Massive fraud at ACORN

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David in Atlanta
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Jul 10 2008 20:46
Massive fraud at ACORN
Quote:
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.

http://www.nytimes.com/2008/07/09/us/09embezzle.html?_r=1&oref=slogin

petey
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Jul 10 2008 21:00

aw jayzuz.
i never really knew what to make of acorn, though this certainly has uncomfortable overtones.

booeyschewy
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Jul 10 2008 21:29

they also lost ULPs for union busting iww organizing some years back. its a wack wack outfit

pgh2a
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Jul 11 2008 00:16

yeah, talk about financial irregularities, I know plenty of folks who never got paid on time. Perhaps money for health care that employees were promised but found out they didn't get (usually after a trip to the doctor) went into these shysters' pockets.

David in Atlanta
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Jul 11 2008 00:45

Hurm, Wade Rathke is also on the board of the Tide Foundation. From their site: $165 million in assets and $87 million in grants paid for fiscal year 2005. He lies to his board to cover his brothers ass at ACORN and he's on the board of a foundation giving out the big bucks?

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888
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Jul 11 2008 01:31

Corrupt union busting union bureaucrat scum

pgh2a
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Jul 11 2008 01:47

I do believe the Tides Foundation had this deal for doing voter registration with ACORN. ACORN gets $3 per card, or something like that. I worked for ACORN a while ago. I know a lot of folks from Pittsburgh who have worked for ACORN in the past, several of whom have come over to the IWW.

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antichef
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Jul 11 2008 16:34

I tell people that ACORN is a profitable business masquerading as a reformist community organization. I think that they have drawn tactics from MLM parties as well. They prey on poor people and on idealistic (naive) college students. They are not to be trusted at all. Good people get suckered into being exploited by ACORN. I remember here they had a campaign to raise the minimum wage by a referendum. They had a $500,000 grant to work with (half a million dollars!). They hired people to gather signatures, paying them per signature collected (not paying minimum wage!). They did a crap job of involving any low income workers. The referendum narrowly failed.

I once worked with a condescending liberal waiter who, I learned, had scabbed on the ACORN strike in Seattle.
As a cook, I refused to prepare his tickets and let everyone know he was a scab. He got pissed and quit.

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888
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Jul 11 2008 20:22
antichef wrote:
I once worked with a condescending liberal waiter who, I learned, had scabbed on the ACORN strike in Seattle.
As a cook, I refused to prepare his tickets and let everyone know he was a scab. He got pissed and quit.

Haha, that's funny, good for you...

Mike Harman
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Jul 11 2008 20:54

What's ACORN?

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888
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Jul 11 2008 20:58

Association of Community Organizations for Reform Now

http://en.wikipedia.org/wiki/Association_of_Community_Organizations_for_Reform_Now

Quote:
ACORN filed a lawsuit in California seeking to exempt itself from the state's minimum wage of $4.25 per hour in 1995. ACORN alleged in its complaint that "its workers, if paid the minimum wage, will be less empathetic with ACORN's low and moderate income constituency and will therefore be less effective advocates."

Wow, what a perverted form of reasoning!

pgh2a
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Jul 11 2008 21:42

That's a good story. Yes, I've worked with Seattle ACORN scabs before. PM me for a good story.

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fnbrill
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Jul 12 2008 05:27

Take a look at Wade Rathke's personal blog at this ACORN fundraising device - have ACORN workers give tourists bike-ricksaw rides...

http://chieforganizer.org/index.php?id=57&no_cache=1&tx_eeblog[pointer]=0&tx_eeblog[showUid]=25997

David in Atlanta
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Jul 12 2008 06:08

Somehow I'd missed this debacle, our boy Wade compared an independent African American organizing project to Chalabi!
SEIU VP And ACORN Leader Charged With Racism

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Black Leprechan
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Jul 12 2008 11:18

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 form black, Latino and other communities of color that really could have excelled at ACORN had they been paid a living wage.

When I read this letter circulated about CLU shortly after the unrest 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.

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 NOLA 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.

Peace Out

A Fellow Organizer

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Black Leprechan
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Jul 12 2008 11:23

Hey Wade, I have a question. If any other employee besides your brother had embezzled 1,000,000 would yo have kept them on for 8 more years and covered it up then?

You know good and well you wouldn't. The FBI would have been called in as fast as you could get them there.

For anyone wondering why the other managers who helped Rathke aren't breaking ranks?
1) The are complicit so they are like mobsters saying if I go down everybody does.
2) Wade has gotten them at various times to break the law themselves and he is prepared to blackmail them.
3) As one person said to me in confidence? I have my pension to worry about.

