Obama to amend report on $800,000 in spending
By David M. Brown
Published: Friday, Aug. 22, 2008
U.S. Sen. Barack Obama's presidential campaign paid more than $800,000 to an offshoot of the liberal Association of Community Organizations for Reform Now for services the Democrat's campaign says it mistakenly misrepresented in federal reports.
An Obama spokesman said Federal Election Commission reports would be amended to show Citizens Services Inc. -- a subsidiary of ACORN -- worked in "get-out-the-vote" projects, instead of activities such as polling, advance work and staging major events as stated in FEC finance reports filed during the primary.
FEC spokeswoman Mary Brandenberger said it is not unusual for campaigns to amend reports, even regarding large sums of money.
But, said Blair Latoff, spokeswoman for the Republican National Committee: "Barack Obama's failure to accurately report his campaign's financial records is an incredibly suspicious situation that appears to be an attempt to hide his campaign's interaction with a left-wing organization previously convicted of voter fraud. For a candidate who claims to be practicing 'new' politics, his FEC reports look an awful lot like the 'old-style' Chicago politics of yesterday."
In response to the RNC's position, Obama campaign spokesman Ben LaBolt said in an e-mail: "The RNC can concoct all of the outlandish conspiracy theories they want, but when we saw that our FEC report didn't accurately reflect the field work CSI was hired to perform we corrected it. It's pretty bold for the RNC to attack us for a clerical error after John McCain's campaign was just forced to return $50,000 raised by a foreign national through a number of contributors who weren't even supporting McCain."
Melanie Sloan, executive director of the liberal-leaning Citizens for Responsibility and Ethics in Washington, said the campaign's error on FEC documents doesn't seem extraordinary, especially considering the huge amounts of money being spent.
"It's rare that people don't file any amended reports. If he has a pattern of lots and lots of amended reports, that would be more noteworthy than an occasional one," Sloan said.
Jim Terry, spokesman for a group that tracks ACORN, said Citizens Services Inc.'s involvement in the Obama campaign raises bigger questions.
"All of this just seems like an awful lot of money and time spent on political campaigning for an organization that purports to exist to help low-income consumers," said Terry, chief public advocate for Consumers Rights League, a Washington, D.C., advocacy outfit with a libertarian outlook.
"ACORN has a long and sordid history of employing convoluted Enron-style accounting to illegally use taxpayer funds for their own political gain," Terry claimed. "Now it looks like ACORN is using the same type of convoluted accounting scheme for Obama's political gain."
Obama is the CSI's first national candidate, although the company has worked for several regional candidates in recent years, said Jeff Robinson, CSI's executive vice president.
"Our contracts were relatively small for Obama," he said, declining to specify amounts because of "proprietary" rights of CSI's clients. The largest project for Obama was during the Ohio primary, he said.
"That was a very short-term contract for one week of work. In Ohio, they asked us to do canvasses in five cities statewide," Robinson said.
The Ohio primary was March 4. According to FEC records, the Obama campaign paid Citizens Services Inc. $832,598.29, from Feb. 25 to May 17.
A Trib analysis of campaign finance reports showed Obama paid CSI for services that stood out as unusual. For example, CSI received payments of $63,000 and $75,000 for advance work. Excluding the large payments to CSI, the average amount the Obama campaign spent with other organizations was $558.82 per check on more than 1,200 entries classified as advance work.
Citizens Services Inc. is headquartered at the same address as ACORN's national headquarters in New Orleans. Citizens Services was established in December 2004 to "assist persons and organizations who advance the interests of low- and moderate-income people," according to paperwork filed in Louisiana. In a 2006 ACORN publication, Citizen Services Inc. is described as "ACORN's campaign services entity."
ACORN describes itself as the nation's largest grass-roots community organization of low- and moderate-income people, operating in 110 cities across the country, including Pittsburgh.
Founded in Arkansas in 1970, ACORN long has been considered a political ally of the Democratic Party. It has received praise from leading Democrats, such as Howard Dean and former President Bill Clinton, for its community activism, especially regarding efforts to increase housing for low-income people and restoration work after Hurricane Katrina.
Early in his career, Obama worked as an organizer for Project Vote, an ACORN offshoot, and represented ACORN in legal actions, according to various published reports, including Associated Press articles. ACORN's political action committee endorsed Obama in the primary.
