Archive for the ‘Wade Rathke’ Category
ACORN Plans Massive Layoffs
Posted by Matthew Vadum in ACORN, Featured Story, News, Wade Rathke on October 3rd, 2009
A credible source claims the embattled left-wing advocacy group ACORN is poised to announce massive staff layoffs but an ACORN spokesman denies this is the case.
A credible source close to the Association of Community Organizations for Reform Now revealed that the activist network intends to lay off all staff members operating out of its New Orleans headquarters. All information provided by the source to this reporter in the past has turned out to be correct.
However, ACORN spokesman Scott Levenson of the public relations firm The Advance Group in New York City said the source was incorrect.
In an interview Friday afternoon with Levenson said (referring to BigGovernment.com), “You guys just can’t get it right. You’re wrong again.”
When pressed to elaborate, Levenson declined to do so.
Levenson received media attention earlier this year when Fox News host Glenn Beck ejected the combative publicist from his studio during a commercial break. Beck said at the time that Levenson accused him of being a racist.
My source said that one of the employees to be cashiered in the Crescent City is the daughter of disgraced ACORN founder Wade Rathke. Rathke’s wife, Beth Butler, also works for ACORN but it is unclear at this point if she too will be laid off. Rathke’s son also reportedly is employed by ACORN.
ACORN also plans to lay off two-thirds of its Washington, D.C., staffers as soon as Wednesday of next week, according to the source. Layoffs will also extend to ACORN’s affiliate the ACORN Institute.
The source also revealed that all or most of ACORN’s development staff in the group’s New York City office will soon be laid off if they haven’ been laid off already.
ACORN’s already tarnished image took a major hit last month when BigGovernment.com unveiled undercover sting videos in which ACORN staffers across America were shown advising a pair posing as a pimp and a prostitute on the finer points of avoiding prosecution for prostitution, importation of underage illegal aliens to serve as sex workers, obtaining government grants under false pretenses, and tax evasion.
The adverse publicity generated by the videos and the group’s never-ending scandals is slowly but surely drying up ACORN’s funding sources.
Census Cut Ties With ACORN; It Should Cut Ties With SEIU, Too
Posted by Rep. Mark Kirk (R-IL) in ACORN, Politics, Wade Rathke on September 29th, 2009
The U.S. Census Bureau delegated work to outside groups for the federal 2010 census. Following the release of undercover videos showing ACORN workers helping a fake pimp and prostitute illegally secure housing, the Census Bureau terminated its partnership with ACORN. The House and Senate voted to block federal funding for ACORN and ACORN-related affiliates, including SEIU. While the Census Bureau terminated its partnership with ACORN, it left its close connection with SEIU intact.
Given SEIU’s co-location with ACORN in Chicago and SEIU’s intimate financial relationship with ACORN, we should take action to protect the public from the corruption of the 2010 census. To defend the integrity of the process, the Census Bureau should end its close relationship with ACORN’s close sister organization, the SEIU.
Official filings show that SEIU, referenced in the U.S. Attorney’s indictment of Governor Rod Blagojevich, contributed more than $4 million to ACORN and its affiliates since 2006. According to recent Department of Labor filings, the SEIU employs ACORN Founder and ACORN International Chief Organizer Wade Rathke. Mr. Rathke was recently exposed for running a cover-up of an embezzlement scheme run by his brother.
In Chicago, SEIU Local 880 and SEIU Local 1 contributed more than $230,000 to ACORN groups in Illinois and Texas since 2006 – the most recent to “support election efforts.”
SEIU Local 880, which until recently boasted it was founded by ACORN, used an ACORN e-mail address on its Web site and tax filings, was co-located with an ACORN “tax center” and employed the former president of ACORN Illinois, according to official records. Recently, the IRS terminated is relationship with ACORN tax preparation offices.
In a 2006 end-of-year report issued by the House Committee on Oversight and Government Reform, SEIU Local 880 recounted working with ACORN to reelect Governor Blagojevich and referred to ACORN as its “sister organization.” A new report issued by the Committee in July reports SEIU and SEIU Local 880 are official members of the “ACORN Council,” according to whistleblower documents acquired by the Committee.
