Three Strikes – A Mighty Grassroots Group Goes Down Swinging
Post #2 in a series on California ACORN’s transformation into ACCE.
Like many Americans, I knew virtually nothing about ACORN (which was founded in 1970 by a gifted community organizer, Wade Rathke, who led the grassroots organization for nearly four decades as it grew into a powerful force nationally) until a series of controversies came to light in recent years.
The three controversies were: a nearly $1 million embezzlement and cover-up, persistent allegations of voter-fraud in state after state across the country, and secretly recorded videotapes in which a couple posing as a prostitute and a pimp elicited advice from ACORN staffers on illegal activities.
“The hidden camera controversy is perceived by many as a third strike against ACORN on the heels of the disclosure in June 2008 of an embezzlement cover-up, which triggered the firing of ACORN’s founder, and the allegation of voter registration fraud during the 2008 election, done in collaboration with Project Vote.” – Scott Harshbarger, December 2009 report [pdf]
A closer look at these controversies reveals considerable institutional misconduct and negligence on ACORN’s part, as well as trumped up allegations and manufactured outrage by the organization’s political enemies.
In this post, I will relate the basics of the first controversy. (Two of my sources, which provide much detail, are: ‘Funds Misappropriated at 2 Nonprofit Groups,’ by Stephanie Strom, New York Times, July 9, 2008 and “After an Embezzlement, An Advocacy Group Seeks to Regain Trust,” by Pablo Eisenberg, Chronicle of Philanthropy, October 2, 2008. In a future post, I intend to look a bit more closely at each of these accounts and at what I learned from Amy Schur, ACCE’s executive director, in my interview with her last week.)
In May 2008, a whistle-blower revealed to ACORN funders that Dale Rathke, Wade Rathke’s brother, had embezzled $948,607.50 from a number of organizations affiliated with ACORN nearly a decade earlier – in 1999 and 2000. Wade Rathke had arranged an in-house resolution (which appears to be more deferential to his brother’s interests than to ACORN’s) of the wrongdoing and imposed a cover-up. The theft was carried on the books as a loan, which the Rathke family agreed in writing to pay down at a rate of $30,000 annually – over 31 years’ time – beginning in 2001. Dale Rathke was retained as an employee of ACORN at an annual salary of $38,000.
Wade Rathke hid this information from the organization’s Board of Directors, though he did advise ACORN’s Management Council (a small group of senior staff members) of the misappropriation and the agreement to make restitution in installments. When this information came to light in May 2008, the organization finally took steps to increase accountability.
On June 2, 2008, Dale Rathke was removed from the payroll, and Wade Rathke stepped down as the organization’s president (though he continues to serve as chief organizer for an affiliated group, ACORN International).
This was (before May 2008) a case-study of appalling institutional failure. Senior management demonstrated loyalty and trust, but also a dearth of integrity and judgment, while institutional checks and balances, transparency, and accountability were nowhere to be found. These missing elements are essential to a responsible, well-managed nonprofit organization.
Strike one.
Tomorrow I will turn to the second controversy, representing strike two. In a later post, I will look a bit more closely at the organization’s responses to the embezzlement – first when the Management Council learned of the theft and years later when foundations, big donors, and 150 ACORN organizers discovered what had happened.
(Photograph of Albert Pujols courtesy of artolog on Flickr.)
Initial post in this series: California Chapter Splits from ACORN to Form New Group
There are a number of inaccuracies in this posting.
First, the “three strikes” includes persistent allegations of voter registration fraud, which is substantially different from voter fraud in several key areas. Also, it should be noted that those accusations stem from cards turned in by ACORN already marked as suspicious, since they were flagged by ACORN’s quality control system. The accusations of registration fraud were politically motivated and they form the roots of the US Attorney scandal. David Iglesias himself says that he was fired for not trumping up charges against ACORN’s New Mexico voter registration effort after the 2004 election.
Second, Wade Rathke is the Chief Organizer of Community Organizations International, which was formerly ACORN International, but ACORN severed all ties with AI with the firing of Mr. Rathke and forced them to change their name so there was explicit recognition of the lack of ties between the organizations. So it is not accurate to imply that either Rathke brother has anything to do with the existing ACORN organization.
by Nathan HJ
on 09. Feb, 2010
I completely agree with your first comment. My discussion in Post #3, ‘Mickey Mouse Registers to Vote (as a Democrat),’ relies on the distinction you make. I referred to ‘voter fraud,’ rather than ‘voter-registration fraud,’ because that is almost always how the issue was discussed in the press and by the McCain campaign. (As a regular reader of Talking Points Memo, I am well-aware of the U.S. Attorney scandal. I even found a quote by David Iglesias for the Mickey Mouse post, but I cut it out on my final edit. Here’s the link: http://tpmmuckraker.talkingpointsmemo.com/2008/10/iglesias_im_astounded_by_dojs.php )
You’re obviously well-informed about ACORN. After reading your second comment, I did a quick web search and discovered that you’re right: ACORN International changed its name (at ACORN’s behest) to Community Organizations International and no longer has a relationship with ACORN.
I appreciate your setting me straight.
by pgolio
on 09. Feb, 2010