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Ousted ACORN members seek federal criminal investigation

| Thursday, Jan. 8, 2009

A group of dissident members is seeking a federal investigation of ACORN for alleged criminal violations stemming from an embezzlement scandal that rocked the organization last year.

The splinter group, ACORN 8, released a 24-page document Wednesday that asks federal investigators to consider fraud, embezzlement and conspiracy charges, and criminal civil rights violations relating to the embezzlement of nearly $1 million from the nonprofit's accounts and an alleged cover-up of the theft for almost a decade.

"Moreover, due to the admission that a felony has been committed, other federal offenses may have also been committed ... ," states the document signed by 14 members of ACORN 8, including recently expelled members of ACORN's national board of directors.

The embezzlement and accusations of voter registration fraud in at least eight states, including Pennsylvania, have cost ACORN -- the Association of Community Organizations for Reform Now -- the support of a benefactor that gave the activist group $7 million in the past decade.

The ACORN 8 complaint alleges violation of the civil rights of board members who sought to investigate the embezzlement and subsequently were removed from the board.

The action stems from a bitter dispute within ACORN since disclosure in June that Dale Rathke, brother of ACORN co-founder and former Chief Organizer Wade Rathke, embezzled $948,000.

ACORN officials last year announced a settlement agreement to recoup the money. No criminal charges resulted.

Rift with national office

ACORN 8 members, however, claim the embezzlement was symptomatic of deeper problems. Top staff and members of the board's executive committee have stymied internal efforts to reform ACORN and open its operations, they maintain.

"We're trying to officially ring the bell by notifying federal authorities," said Michael McCray, a civil rights attorney and member of ACORN's Washington branch who supports ACORN 8.

ACORN 8 members delivered the complaint to U.S. Attorneys' offices in several states and the District of Columbia, seeking an investigation into the 38-year-old activist organization based on information detailed in the document, McCray said.

"We're not trying to destroy ACORN. We love ACORN, but it needs to be reformed," McCray said. "Members have to take control of ACORN and try to get it back on the right track."

A spokeswoman for the U.S. Attorney's office in Dayton, Ohio, confirmed that an ACORN 8 representative presented a complaint, which was referred to the FBI.

Scott Levenson, ACORN's national spokesman, didn't respond to a request for comment.

Levenson has described ACORN 8 as an effort led by "two renegade former members of the board" who decided "for their own reason they were going to take matters into their own hands."

"Obviously, no board can operate that way. That's the crux of the matter," Levenson told the Tribune-Review last month.

Two members of ACORN's national board of directors, Washington ACORN President Marcel Reid and Minnesota Chair Karen Inman, inadvertently started the ACORN 8 movement after fellow board members elected them last summer to reorganize ACORN and recommend improvements to prevent embezzlement.

Reid, Inman and six other ACORN members filed a lawsuit in Louisiana seeking access to financial records kept by Citizens Consulting Inc., the ACORN affiliate Dale Rathke headed when he stole money.

Most of ACORN's 51-member board of directors, however, decided to drop the lawsuit.

Internal wrangling

After Reid, Inman and others continued to seek a court decision, ACORN's executive board removed Inman and Reid from the national board. Subsequently, Inman and Reid were notified they no longer are ACORN members.

The executive committee, after consulting state and local boards, voted unanimously to remove Reid and Inman because their actions -- such as releasing a confidential legal memo to the press -- were "damaging the organization," Levenson said.

Reid was banned from entering ACORN's D.C. office. She and members of her local board meet in a private residence, said Reid, an ACORN member for nearly 10 years.

"I was attracted to the mission of ACORN to help people, to alleviate poverty," Reid said. "We asked to see the books because the promissory note indicated a theft had occurred. They played games with us."

Inman, a retired school teacher who lives in St. Paul, Minn., became a dues-paying ACORN member about four years ago when an ACORN worker knocked on her door and sang the praises of the group's work.

Charles Turner, a member of ACORN in D.C. for 10 years and signer of the ACORN 8 complaint, said that "everybody who knew about the embezzlement, or was in a position that they should have known about it, should be separated from ACORN."

"I'd like to see somebody go to jail," Turner said.

Discovering problems

ACORN's board learned about the stolen money in June, about eight years after Wade Rathke learned that Dale Rathke, who was in charge of keeping ACORN's books, misappropriated the money. Wade Rathke negotiated a settlement with top ACORN managers, agreeing that the Rathke family would restore $30,000 a year until the money was repaid.

The family repaid about $210,000 by June, when information leaked about the embezzlement and news of the scandal broke in The New York Times. An ACORN donor reportedly repaid the balance.

Dale Rathke was fired from ACORN in May. Directors in June voted to fire Wade Rathke, although he negotiated a deal to remain chief organizer of ACORN International, an affiliate organization then based in the same New Orleans office with ACORN and its many subsidiaries.

The embezzlement resulted in ACORN's loss of one long-standing prominent benefactor -- the Catholic Campaign for Human Development, which gave ACORN more than $7 million in the past decade. The charity canceled plans to donate $1.2 million to ACORN affiliates this fiscal year. The U.S. Conference of Catholic Bishops in November severed ties with ACORN.

ACORN and its affiliates received more than $31 million in federal grants between 1998 and this year, according to an analysis by the staff of House Republican Leader John Boehner of Ohio. Boehner called for an end to federal grants to ACORN and its affiliates, pending investigations into voter registration fraud allegations.

Voter registration concerns

ACORN is being investigated in Pennsylvania and several other states on accusations of filing fraudulent voter registration forms.

Criminal charges could result from nearly 100 fraudulent voter registrations submitted in the Pittsburgh area, including some from ACORN employees, according to the Allegheny County District Attorney's office. Mike Manko, a spokesman for District Attorney Stephen A. Zappala Jr., said the case is an "active investigation" involving county police and the FBI.

ACORN has chapters in 110 cities and 40 states. The group boasts it represents about 400,000 members. It completed a massive registration drive this year in poor and working-class neighborhoods, which tend to vote Democratic, across 21 states, signing up more than 1 million voters.

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