Earlier this year, SEIU Local 880 became “SEIU Health Care Illinois and Indiana”, located on the floor below ACORN Housing’s national headquarters and rents its own space from an ACORN front group called the “Chicago Organizing and Support Center” (COSC).
Official documents show COSC registered at two addresses – one in Chicago (at the same address as SEIU Local 880/ACORN) and one in New Orleans (at the same address as ACORN New Orleans). The Illinois Secretary of State’s Web site shows COSC’s incorporation status was revoked on September 11, 2009 – one day after the ACORN videos surfaced. The Louisiana Secretary of State shows the group’s status active but not in good standing for failure to file its annual report. The House Committee on Oversight’s July report also named COSC as a member of the “ACORN Council.”
SEIU and ACORN Timeline in Illinois
1983 – SEIU Local 880 claims it first organized through ACORN
2002 – SEIU Local 880 files tax return using ACORN email address as contact
2006 – Local 880’s Web site last updated; email seiu880@acorn.org ; address 209 W. Jackson, Chicago
2006 – SEIU Local 880 (located at 209 W. Jackson, Suite 201) disburses $92,006 to Illinois ACORN WNB (located at 209 W. Jackson) for “Membership Campaign Service”
2007 – SEIU Local 880 (located at 209 W. Jackson, Suite 201) disburses $60,118 to ACORN Chicago (located at 209 W. Jackson) for “Membership Services”
2007 – SEIU Local 880 employs former ACORN Illinois President Denise Dixon
2008 – SEIU Local 1 (located at 111 E. Wacker in Chicago) disburses $58,150 to “Houston ACORN” for “Reimbursements for Lost Time” and another $20,000 to “Support Election Efforts”
2008 – Lake County voter registration fraud allegations linked to SEIU coordinator
2008 – Illinois Secretary of State revokes status of ACORN on November 14th
2008 – ACORN’s Web site lists Chicago ACORN’s “Tax and Benefit Access Center” at 209 W. Jackson, 2nd Floor in Chicago
2008 – SEIU Health Care Illinois & Indiana pays rent to Chicago Organizing and Support Center
2009 – Illinois Secretary of State revokes status of ACORN Community Labor Organizing Center on January 9th
2009 – SEIU Local 880’s Form LM-2 (located at 209 W. Jackson) declares Local 880 ceased operations as of March 31, 2009 and transferred all remaining assets to “SEIU Health Care Illinois Indiana”; SEIU Health Care Illinois & Indiana’s Web site shows address at 209 W. Jackson, Suite 200 in Chicago
2009 – U.S. House Committee on Oversight and Government Reform report on July 23rd names 361 entities in the “ACORN Council,” including Chicago Organizing and Support Center
2009 – Illinois Secretary of State reports “involuntary dissolution” of ACORN Community Land Association of Illinois on August 14th
2009 – IL Secretary of State revokes status of Chicago Organizing and Support Center on Sept. 11th
ACORN Saga: Founder Wade Rathke Wants YOU — To Go on Welfare
Posted by Matthew Vadum in ACORN, Wade Rathke on September 29th, 2009
Association of Community Organizations for Reform Now (ACORN) founder Wade Rathke wants to use the Internet to overthrow the capitalist system.
He said so in his new book, Citizen Wealth: Winning the Campaign to Save Working Families, in which he serves up some community organizing war stories, and offers his thoughts on the future of organizing. Rathke’s currently on a cross-country book tour.
ACORN founder Wade Rathke (to the right of the microphone) at an ACORN-SEIU rally.
Rathke, a pioneer of the so-called welfare rights movement that aims to get Americans on welfare, devotes an entire chapter of his book to what he calls “The ‘Maximum Eligible Participation’ Solution.” It is a strategy for orchestrated crisis that savvy leftist groups across America are likely to embrace. He writes:
“[I]t is hard to believe that we cannot assemble the troops to mount a campaign for maximum eligible participation that harvests the opportunities and dollars already available if we could achieve full utilization of existing programs.”
