schools in New York City have partnered with ACORN and
bear its name: ACORN Community High School and ACORN
High School for Social Justice. The schools' state report cards
identify ACORN Community High School as in good standing or
student performance, while the other school needs improvement
in some areas.

ACORN has long been involved in local and national politics.

In the 1970s, the group supported candidates for elective office
in Little Rock and several ACORN members won elective office
themselves.

In 1984, seven local ACORN groups supported Jesse Jackson
for president in state primaries, and four years later the
organization had 30 delegates on the floor of the Democratic
National Convention on Jackson's behalf.

In the early days in Little Rock, the local power structure tried
to deal with ACORN by ignoring it, a tactic that didn't work,
recalls Walker, the civil rights lawyer.

"They were very vocal and very active for the years of their
infancy," Walker recalls. "They were very effective."

ACORN calls itself the argest grassroots community organization
of low and moderate income people in the country, claiming over
400,000 families, more than 1,200 neighborhood chapters in
about 75 cities.

The group and Obama long have been familiar with each other.

Obama helped represent ACORN in a successful 1995 lawsuit
against he state of Illinois that forced enactment of the
"motor-voter law," making it easier for people to register vote.

ACORN's political action committee endorsed Obama for president
and the Obama campaign gave an ACORN subsidiary $832,000
for get-out-the-vote activities.

In a video posted on YouTube less than two weeks before the
November election, Lewis told New York voters to "vote for
the community organizer Barack Obama."

"I've been fighting alongside ACORN on issues you care about
my entire career," Obama told ACORN leaders in November
2007, according to a posting on Obama's campaign Web sit
at the time. "Even before I was an elected official, when I ran
Project Vote voter registration drive in Illinois, ACORN was
smack dab in the middle of it, and we appreciate your work."

Pro-Democratic groups, including unions, paid branches and
affiliates of ACORN for get outthe vote activities in '07 - '08.

ACORN's longstanding connections to unions — Andrew Stern,
president of the Service Employees International Union, is
among those with Podesta on the ACORN advisory panel —
illustrates some of the contradictions found in ACORN's past.

Despite apparently sharing union priorities such as higher
pay for minimum-wage workers, ACORN got in trouble
with the National Labor Relations Board during President
George W. Bush's first term for allegedly attempting to thwart
employee efforts to unionize.

According to an NLRB case accusing ACORN of unfair labor
practices, "field organizers were expected to work long hours
each week— 54 hours — and were paid at a salary of $16,000
annually until January 2001, when the salary was raised
to $18,000."

The NLRB documented a high turnover rate for ACORN employees:
n 2000, far less than 10 percent of Dallas office employees stayed
in the job for six months, and "most did not even complete their
raining period, but quit within a few days or weeks of being hired,"
according to the NLRB.

During the Clinton administration, the Labor Department accused
ACORN arm Citizens Consulting Inc. of failing to pay workers overtime.

Kettenring had no immediate information about the outcome of
either case.

Those cases drew little attention. Not so the embezzlement scandal.

Kettenring confirmed that Wade Rathke's brother, Dale Rathke,
stole around $948,000 from the organization in 1999 and 2000,
and that Wade Rathke became aware of it in 2000 but told only
a few people. It wasn't reported to law enforcement authorities.

Dale Rathke was removed from a leadership position in 2000.

He and Wade Rathke were fired last year, and an anonymous donor
compensated ACORN for the missing money, Kettenring said.

Two then-board members sued in August 2008, accusing
Wade Rathke of concealing or failing to properly report the
embezzlement.

Wade Rathke told AP last October that he took responsibility for
his brother's "mistakes" by resigning in June 2008 as ACORN's
chief organizer. ACORN removed the two board members who
sued. Lewis said they had violated the group's code of conduct
and were "aggressively trying to distract the organization from
its core mission."

Wade Rathke said last fall that he remained chief organizer for
ACORN International. Kettenring said the two organizations have
no relationship, and that ACORN insisted that Rathke's group
change its name. Rathke's group is now known as Community
Organizations International, Kettenring said.

Rathke has said that he intended to resolve his brother's
embezzlement with "private restitution." Reporting the case
to police could have put ACORN at risk of financial ruin,

Rathke said."One choice would have been to go that way,"
he said in the 2008 interview, "but then we wouldn't have
been able to collect that money."

___Associated Press writers Kevin Freking in Washington and
Michael Gormley in Albany, N.Y., contributed to this report.

___On the Net:ACORN: http://www.acorn.org/