Wednesday, August 19, 2009
By Jacob M. Jordan
<Many of the sources for this article series were obtained by accessing university archives; their reproduction is a copyright infringement in most cases. Please contact jjordan@tirademedia.com if you would like source information.>
In the first part of this article, we took a look at the philosophical foundations that ACORN was built upon. Now, we will look at ACORN’s actual creation.
In 1970, while still a director for the NWRO, George Wiley sent another NWRO organizer named Wade Rathke to Arkansas. Whereas the NWRO’s efforts had thus far been directed towards larger municipalities, Wiley sought to establish the group’s presence within the southern United States. By asserting its agenda in more provincial locales, Wiley was also appealing to a different demographic. If the interests of low-income whites became a priority, the group’s image as a “fringe” group would become somewhat mitigate. It was the racial issue, however, that brought the internal friction of the NWRO to a fever-pitch—particularly Wiley’s exaltation of Rathke to within the NWRO ranks. At this point, however, the possibility of a much larger group became supreme. In 1970, Wiley, Rathke, and another NWRO member named Gary Delgado both left the welfare-rights group and began the Association of Community Organizations for Reform Now. In 1973, just three years after ACORN’s inception, Wiley died in a sailing accident. Rathke—himself a college drop-out whose involvement with SDS and the NWRO had schooled him in anti-establishment activism—became the driving figure behind ACORN.
Initially, the issues the group dealt with involved more “palatable” goals—such as improving school lunch availability, utility rates for the low-income population. The welfare and living-wage focus of the NWRO remained intact, but was not the centerpiece of ACORN’s social agenda as it had previously been. Within its first couple of years, ACORN had set up shop in a handful of other locations within Arkansas, eventually expanding into South Dakota and Texas.
To give a sense of ACORN’s potential influence in a given community, consider this: In 1974, in Pulaski County, Arkansas, a local election was held. The county’s legislative body, known as the “Quorum Court,” had 467 seats. ACORN members won 195 of them.
In 1975, ACORN had created its first executive board, electing Steve McDonald as its president. ACORN was rapidly transforming from a simple community organization into a national force; its access to easily-mobilized community groups gave it a sway that politicians dreamed of. By 1980, ACORN had spread to 20 other states. In tandem with ACORN’s grass-roots expansion, the group was also developing into a much more centralized entity, thereby permitting it to strengthen its national voice.
ACORN: The Entrepreneurial Spirit
Not only had ACORN elected a figurehead to coordinate the activities of its scattered, local offices. It had also made some structural changes, as well. In 1975, the leaders of ACORN made a decision that any growth-focused business would make: diversified its activities, thereby increasing its “market share” in the world of community organization. ACORN Associates, Inc. and the Institute for Social Justice (ISJ) are the groups that resulted from this diversification. Essentially, the groups imparted the art of community organizing to those who wished to learn—for a fee, of course.
Granted, such self-promotion is not evil or even unethical. However, in order to understand the allegations of ACORN’s criminal behavior, it is imperative that extent of ACORN’s presence be made somewhat clear.
ACORN co-founder Gary Delgado, in his 1986 book, “Organizing the Movement: The Roots and Growth of ACORN,” describes three specific principles behind the creation of this network: First, these groups (especially the ISJ) would “provide ACORN with a nonprofit, tax-exempt arm, important for securing foundation grants.” As will become evident later on, it is ACORN’s tax-exemption status that lies beyond much of its current notoriety. Delgado continues: “Second, it [the Institute for Social Justice] would serve as a means of organizer recruitment, through both the training sessions and the intern program.” Therefore, ACORN would not only expand its rolls, it would also monopolize the “trade” of community organization by exporting not only methods of activism, but also its goals—which Delgado says is the third idea behind creating other groups. By 2008, one could count over 200 different ACORN-affiliated groups, with names as distinct as Association for the Rights of Citizens, American Home Childcare Providers Association, Broad Street Corporation, Development Fund, Metro Technical Institute, Montana Radio Network, Shreveport Community Television, etc.
While one can come across legitimate information in the mainstream media when it comes to the organizations specific misdeeds, soundbyte reporting is simply not adequate in explaining the scope of ACORN’s crimes. ACORN is much more than a group that simply facilitates fraudulent voter-registration practices; the group is actually more akin to a state-sanctioned criminal enterprise.
Getting Lost in the Labyrinth (How to Deter the IRS)
In dissecting the Enron-like structure of ACORN, you must understand two tax-brackets: 501(c)(3) and 501(c)(4). Tax-exempt organizations which fall within the “3” status can receive grants from the government and other donors, and almost totally restricted from any sort of lobbying or campaigning. They are under the heaviest restrictions as far as what they can do with their money. A group whose activity is limited exclusively to registering citizens and educating them about the voting process would fall under this category. No endorsements of political candidates are allowed, directly or indirectly.