Rathke acknowledges his support for the Cloward-Piven Strategy, an approach to radical social and political change articulated by Marxist university professors Richard A. Cloward and Frances Fox Piven in a 1966 Nation article, “The Weight of the Poor: A Strategy to End Poverty.” The two academics called for “a massive drive to recruit the poor onto the welfare rolls” in an effort to overwhelm the system. [Italics in original.]
The strategy helped to bankrupt New York City in 1975. Years later, the Big Apple’s mayor, Rudy Giuliani, denounced the academic activists by name. “This wasn’t an accident,” Giuliani argued in a 1997 speech. “It wasn’t an atmospheric thing, it wasn’t supernatural. This is the result of policies and programs designed to have the maximum number of people get on welfare.”
In the Nation article, Cloward and Piven made it clear that they were irritated that plenty of Americans legally eligible to receive forcibly redistributed wealth hadn’t bothered to ask for handouts. “The discrepancy is not an accident stemming from bureaucratic inefficiency; rather, it is an integral feature of the welfare system which, if challenged, would precipitate a profound financial and political crisis.”
In his book Rathke hails “Cloward and Piven’s exciting call to arms.” He notes that the activist group they created and that he organized for in the late 1960s, the now-defunct National Welfare Rights Organization, caused “a flood tide from its work that allowed many boats to rise, including the level of participation in government assistance programs.”
In an interview with DailyKos blogger Robert Ellman, Rathke complains bitterly that Americans are not getting all the government benefits to which they are legally entitled. (The podcast is available here.)
With one question, Ellman unwittingly lays bare the anti-social, profoundly un-American entitlement mentality that so many on the far left possess. The blogger asks if the “lack of participation” in food stamps, Medicaid, and the State Children’s Health Insurance Program (S-CHIP), all of which many eligible people are not claiming, is “a failure of government, political will, or a culture that demonizes poor people?”
The unctuous Rathke, whom some have called a cult leader, doesn’t miss an opportunity to compliment his interviewer. “Once again you’ve hit the trifecta,” he says. “It’s really all three of those things.”
Rathke quotes approvingly from a New York Times op-ed by his fellow progressive poverty pimp, Barbara Ehrenreich, in which he says she does
a devastating job of looking at the fact that we’re still criminalizing poor people, requiring fingerprints in states like Florida and Texas and California. For even simple welfare applications and food stamp applications, we are going out of our way, and she quotes chapters and verse from various professors, to make it almost easier to do anything in the world other than get benefits that people are legally entitled to.
Incidentally, ACORN knows all about food stamps. Even though people on welfare shouldn’t be trying to buy homes, ACORN cajoled banks into accepting food stamps as income on mortgage applications and then bragged about it.
Returning to the interview, soon Rathke’s comments bring to mind the Will Rogers quip, “Be thankful we’re not getting all the government we’re paying for.” Laying out a strategy for orchestrated crisis for the Information Age, Rathke says:
If we just did the job that we needed to do to make sure everything that’s legally entitled to people actually finally gets to people we would make a huge difference in creating citizen wealth and family security. And there’s no reason not to do this. This is a highly technical age. Why we’re forcing everybody to fill out a million forms, come up with a million different pieces of paper when we could do almost all of it through computers, do it quickly, verify it, keep the records, you know, in PDFs or scanned documents or whatever. There’s a lot of people who know how to do this more than you and I, but this could be a huge breakthrough in eligibility.
Rathke asks, “Why not have computers in grocery stores and community centers — and they are in many libraries now — and in churches and synagogues so that people in working communities have easy access to the software to apply for these benefits.”
What Rathke doesn’t explain is that President Obama and the Democratic-controlled Congress made it much easier a few months ago for those like him who want to overload the system in order to bring about its demise.
That’s because the spectacularly successful Clinton era welfare reforms that helped millions of Americans break free from crippling dependency on the public fisc were summarily executed in February. Provisions buried deep in the stimulus package signed by President Obama, who used to work for ACORN, offer new financial incentives to states to increase their welfare caseloads.
