The Following is a New York Times Article that folks should be aware of. Following the article is the heart felt letter from an ex-staff member who is not satidfied with Mr. Rathke's excuses or his decades of oppression of staff of color:
Funds Misappropriated at 2 Nonprofit Groups
By STEPHANIE STROM
Published: July 9, 2008
Two prominent national nonprofit groups are reeling from public disclosures that large sums of money were misappropriated in unrelated incidents by an employee and a former employee.
The groups, Acorn, one of the country’s largest community organizing groups, and the Points of Light Institute, which works to encourage civic activism and volunteering, have dealt with the problems in very different ways.
Acorn chose to treat the embezzlement of nearly $1 million eight years ago as an internal matter and did not even notify its board. After Points of Light noticed financial irregularities in early June, it took less than a month for management to alert federal prosecutors, although group officials say they have no clear idea yet what the financial impact may be.
A whistle-blower forced Acorn to disclose the embezzlement, which involved the brother of the organization’s founder, Wade Rathke.
The brother, Dale Rathke, embezzled nearly $1 million from Acorn and affiliated charitable organizations in 1999 and 2000, Acorn officials said, but a small group of executives decided to keep the information from almost all of the group’s board members and not to alert law enforcement.
Dale Rathke remained on Acorn’s payroll until a month ago, when disclosure of his theft by foundations and other donors forced the organization to dismiss him.
“We thought it best at the time to protect the organization, as well as to get the funds back into the organization, to deal with it in-house,” said Maude Hurd, president of Acorn. “It was a judgment call at the time, and looking back, people can agree or disagree with it, but we did what we thought was right.”
The amount Dale Rathke embezzled, $948,607.50, was carried as a loan on the books of Citizens Consulting Inc., which provides bookkeeping, accounting and other financial management services to Acorn and many of its affiliated entities.
Wade Rathke said the organization had signed a restitution agreement with his brother in which his family agreed to repay the amount embezzled in exchange for confidentiality.
Wade Rathke stepped down as Acorn’s chief organizer on June 2, the same day his brother left, but he remains chief organizer for Acorn International L.L.C.
He said the decision to keep the matter secret was not made to protect his brother but because word of the embezzlement would have put a “weapon” into the hands of enemies of Acorn, a liberal group that is a frequent target of conservatives who object to its often strident advocacy on behalf of low- and moderate-income families and workers.
Wade Rathke said he learned of the problem when an employee of Citizens Consulting alerted him about suspicious credit card transactions. An internal investigation uncovered inappropriate charges on the cards that led back to his brother.
“Clearly, this was an uncomfortable, conflicting and humiliating situation as far as my family and I were concerned,” he said, “and so the real decisions on how to handle it had to be made by others.”
The executive director of New York Acorn, Bertha Lewis, who has been named director of an interim management committee set up to run the national group’s day-to-day operations, said Dale Rathke was paid about $38,000 a year but that none of that money was used to pay back Acorn.
Instead, she said, the Rathke family has paid Acorn $30,000 a year in restitution since 2001, or a total of $210,000.
A donor has offered to give Acorn the rest of what the Rathkes owe, and an agreement to that effect should be finalized in coming days, Ms. Lewis said.
“Now that this is under our watch, we are putting financial auditors in place, legal counsel in place, a strong management team in place to make sure this organization moves forward for another 38 years,” she said. “I will not allow and the board will not allow something like this to happen again.”
But the fact that most of the handful of people who did not disclose the fraud when they learned of it eight years ago still work for Acorn or its affiliates concerns many of the group’s financial supporters.
“We’ve told them that when the process is ended, we’ll have a look at it,” said Dave Beckwith, executive director of the Needmor Fund, which has given money to some of Acorn’s charity affiliates for at least 10 years and was contacted by the whistle-blower in May.
Representatives of some 30 foundations and large donors have been discussing the matter on conference calls and may establish a committee to monitor Acorn’s overhaul of its management and accountability systems.
A former Staff member responds:
As a person of color. A former ACORN staff member, and as a revolutionary, and in light recent revelations of Wade Rathke's coverup of the theft of 1,000,000USD I just gotta say amen. Wade doesn't allow dissent within ACORN.
Here is what I can tell you, you gotta read Gery DelGado's ACORN: Growing the movement. DelGado, a founding organizer pushed out by Rathke detailed almost 30 years ago that ACORN had an all white management staff. Until Wade was pushed out of Chief Organizer USA by the board this month? Now Bertha Lewis is heading up the management team to clean up the mess?
Wade pushes her under the bus and into the drivers seat as it is teetering on the edge of a cliff? I have not published my real name and I hope you can appreciate why. I am just a lowly organizer who can be easily smashed by Wade's long arms in the Democratic party.
The kicker for me is that in light of Wade's racism towards CLU, the embezzlement of 1,000,00 and in my opinion more importantly the horrible treatment of ACORN staff who were from the working class? He is getting promoted to Chief Organizer of ACORN International? Chief Organizer of the World? Are people in LA going to stomach that?
A couple of points. The management staff that helped Wade cover up the theft are still in place and he is Chief Organizer International. Anyone who knows non-profit work knows you can shred the books (most of the them) every 5 years. That would mean Wade and his brother Dale (who was in charge of the cash box) could have done this up top 6 times. We in ACORN know that the 1,000,000 is a drop in the bucket. Meanwhile mangement staff all over the country are switching jobs right now. All except the star chamber.