Antieverything
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Joined: 27-02-07
Jul 13 2008 07:08

Fucked up, for sure, but not really suprising.

I've read about the union busting and the appalling minimum wage incident...but I've also heard some pretty bad first-hand accounts from people like Black Lep. who were young, highly motivated and idealistic and ended up being chewed up and spit out by the organization only to find they were ostracized when they decided to move on!

The mistake would be to think that ACORN is just one of the bad nonprofits. While they are, from what I can tell, an extreme example...this sort of thing is the norm in this sort of nonprofit organization. As a fellow poster once pointed out: most nonprofits are for-profit for the people at the top!

Quote:
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 form black, Latino and other communities of color that really could have excelled at ACORN had they been paid a living wage.

Exactly the impression I get for lots of groups like this (up to and including mainstream unions, San Antonio SEIU in particular)...the career leadership exploiting the self-sacrificing idealism of leftist students who sincerely want to make a difference, all the while sabotaging their efforts in order to keep them from rising through the ranks (which presumably threatens the niche that the careerists have managed to dig out). Of course, what do you expect from the sort of person who could take all of the abuse and manipulation it requires to start earning a salary and benefits at an outfit like this! They've been through hell to get where they are and no threat to that can be tolerated (whether from a competent group of up-and-coming organizers or an emergence of attempts at self-organization and autonomy by the group being organized).

This makes me really want to get in touch with the young woman who first told me about her experience with ACORN. She seemed like she was in the process of becoming fed up with the abusive leadership but hated the idea of leaving the people she was working to organize.

Antieverything
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Jul 13 2008 08:56

We should really merge this thread with this one:

http://libcom.org/forums/news/acorns-wade-rathke-steps-down-after-revelation-brothers-theft-rathke-instigated-cove

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Black Leprechan
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Jul 13 2008 09:13

ok
Notice anything interesting about this?

SEIU 100 in New Orleans
1024 Elysian Fields Ave.
New Orleans, LA 70117
504-872-0480 ext 118
504-617-6045 FAX

Now here is the address for Citizens Consulting Inc:
1024 Elysian Fields Ave
New Orleans, LA , 70117-8402

Now Here is the address of ACORN National in New Orelans (Wade’s office)

ACORN National Louisiana
1024 Elysian Fields Ave.
New Orleans, LA 70117
chieforg@acorn.org
Phone: 504-943-0044

Iam 99% sure ACORN housing is at the same address in NOLA

So

OK there are corporate executives that don’t have a deal this sweet.
He got his union, his Non profit, his mortgage company, and his own private nonprofit run by his brother to slice some pie off in administrative and lobbying fees on every transaction. No foundations have a problem with this? My god. How many paychecks can one so-called organizer derive form one building. Seems like the only thing Wade has organized well is his own bank account.

How can Wade throw up his hands 8 years ago and say “oh my god my little brother stole a million dollars rigth here in my own office, how could it be? Well for the best interest of the movement let’s cover it up ok everybody? And I will get everyone to pitch in and pay back our I mean his 1 million dollar debt.” If you were ever around the New Orleans office for any length of time you would understand.

Oh yeah anyone find it interesting that the ACORN office where NOLA members are welcome to hang and see what is going on is not at this address. Perfect crime! This is better than catch me if yo can

pgh2a
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Jul 13 2008 14:07

I think if you go look at the non-profit filing forms, you will see there are tons of spin-offs, which is interesting in and of itself, because guess who got paid to do the accounting on each organization...

David in Atlanta
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Jul 15 2008 19:29

Already posted in other thread at
http://libcom.org/forums/news/acorns-wade-rathke-steps-down-after-revelation-brothers-theft-rathke-instigated-cove

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jef costello
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Oct 16 2008 22:48
Quote:
When I read this letter circulated about CLU shortly after the unrest 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.

But still relying on the white chauvinists to pay them?

pgh2a
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Oct 19 2008 00:53

Anyone else been following the latest with ACORN and voting registration? Its becoming a big issue in the US. I think the IWW was one of the first organizations to break the story about some of the conduct there. Of course, Obama issued a less than sensitive remark about workers not doing their jobs, but the reality is that ACORN hires people just out of halfway houses, prisons, etc., pays them shit wages, and they need to keep their jobs. The quotas for registration cards per day are probably obscene, and so people fudge the documents. Not what the boss tells them to do, but understandable behavior.