ACORN, whose national board fired Rathke a year ago for gross misconduct, won’t have any difficulty causing the next welfare crisis without him, assuming it isn’t shut down by authorities for racketeering or election fraud.
Meanwhile, Rathke isn’t content merely to screw up America.
Like a modern-day Karl Marx in exile, he is doing his best to spread the wealth all around the globe, spreading social justice and shakedown techniques.
After the humiliation of being fired for an eight-year cover-up of his brother Dale’s nearly $1 million embezzlement of ACORN funds, Rathke remains deeply involved with at least three of ACORN’s more than 100 affiliated nonprofits. (Just this past weekend America learned in a New York Post article by Ginger Adams Otis what Dale blew his ill-gotten gains on.)
He recently changed the name of ACORN’s international consultancy, ACORN International, to Community Organizations International. Rathke also remains chief organizer, or CEO, of the New Orleans-based Local 100 of the Service Employees International Union (SEIU), another ACORN affiliate he founded. He does not appear to have stepped down as president and director of Affiliated Media Foundation Movement (AM/FM), an ACORN affiliate that produces news segments for eight alternative radio stations.
Although Rathke has long drawn inspiration from Saul Alinsky’s legendary political strategy book, Rules for Radicals, he only believes in rules if they benefit him.
To this day he continues to defy the resolution approved on a vote of 29 to 14 by ACORN’s national board on June 20, 2008. It declared that Rathke “be terminated from all employment with ACORN and its affiliated organizations or corporations” and that he “be removed from all boards & any leadership roles with ACORN or its affiliated organizations or corporations.”
Alinsky, who taught the importance of flexibility, would be proud.
(This article is an updated version of an article that ran in the American Spectator in July of this year.)
ACORN and SEIU: Anatomy of a Shakedown
Posted by Anita MonCrief in ACORN, Featured Story, Obama, Politics, Van Jones, Wade Rathke on September 27th, 2009
Across America community organizations operate in impoverished, disadvantaged, low-income or minority communities. No matter the phrase used to describe the special interest, a group exists to represent it. Often these organizations initially have good intentions and seek to give back and serve the community in which they operate. When government money, power and influence become part of the equation however, lofty principles tend to fall by the wayside. Other organizations are created to cause chaos and disrupt the system.
The Association for Community Organizations for Reform Now (ACORN) was perceived by many as a well-intended organization, but it appears that the association that Wade Rathke founded was increasingly driven to cause chaos and disrupt the system whenever it could.
BEFORE the Dale Rathke embezzlement finally became last year, John Fund, in “Grapes of Rathke: ACORN, a liberal activist group, comes under scrutiny. About time,” reported:
“Current and former Acorn employees say the problems in Kansas City and St. Louis are no accident. ‘There’s no quality control on purpose, no checks and balances,’ says Nate Toler, currently head organizer of an Acorn campaign against Wal-Mart in Merced, Calif. In 2004 he worked on an Acorn voter drive in Missouri, and says Acorn statements aren’t to be taken at face value: ‘The internal motto is “We don’t care if it’s a lie, just so long as it stirs up the conversation.”
As various charges and complaints have materialized over the years, it seems that ACORN uses the communities in which they are located as staging grounds for national power grabs. With multiple states and entities receiving federal funds, ACORN plays to win. Aiding ACORN are groups like DEMO’s, the Democracy Alliance, Soros Open Society Institute, and the Service Employees International Union (SEIU). The Washington Examiner has covered ACORN’s: “Muscle for the Money” program:
“ACORN’s so-called ‘muscle for money’ strategy extorts ‘donations’ from targeted government and corporate officials by offering them Mafia-like protection from protests by the group’s own paid thugs, many of them convicted felons. ACORN has also blocked bank mergers until the targeted financial institutions agreed to change their lending policies to ACORN’s satisfaction.”
While it is easy to see the benefit for ACORN to go after Sherwin Williams or Jackson Hewitt, it was their 2007-2008 ventures with SEIU against the Carlyle Group that deserve a closer inspection. In 2007 SEIU began a series of “grassroots” actions designed to pressure the Carlyle Group to the bargaining table.
