ACORN Embezzlement Totaled $5 Million, Internal Audit Asserts

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ACORN logoWhere there's smoke, there's fire. And in the case of the radical nonprofit network, the Association of Community Organizations for Reform Now, or ACORN, the fire is more than five times as bad as originally reported. According to results from an internal audit released yesterday, top ACORN members embezzled around $5 million during its years under the helm of founder Wade Rathke. That's well above the roughly $950,000 that Rathke's brother, former ACORN chief financial officer Dale, reportedly stole during 1999-2000 - and that Wade Rathke ordered covered up lest the incident create bad publicity. Fittingly, current ACORN chief organizer Bertha Lewis claims the latest allegations to be "completely false." 

As reported in these pages several times since the original story broke, Wade Rathke, principal co-founder of the New Orleans-based ACORN almost 40 years ago, was forced out of his CEO-chief organizer role last June following revelations that he and several other board members had covered for Dale Rathke's pilferage a decade ago. That and several other scandals, particularly voter registration fraud in more than a dozen states, have thrown the spotlight's glare on ACORN, with some 400,000 dues-paying households belonging to about 1,200 chapters across the nation. Now the group has another blow to its credibility. Or as its many critics might ask: What credibility?

The revised $5 million figure comes from an internal audit reported at an October 17, 2008 meeting of ACORN's board of directors. Various news reports on Monday cited the figure as being included in a subpoena issued in August by Louisiana Attorney General Buddy Caldwell, whose office had been investigating Dale Rathke since June. The Rathke brothers had paid $210,000 in seven installments of $30,000; an unnamed donor, later identified as Tides Foundation founder-CEO Drummond Pike, then stepped in and paid ACORN the roughly $740,000 balance due.

The new subpoena, granted Friday by Louisiana's 19th Judicial District, requested documents from an ACORN affiliate, Citizens Consulting Inc. (CCI), and various accounting and legal consultants in New Orleans. CCI is the political campaign services outfit that Dale Rathke headed during the period of his alleged thefts. The subpoena asserted that key ACORN members for nearly a year had known the true figure to be $5 million. It also stated that Bertha Lewis is something less than innocent. Here are the most incriminating words: "Current high-ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on October 17, 2008, by Bertha Lewis and (ACORN research director) Liz Wolf that an internal review had determined that the amount embezzled was $5 million, and it is still unclear if some of the monies embezzled are from state, federal or private funds."

Seemingly oblivious to facts, ACORN top brass insist the investigation and subpoenas are a frame-up. CEO Bertha Lewis says the latest allegation is "completely false." And ACORN board member Vanessa Gueringer, chairwoman of the Lower 9th Ward (New Orleans) Chapter, claimed, "I believe it is another lie, another witch hunt." Yet their denials flatly contradict what had been acknowledged at that executive board meeting of a year ago. It's getting harder with each month for the group's defenders to claim the problem lies with a "few bad apples" or that it's "all in the past." At ACORN, past is present. There's no telling what future probes will turn up.

Related:  "ACORN Admits to Embezzlement Scandal: Founder Steps Down."