Those tax-exempt groups which fall under the “4” status, however, are not quite so restricted. “4s” are allowed to engage in political lobbying, so long as such lobbying is for the sake of promoting the general social welfare—not just the welfare of a select group. The IRS also calls these groups “social welfare organizations.” The lobbying activity prevents “4s” from receiving federal (tax-payer) money, which the “3s” can. Generally, the mind-numbing web of organizations that comprise “ACORN” are one of the two. Consequently, ACORN has been able to get around the “partitions” that are supposed to keep these groups separate, financially and managerially speaking.
In 1977, only seven years after its creation, ACORN received a government grant worth approximately $470,000. An investigation by the U.S. House of Representatives later determined that ACORN had used the money (through one of its affiliates, of course) to recruit more ACORN members. Of course, like all of ACORN’s financial misappropriation, this was done through another group—its “Community Organizations Research and Action Project.” Essentially, ACORN used federal funds to fuel its own recruitment.
Similarly, in a 1997 report by the congressional Committee on Economic and Educational Opportunities, attention is given to the Inspector General’s “findings on the apparent cross-over funding between ACORN, a political advocacy group and ACORN Housing Corp. (AHC), a nonprofit, AmeriCorps grantee.”[[1]] According to the same report, ACORN Housing, the recipient of the federal dollars, had shared office space and resources with its partisan counterpart (ACORN). It was also determined that AmeriCorps members were used for voter registration purposes, as well as candidate endorsement.
Citizen’s Consulting, Inc.
You might be familiar with the accounting firm Arthur Andersen. Arthur Andersen is no longer around; the company went bankrupt after it was revealed that they had been manipulating the books for their biggest client—Enron. To a great extent, Citizen’s Consulting Inc. is essentially the Arthur Andersen for ACORN. Whenever any of the hundreds of ACORN’s 501(c)(3) affiliates receive any federal money, CCI doles it out, conducting millions upon millions of dollars in transactions from one account to another.
For example, take a look at the ACORN Housing Corporation’s 2006 tax returns. You will notice CCI was paid $238,953 for “Administrative Services.” CCI is all over the place when it comes to the tax records of ACORN-affiliates. Sometimes CCI is on the “payable” side, sometimes the “receivable” side. One more thing—the Chief Financial Officer of Citizen’s Consulting, Inc. got caught with approximately $950,000 that belonged to his client. This is somewhat pertinent, considering that the CFO is Wade Rathke’s brother, Dale. The embezzlement became known to a select few at ACORN, who kept it under wraps for eight years, according to a U.S. congressional report. According to a criminal complaint filed by ACORN Fortunately for Dale Rathke, his brother Wade kept him employed as an ACORN employee during those years. When the embezzlement was no longer a secret, however, Wade himself resigned in June, 2008.
Are you starting to understand how ACORN’s troubles go beyond the forgery of voter-registration signatures?
The ACORN 8: Insiders Who Dared to Rock the Boat
The financial irregularities, Dale Rathke’s embezzlement, voter-registration fraud and other issues all came to a head when a group of ACORN members were chosen by the Executive Board to serve on ACORN’s Interim Management Committee (IMC). The IMC was put into place as part of a visible self-audit following the Dale Rathke shake-up. When the IMC began to probe ACORN’s finances and other activities, the cash flows did not add up. After requesting to see CCI’s books, they were denied. On November 9, 2008, Marcel Reid, Karen Inman, Coya Mobley, Adrianna Jones, Yvonne Stafford, and Fannie Brown and Louis Davis were all notified of their dismissal from the IMC. Fourteen ACORN members, including the seven IMC members filed a criminal complaint alleging that ACORN was guilty of a string of crimes, including Rico violations, mail fraud, giving false statements to government agents, and civil rights violations related to their firing.
ACORN has clearly engaged in criminal activity—for decades. is critical that American citizens put pressure on their representatives, senators, and the Department of Justice. This organization already has enough of a foothold within our government. It seems that we are at a watershed moment; our current President has been employed by and provided legal representation for ACORN. Not only that, but given ACORN’s claims of having registered a record-breaking 1.3 million voters in the 2008 election, and the widespread complaints of fraud accusations, the veracity of the election results are themselves thrown into doubt. In light of all of this, individuals such as those in the ACORN 8 are still finding the temerity to step up and testify against ACORN—even in the face of intimidation. Whether justice is served or not may end up being decided by “average” American citizens who stand up and demand that their government thoroughly investigate ACORN.
[1] SUBCOMM. ON OVERSIGHT AND INVESTIGATIONS, 104TH CONG., “Report on the Activities of the Committee on Economic and Educational Opportunities,” H. REP. NO. 104-875, at 69-70 (Comm. Print 1997) (emphasis added).