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ACORN Corruption – Lawsuit Filed by Board Over Embezzlement

October 2, 2008

In August, two members of an ACORN interim management committee — Washington, D.C., board member Marcel Reid and Minnesota board member Karen Inman — filed suit in New Orleans seeking access to financial records and to remove Rathke from all ACORN-affiliated groups. They said a June 20 board resolution directed Rathke to step aside from any activities having to do with ACORN.

Rathke’s wife said his new employer, ACORN International, is a separate group with separate offices.

Here is what happenned:

The imbroglio dates to 1999 and 2000, when the nonprofit was calling for local increases in the minimum wage and trying to unionize hospitality workers in New Orleans. Dale Rathke, the founder’s brother, was serving as comptroller through a related organization called Citizens Consulting Inc., and Lewis said he abused his authority by using the group’s credit cards to buy things that were unrelated to its work.

A co-worker alerted Wade Rathke, who consulted with a few of ACORN’s national leaders. When the group’s longtime accountants at the New Orleans firm Duplantier, Hrapmann Hogan & Maher conducted an audit and found that $948,507 had been stolen, the Rathke family set up a formal repayment schedule. Dale Rathke was removed as comptroller at CCI, but he stayed on as a consultant at ACORN.

Lewis said the 51-member board did not know about the apparent theft until an ACORN financial supporter heard about it this spring and raised questions about whether its contributions had been misappropriated.

National board members were furious at the disclosure, and they have asked for a full airing of how the money was stolen and why it was kept secret from group for so long.

Dale Rathke resigned in early June. Wade Rathke also resigned from his position as chief organizer but remains with an affiliated group, New Orleans-based ACORN International, which does human rights work overseas.

The Rathke family repaid about $214,000 starting in 2001 through a loan taken out by CCI, and a California donor, Drummond Pike, recently stepped in and repaid the remaining debt.

Corruption All Over The Place
Wade Rathke told board members in June that he did not try to cover up his brother’s misdeeds. He asserted that he and other managers thought the repayment plan represented the best course of action because it would keep the incident out of the press, where it could provide fodder for political opponents at a time when ACORN had much work to accomplish, according to minutes of the meeting, which were available at Orleans Parish Civil District Court.

Rathke’s wife, Beth Butler, executive director of ACORN New Orleans, disputed the account of some board members that the family kept the embezzlement hush-hush. She said ACORN’s national executive committee and regional leaders knew what was going on, and its national executives took steps make sure CCI modernized its accounting controls.

– AP

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One comment

  1. Acorn and all the “shell organizations” that are ACORN too need to be exposed. It does not surprise me that traditional media does not have the courage to tackle this. With the exception of CNN’s Lou Dobbs. Thanks Lou! Like the truth that exposed Dan Rather, let bloggers who can provide information that will shed light on the TRUTH, please come forward.



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