Mighty Corruption From Little ACORN Grows

Might oaks, in the old proverb, may from little acorns grow, but in the case of ACORN (Association of Community Organizers for Reform Now) what sprouts — planted, fertilized, and nourished with abundant federal tax dollars — is fraud, corruption, and voter intimidation.

As Steven Malanga has just noted in City Journal,

Community organizing’s roots stretch back to the 1930s and Chicago organizer Saul Alinsky, founder of the Industrial Areas Foundation and author of Rules for Radicals. But it wasn’t until President Lyndon Johnson’s ambitious plan to end poverty through massive federal spending that the Alinsky model—grassroots organizing, neighborhood by neighborhood—really took off. Starting in the mid-1960s, the federal government directed billions of dollars to neighborhood groups, convinced that they knew better than Washington what their communities needed. The federal funds, eventually supplemented by state and local tax dollars, helped create a universe of government-funded community groups running everything from job-training programs to voter-registration drives—far beyond anything Alinsky could have imagined. Some 3,000 local social-services groups were soon receiving government funding in New York City alone. Many were new, but the money also helped turn traditional charities that had operated on private donations into government contractors.

ACORN, a nationwide network of left wing community action organizations, is probably the largest and most notorious of these government-funded “change” agents. If you have several hours to spend, browse through the hundreds of articles that appear in response to a Google search on varieties of “Acorn and [fraud or corruption].” (I just did that and got 113,000 hits, many of which are relevant.)

In a recent post that discussed what one ACORN apologist called its “voter education” activities, i.e., intimidating voters and disrupting signature gathering in Missouri, I noted that

ACORN activists are to “voter education” what scabs are to union organizing. See, for starters, here, here, here, here, here, here, here, here, here, here, here….

Those links are just the tip of the iceberg of ACORN’s dismal record of voting fraud and corruption. And, of course, no one should think ACORN’s misdeeds are limited to voting. One measure of the breadth and depth of its corruption is that even the New York Times has noticed, as in this article from a few weeks ago discussing a massive misappropriation of funds and the subsequent failure to remove or even discipline those who covered it up. “Acorn,” the article began, “chose to treat the embezzlement of nearly $1 million eight years ago as an internal matter and did not even notify its board.”

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.”

An observer knowledgeable about ACORN might conclude that its leaders doing what they think is right is the problem, not the solution.

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.

Well, yes: news of a massive financial crime and subsequent cover-up does tend to give one’s critics some ammunition.

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.

Let’s see: about $750,000 left to be paid at $30,000 a year. That means that even without some rich radical diverting money from the Obama campaign to pay off this “debt,” it would take only another 25 years or so to wipe the slate clean (at least if there’s no interest). Now for the good news reported by the NYT:

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.

I suppose we should be impressed that their ethical standards are high enough to cause some “concerns” over covering up a massive theft, but for some reason the fact that some supporters feel “concerns” doesn’t go very far toward changing my mind about the nature of the organization, or its “supporters.”

As you will have guessed, I’m interested in ACORN primarily because it has teamed up with BAMN to supply hordes of activists (your tax dollars at work) in a joint attempt to prevent civil rights initiatives from appearing on the ballots of several states. (More to come on this later). But I want to bring ACORN and its “supporters” to your attention now (rather than later, when I’ll be returning to its voter intimidation tactics) because Congress is about to pass legislation, which the president has indicated he will sign, that will give this organization and its teams of bullies a massive new infusion of federal cash.

Two days ago the Consumer Rights League issued a statement warning of what is about to happen. An excerpt:

this legislation will pump tens, if not hundreds, of millions of dollars into ACORN and its affiliate, the ACORN Housing Council (AHC). Because of that, these groups must be held accountable for not only their histories of questionable practices but for how they will spend this massive cash influx funded by American taxpayers. Appropriate oversight has not been established and as we’ve recently seen, the opportunities for fraud within ACORN are rampant….

In the same vein, the Competitive Enterprise Institute’s blog, OpenMarket.org, calls the pending bill an ACORN slush fund.” After noting the untrustworthiness of government trust funds, John Berlau notes that

the granddaddy of all phony government trust funds may be soon enacted in housing bailout legislation before Congress. The so-called Affordable Housing Trust Fund — part of the legislation that passed the Senate Banking Committee in May and is poised to come to the Senate floor as early as this week — is almost set up from the beginning to be diverted to purposes other than affordable housing. The holes in this “trust fund” would allow the money to be easily siphoned off to liberal activist groups such as Association of Community Organizations for Reform Now (ACORN) for lobbying and even political campaigning…..

There are prohibitions on using the funds for lobbying and political activity, but the bills — including the Banking Committee package — contain virtually no teeth in enforcing these bans. There are no explicit requirements for recipients of the grants to fill out timesheets for housing activity, or restrictions on groups using grant money to pay employees who also happen to do other things — such as lobbying and political campaigning. And there are really no penalties other than being forced to give the money back and being disqualified for a new grant.

Read the whole thing, since all I want to stress here is that we may expect a great deal more of the publicly funded “voter education” that we’ve seen recently in Missouri and Arizona.

Oh, and one more thing. While you’re savoring ACORN’s tactics as described in the sources linked above, you may also want to recall one of ACORN’s greatest successes to date has been leading a voter registration drive that helped elect its Chicago lawyer, Barack Obama, to the Illinois state senate, an alliance that was richly rewarded by the new senator during a generally unproductive senate career. As City Journal’s Steven Malanga pointed out in the article linked above,

Obama’s legislative achievements as a state senator were not extensive, but his supporters count among his biggest victories his work to expand subsidized health care in Illinois with social-justice groups like United Power for Action and Justice, an offshoot of Alinsky’s Industrial Areas Foundation. Later, when he announced his run for president, Obama visited some of these groups and reminded them of their long struggles together. Meeting last November with the leaders of the Association of Community Organizers for Reform Now (Acorn)—the nationwide network of left-wing community groups that taps government money for a host of causes—Obama declared: “I’ve been fighting alongside Acorn on issues you care about my entire career,” including representing Acorn in a court case in Illinois. Acorn members apparently reciprocated by working hard to turn out voters for Obama’s Illinois campaigns, according to a 2003 piece in the magazine Social Policy by a Chicago-area Acorn organizer. After the candidate’s November appearance, Acorn’s affiliated political action committee endorsed Obama for president.

Obama’s nomination will be celebrated as a first for African-Americans. But the racial symbolism may obscure the importance of his presidential run to the tens of thousands of government-funded community groups that stand to benefit from an Obama agenda that’s right out of the 1960s….

Actually, by comparison to ACORN’s tactics and vision, the 1960s look pretty tame.

Say What?