“The Service Employees International Union (SEIU) staged a protest outside the Pennsylvania Avenue headquarters of The Carlyle Group as part of the union’s bid to organize Manor Care, the Toledo-based nursing home giant Carlyle is buying for $6.3 billion.”
It seems that, at the beginning of the campaign, SEIU wanted a slice of the $6.3 billion that was on the table from the sale of Manor Care. For SEIU and ACORN, organizing in poor communities takes a little bit of finesse and a lot of political theater. When SEIU could not muster up the required public outrage, they switched tactics. SEIU released a press statement, in late 2007, warning of the possible health risks posed by the Carlyle Group:
“To highlight the health risks that could go undetected if Carlyle refuses to disclose information about its sewer sludge business, SEIU held a demonstration today outside Carlyle’s Washington DC offices with demonstrators dressed in hazmat suits. This week SEIU began contacting environmental groups, and state and municipal governments that contract with Synagro to raise concerns about Carlyle’s lack of transparency and to encourage these groups to join the call for Carlyle to disclose potential risks of its sewer sludge business.
The focus on Carlyle’s sewer sludge business is part of a larger national effort by SEIU to hold Carlyle accountable for the impact of its actions on taxpayers, workers, and communities. More information is available at www.CarlyleExposed.org
Turning up the heat appears to be textbook “muscle for the money,” yet it wasn’t enough to produce the desired results, so SEIU raised the prospect of possible terrorism and threats to national security:
“Global buyout firm the Carlyle Group’s announcement that it seeks to acquire Booz Allen’s government consulting business should raise serious questions about the ramifications for national security and demands immediate government oversight to ensure adequate controls exist should the deal be completed…
“We shouldn’t allow the unchecked greed of buyout billionaires like David Rubenstein to put our communities at risk,” said Stephen Lerner, Director, and SEIU Private Equity Project. “With billions of taxpayer dollars at stake in these contracts, accountability and transparency is a primary concern since the Carlyle Group operates behind a veil of secrecy.”
Veil of secrecy? Interesting. On cue, enter ACORN and Barack Obama. After staged demonstrations across the country and several tactical changes, SEIU hires ACORN as a “consultant” to protest the Carlyle Group. ACORN readily accepts the money, but has one problem – how to turn the people out, to make them care about the issue. Using the same tactics that Stanley Kurtz detailed in his article about ACORN and the Community Reinvestment Act, ACORN spins the fight against the Carlyle Group as rich (whites) versus poor (blacks):
“White financiers are all flooding up to the Waldorf Astoria this morning for the opening of today’s Dow Jones Private Equity Analyst confab!…
ACORN and The Working Families Party and their coalition are calling for a protest at noon.
‘The Carlyle Group is the poster child for an industry that has made billions by fleecing taxpayers and loading up companies with unsustainable levels of debt,’ said Dan Cantor, Executive Director of the Working Families Party.
‘David Rubenstein made $260 million last year, yet he paid taxes at a lower rate than the doorman at this hotel. Not only that, companies like Carlyle don’t pay their fair share in corporate taxes.’ said Pat Boone, President of NY ACORN.
As the recent Van Jones exposes on Glenn Beck have illustrated, most roads lead back to radical organizations formed in the 1970’s and tie in with the current administration. While ACORN broke up business meetings in New York and DC, they developed a catchy slogan to sum up their “battle”
“Chanting, ‘It’s Not Fair, Pay Your Share’, protestors entered the ballroom while two protest leaders dropped a banner from the balcony above the ballroom that read ‘Why does David Rubenstein pay taxes at a lower rate than an NYPD officer?’
Over on Capitol Hill, then Senator Obama, acting in a manner that would quickly become one of the trademarks of his administration, employed ACORN tactics to project his power into the situation:
“Senate Majority Leader Harry Reid (D-Nev.), on October 10, dispelled the idea that Congress would get around to addressing the hotly debated tax bill this fall when he issued a statement through a spokesman: “Given the difficulty in getting any legislation through the Senate and the little time left this year for moving other issues important to the American public, it is unclear whether there is sufficient time to address the appropriate tax treatment of private equity firms.”