The organization has sparked controversy.
Accusations of voter fraud have followed ACORN's canvassing projects in about a dozen states. ACORN has dismissed the charges as politically motivated allegations from conservative groups, yet cases are pending and, in other cases, ACORN workers have entered guilty pleas. For example, three ACORN workers pleaded guilty to submitting phony voter registration forms in Washington, and eight ACORN employees pleaded guilty to federal election fraud in Missouri.
ACORN is at the center of a scandal involving a $1 million embezzlement by Dale Rathke, brother of ACORN founder Wade Rathke. ACORN discovered the embezzlement in 2000 but did not alert law enforcement officials.
ACORN's management committee instead negotiated an agreement to have the Rathke family repay the stolen funds, according to a report in The New York Times. The Rathke brothers resigned from ACORN this summer after news reports disclosed the embezzlement. A donor agreed to repay the most of the money, the Times reported.
Sunday Alabi, an ACORN activist and spokesman in St. Paul, is one of CSI's three-person board of directors. Alabi described CSI as a nonprofit consulting firm related to ACORN.
"I do not know the day-to-day work of what they do. I'm on the board," Alabi said, referring other questions to Robinson, the executive vice president.
Robinson said CSI is a "not-for-profit political and campaign management firm, much like any political consulting firm."CSI is not tax-exempt under any IRS code, he said. Without tax-exempt status, the organization isn't bound by IRS restrictions for nonprofits on political activities.
"We have a wide range of clients. We provide political campaign management. We provide field services," Robinson said. "Our clients are typically considered liberal. Our clients are labor unions, liberal to progressive candidates, nonprofit organizations on the liberal side of the political spectrum."
In 2006, CSI collected all the signatures and managed successful statewide ballot measure campaigns in Missouri, Ohio, Colorado and Arizona to increase the minimum wage, he said. "We have a good reputation. We provide good services."
Regarding CSI's nonprofit status, Robinson said: "We are organized specifically not to make money, but we make money. There are no profits. We have a staff of 60 people around the country, and that eats up our entire profit. We're not a for-profit corporation, but we are not a group like a United Way."
CSI is a "separate organization entirely" from ACORN, he said.
"ACORN is a client of ours," Robinson said. "ACORN has a lot of different partner organizations. We are a partner, but we are separate."
Robinson is listed on several Web sites as national deputy political director for campaigns and elections at ACORN. He is also listed as political director at the nonprofit Communities Voting Together and as a consultant at Project Vote. He did not return phone calls or an e-mail request for a follow-up interview.
Money flows back and forth between ACORN, Citizens Services Inc., Project Vote and Communities Voting Together. ACORN posts job ads for Citizens Services and Project Vote. Communities Voting Together contributed $60,000 to Citizens Services Inc., for example, in November 2005, according to a posting on CampaignMoney.com . Project Vote has hired ACORN and CSI as its highest paid contractors, paying ACORN $4,649,037 in 2006 and CSI $779,016 in 2006, according to Terry of the Consumers Rights League. Additional Information:
Add it up
During primary campaigning in February through May, Barack Obama's campaign paid Citizens Services Inc. $832,598.29, for services including:
• $310,441.20 -- Feb. 25, staging, sound, lighting
• $160,689.40 -- Feb. 27, staging, sound, lighting
• $98,451.20 -- Feb. 29, travel/lodging
• $74,578.01-- March 13, staging, sound, lighting
• $18,417.00 -- March 28, polling
• $18,633.60 -- April 29, staging, sound, lighting
• $63,000.00 -- April 8, advance work
• $105.84 -- May 2, license fees
• $105.84 -- May 2, license fees
• $75,000.00 -- May 17, advance work
• $13,176.20 -- May 17, per diem
Obama spokesman Ben LaBolt indicated all work by CSI would be amended to the category of field work.
SOURCE: Federal Election Commission
Democrat Barack Obama's campaign lists total receipts through the end of July at $401.3 million, including $375.9 million in donations from individuals. The campaign has spent $335.5 million.
Republican John McCain lists receipts totaling slightly less than $171.1 million. Individuals donated $145.6 million of that. The campaign has spent about $149.7 million.
SOURCE: Federal Election Commission
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