I remember once at a staff of color caucus there were maybe 150 of us in a room. Bertha Lewis asked all staff who had been there over 5 years to stand. Only two people were standing. Then she asked everyone there over two years to stand and literally like 10 stood up. They then asked everyone over a year to stand and maybe 20 stood. The other 115 stood. I remember the resistance the management staff had to us even having a staff of color caucus and remember hovering outside the door nonchalantly. We all resolved to call Wade and others out on several issues. Wade never even acknowledged our resolve.
There are good people at ACORN. Unfortunately they are overshadowed by things like office riots when people who haven't been paid in over a month from poor communities explode. They are overshadowed by staff directives that do not allow for true community organizing. The way it is set up working class staff can't hang with the 60 to 100 hour weeks, the low mileage stipend, the ridiculous fund raising goals set etc..
If you have a kid? And you weren't born from money you can forget about working for ACORN. The Democratic party and Unions are helping to feed this beast. The outsourcing to ACORN for low wage campaign workers at 7-8 bucks an hour to do VR and GOTV with no minimum standards that workers get paid the Living Wage ACORN has out fighting for? This just feeds the beast. PIRG is doing it, Move on does it and so do others. The only poeple who survive between campaigns are North East liberals from often times Ivy League or private liberal colleges that are using ACORN as a resume stuffer in their climb up the ladder to be an Exec Dir or Dem party operative. What about all those people from black, Latino and other communities of color that really could have excelled at ACORN had they been paid a living wage.
When I read the letter circulated about Community Labor Union by Wade Ratke shortly after the unrest that was a result of CLU organized actions in New Orleans by people of color. When I saw that Wade said "these people couldn't organize a two car funeral"? HE compared them to the CIA mole Chalabi who falsely claimed to represent the Iraqi people (are we a little over the top Wade?). I couldn't believe the white chauvinism that dripped from this hypocrite. DelGado has it right. A change has to come about in community organizing. Where people form directly affected communities control the work. It has to happen. This was the Ratke I knew, brow beating, condescending, demeaning, and yes racist. As if he deserved to talk to organizers of color (who had comparable experience) in the way that he did simply because he helped some black folks. Or becuase he had read some Alinsky. There was no excuse for the way he treated his staf.
Working for ACORN and watching some of the white folks in the field made me feel like we were putting poor communities in a skinner box to see how they would react if we gave this toy or that stimulus etc.. Or worse like some zoologist trying to get close to a lion or monkey in the jungle and acting proud if they were able to sit and eat with the animals. I am serious that is how it felt.
I hope the people of New Orleans LA take this opportunity to force ACORN to reverse the methods, tactics, and employment policies of ACORN. Save that other 115 organizers out there from souring on organizing for ever.
Also, SEIU you need to tell ACORN they have to pay a living wage or they can't do SEIU work. Yes SEIU outsourced work to us often, if the Dems, SEIU, or any other progressive group is going to outsource any of their work to anyone. This business of not getting a contract that ensures the workers will be treated fairly has to stop. I have video I have never released of employees rioting in offices who were not paid for over a month. How embarrassing for them, for me, for the movement.
I don't know if you will print this but judging from your site I thought it might be the right place. I am living in the aftermath of ACORN wrecking my life and many of my friends. Burned out, turned out, and broke. That isn't the way progressives are supposed to be.
When I found out about the million? I wasn't even one bit surprised. I have personally seen that much money thrown out the money on nothing in a week at ACORN. By the way, if you leave ACORN the standard line is "F---k them, they left", you have to secretly leave. It is like a cult. If you do good you can't get a reference, your supervisor will hint that you are a problem worker. I know it. It is hard to re-enter the field of organizing because you are burned out and you are white listed by ACORN.
Please post this response. Maybe edit it if you feel any of it is over the top. Our story must be told by progressives or the right wing will turn it to stone and nothing will ever change.
In light of the life ACORN organizers lead to think of Rathke and his brother living rich and happy while ACORN Live lives like this.
ACORN Organizers MUST:
Go door to door ALONE in the dark in high crime neighborhoods.
Work 10 hours a day and 11-4 on Saturday with no overtime.
Work 60 hours (sometimes more) a week for 25,000 a year. (That's 8.68 an hour which is not a living wage anywhere in the Unitied States)
Go door to door no matter the weather conditions (that includes lightning).
Get two members a day in low income neighborhoods who have bank accounts and commit to give $10.00 a month regardless of income.
Collect cash and carry it with them until the end of their workday.
Get arrested when called upon to do so.
BAIL themselves OUT!
Shake down local businesses for money.
Not carry personal protection.
Even when sick go door to door alone no matter the neighborhood.
Work while Sick.
Work without overtime.
Not organize a union.
Manipulate members when necessary.
Not complain about sexual harrassment.
Allow themselves to be the subjects of homophobia, sexual oppression, and even racism by superiors.
Lie to funders.
Lie to members.
Work with other organizers who are abusive and sexist.
Abandon chapters when the members are too poor to raise large amounts of money.
Do outsourced work for Unions at wages that are below union wages and living wages.
Wait for their paychecks for months after they resign, quit, or are fired.
Tolerate never getting reimbursed for personal expenses (mileage,cell phone,copies)
Tolerate money for community organizing being placed into accounts set aside for political action.
Allow their staff to be hired guns for whatever effort their supervisor determines important.
Thanks for the memories Wade.
A Fellow Organizer