…U.S. Senator Barack Obama, for instance, issued this statement on news of Reid’s stance: ‘If there was ever a doubt that Washington lobbyists don’t actually represent real Americans, it’s the fact that they stopped leaders of both parties from requiring elite investment firms to pay their fair share of taxes, even as middle-class families struggle to pay theirs.’
Meanwhile, the Service Employees International Union put in its two cents, staging another protest against the Carlyle Group on Oct. 10, this time using a street theater performance complete with wheel barrows, a fat-cat corporate tycoon character and money sacks.”
Publicly, the Carlyle Group seemingly did not bow to pressure from the union or ACORN, but some may consider their “across the aisle” support of Obama as a major concession. As a “financial kingmaker,” the group seems to have added a much needed legitimacy to the young and inexperienced candidate. A conclusion could be drawn that SEIU and others were willing to sacrifice leverage at the bargaining table for leverage in the White House:
In seizing control of Congress last year and hoping to win the White House next year, Democrats have presented themselves as the champions of change, the party that will shake up politics and return tax balance so that America has the resources it needs to deal with its problems.
Good stuff, that. Solidly in line with the party’s tradition. Ditto proposals pending in the Senate Finance and House Ways and Means committees to boost taxes on the hedge fund and private-equity business, arguably one of the highest-paid, least-taxed industries around.
So . . . what should we make of the thick wads of campaign cash from that same industry going to Chicago’s top-ranking congressional Democrats: presidential hopeful Sen. Barack Obama and Rep. Rahm Emanuel, the No. 4 House Democrat?
…Another D.C. lobbying group, Public Citizen, has identified more than a dozen industry chieftains who have bundled together at least $50,000 each in contributions to Mr. Obama’s campaign. Included are two principals in Carlyle Group, a Washington private-equity firm.
While the Carlyle Group appears on the surface to be a victim of SEIU and ACORN’s shenanigans, their ties to the current administration have been carefully crafted. The group not only donated heavily to the Obama campaign, but two of Obama’s tech and telecom policy team were employees of the Carlyle Group, including William Kennard.
In addition to these connections, Carlyle president David Rubenstein – who sits on the board of the University of Chicago – did acquire Booz Allen Hamilton and Obama apparently decided to keep the special interests in the “family“:
“Mike McConnell will return to work for Booz Allen Hamilton, where he will direct the firm’s strategy in obtaining and implementing government contract…You see, at the very same time that he will be working at Booz Allen Hamilton on obtaining government contract related to ongoing Total Information Awareness operations in our government, Mike McConnell will retain a position in the government at the request of President Obama.”
A cursory look at these connections leads one to ponder if what we have here is a shakedown between friends. Did SEIU want in on a new deal that involves their “turf” and instead see an opportunity to acquire more power by enlisting the help of ACORN? Did ACORN deliver the ground troops and have Barack Obama apply the pressure on Capitol Hill? Either way, and unfortunately for Barack Obama, trouble usually follows his shady friends and his dealing with the Carlyle Group have caused some ACORN sized headaches. The Carlyle Group’s involvement in a pension scandal was the most recent:
“Among the money managers named in the indictment are the politically connected private equity players Carlyle Group and Quadrangle Group, whose co-founder Steven Rattner, leads the Obama administration’s auto-industry-bailout efforts.”
If the Sopranos and Obama’s treatment of the ACORN scandals are any indication, “muscle for the money” seems to come with a certain amount of “protection” whether it be silence from the administration, theJustice Department, or the main stream media, or just a slap on the wrist for one of their cronies. ACORN, SEIU and Obama may have moved on to the next target. but continue to use race and class as tactics and people as pawns in their power grabs. Now, however, more and more Americans are realizing it.
ACORN’S Enron-Style Accounting: Playing Musical Chairs with Big Money
Posted by Matthew Vadum in ACORN, Obama, Wade Rathke on September 25th, 2009
The activities of the radical, corrupt to the core, left-wing Association of Community Organizations for Reform Now, which has tangled itself up in an infinitely complex web of deceit, thuggery, and questionable financial dealings, are long overdue for a RICO probe.
Recent well-publicized events that I need not recount here show ACORN’s criminal propensities. In a moment I’ll explain how ACORN’s financial affairs ought to raise a red flag for investigators at the U.S. Department of Justice, but first some background.
The Racketeer Influenced and Corrupt Organizations (RICO) Act, which was created to prosecute organized crime, allows the federal government to go after individuals who commit any two RICO-related crimes over a decade. The law allows courts to convict persons if it can be shown that they committed those crimes as part of an illegal enterprise and can order disgorgement of their ill-gotten gains from the enterprise.
RICO is the right tool for the job.
Perhaps it’s the only tool for the job because the ACORN network is deliberately structured to deter scrutiny. Its nebulous legal status and opaque corporate structure allow it to keep its activities largely hidden from public view.
The social justice entrepreneurs of ACORN sit on the boards of ACORN and of ACORN affiliates. Many, many, many of them.
These “interlocking directorates” create an appearance of conflict of interest. Such arrangements may be widespread and lawful, but they always raise legitimate questions about the quality and independence of board decision-making. The ACORN network claims to be a “family” of organizations embodying the ethos of community organizing, which stresses local action and decentralized authority.
In fact, ACORN is tightly controlled from the top. One blogger discovered last year that 294 ACORN affiliates operate out of ACORN’s building on Elysian Fields Avenue in New Orleans.
ACORN’s many affiliates have extraordinarily sophisticated financial arrangements that are largely hidden from public view. ACORN uses its system of interlocking boards of directors to oversee its affiliates and make financial mischief.
As Jim Terry of the Consumers Rights League has noted, “ACORN has a long and sordid history of employing convoluted Enron-style accounting to illegally use taxpayer funds for their own political gain.”
Look at a person named Donna Pharr. Pharr sits on the boards of at least 22 ACORN affiliates. She’s also deputy treasurer of the Minnesota ACORN Political Action Committee and is listed by Michigan as the contact person for Communities Voting Together, a “527″ pressure group.
And even now after it was revealed last year that ACORN founder Wade Rathke covered up his brother’s nearly $1 million embezzlement, Rathke remains chief organizer of ACORN affiliate SEIU Local 100, president of ACORN International Inc. (since renamed Community Organizations International), and president and a director of Affiliated Media/Foundation Movement (AM/FM) Inc., which is an ACORN affiliate that produces news segments for eight alternative radio stations.
There are plenty of other examples of directors and officers playing musical chairs throughout the ACORN empire. (See Foundation Watch, November 2008.)
Commenting on ACORN’s complex administrative arrangements, Charlotte Allen observes in the Weekly Standard, “The potential for abuse in an interlocking arrangement governed top-down from New Orleans is as obvious as a thicket of ‘Change’ signs at an Obama rally.”
ACORN takes recycling seriously, at least when it comes to money.
My research determined that ACORN affiliate Project Vote (its proper legal name is Voting for America Inc.) has funneled $16,487,690 to ACORN and other ACORN affiliates since 2000.
The $16 million-plus figure consists of $12,712,121 in direct payments to ACORN, $1,912,647 in payments to Citizens Services Inc. (CSI), and $1,862,922 in payments to Citizens Consulting Inc. (CCI).
CSI is the ACORN affiliate that the Obama campaign paid $832,598 to during last year’s primary season. The Obama campaign falsely declared in campaign finance filings that the expenditures were for “staging, sound, lighting” but corrected the record after my friend the late blogger Nancy Armstrong uncovered the truth. (Armstrong of Garden Plain, Kansas, an ardent researcher of all things ACORN, died at age 49 of a massive heart attack in late July. She ran the MsPlacedDemocrat blog so named because she became disillusioned with the Democratic Party and left it last year to become an Independent.)
CCI is the shadowy ACORN affiliate that has been called the ACORN network’s financial nerve center. CCI controls the flow of money throughout the ACORN network.
CCI is where ACORN founder Wade Rathke’s brother Dale worked. Dale Rathke embezzled almost $1 million from ACORN, and apart from having to pay the money back, got away scot-free. Big brother Wade orchestrated an eight-year coverup of the embezzlement with senior ACORN management. When the coverup fell apart last year, Wade Rathke was expelled from ACORN and until very recently law enforcement hadn’t lifted a finger to investigate.
As former ACORN official Charles Turner has said, CCI “is where the shell game begins.” CCI employees are no doubt helping to give a major shot in the arm to the document-shredding industry right now.
According to the most recent publicly available IRS Form 990 (tax return) for Project Vote, in 2007 the voter registration and get-out-the-vote outfit alone paid $1,907,592 to ACORN, $705,705 to Citizens Services Inc., and $395,260 to Citizens Consulting Inc.
Since 2000 ACORN affiliate the American Institute for Social Justice Inc. (training and publishing) paid ACORN $1,926,831, CCI $362,464, and ACORN Associates Inc. $258,593.
On its 2002 tax form, the Institute disclosed a $1,684,184 “community reinvestment” grant to ACORN, along with a $9,637 loan to SEIU Local 100. (On the same document, the Institute also reported receiving a $50,000 interest-free loan from the Tides Foundation for “purchase of equipment,” and a $4,000 interest-free loan from the George Soros-funded Open Society Institute’s Progressive America Fund Inc.) In an LM-2 (labor union disclosure) form in 2007, SEIU Local 880 revealed that it gave $60,118 to ACORN for “membership services.”
On its 2006 tax form, the American Institute for Social Justice Inc. disclosed that it provided a $4,952,288 “community reinvestment” grant to ACORN, the non-tax-exempt Arkansas nonprofit corporation that controls the ACORN network.
Why is all this money flying around the ACORN network? What could the group possibly being doing with it all? What other network of tax-exempt nonprofit entities does business this way?
ACORN may have reasonable explanations for some or all of these suspicious transactions but it has yet to offer them. In light of recent developments, these are questions it should be forced to answer.
ACORN lawyer Elizabeth Kingsley raised the alarm about interlocking directorates and the perilously close ties between ACORN and Project Vote. As the New York Times reported last fall, Kingsley found:
[T]he tight relationship between Project Vote and Acorn made it impossible to document that Project Vote’s money had been used in a strictly nonpartisan manner. Until the embezzlement scandal broke last summer, Project Vote’s board was made up entirely of Acorn staff members and Acorn members.
Ms. Kingsley’s report raised concerns not only about a lack of documentation to demonstrate that no charitable money was used for political activities but also about which organization controlled strategic decisions.
She wrote that the same people appeared to be deciding which regions to focus on for increased voter engagement for Acorn and Project Vote. Zach Pollett, for instance, was Project Vote’s executive director and Acorn’s political director, until July, when he relinquished the former title. Mr. Pollett continues to work as a consultant for Project Vote through another Acorn affiliate.
“As a result, we may not be able to prove that 501(c)3 resources are not being directed to specific regions based on impermissible partisan considerations,” Ms. Kingsley said, referring to the section of the tax code concerning rules for charities.
She also found problems with governance of Acorn affiliates. “Board meetings are not held, or if they are, minutes are not kept, or if minutes are kept, they never make it into the files,” she wrote.
Project Vote, for example, had only one independent director since it received a federal tax exemption in 1994, and he was on the board for less than two years, its tax forms show. Since then, the board has consisted of Acorn staff members and two Acorn members who pay monthly dues.
The newspaper also interviewed George Hampton and Cleo Mata, two former Project Vote board members. Both denied serving on the board and Hampton, who acknowledged he had been an ACORN member, said he had never heard of Project Vote.
Ironically, Rathke condemned interlocking directorates in the corporate world. In 1980, he endorsed the proposed “Corporate Democracy Act” which would have fined directors up to $10,000 per day for “serving more than two corporations” simultaneously. (Heritage Foundation backgrounder, March 11, 1980)
Go figure.
(This article is an updated version of an article originally published by the American Spectator.)