ACORN Can Run But They Can’t Hide

ACORN Can Run But They Can’t Hide


ACORN Armageddon, in a last ditch effort to thwart federal and state investigators, and avoid criminal liability; ACORN, the community activist group targeted by right-wing media shuts down its national operations due to declining revenues and ongoing state and federal investigations.

The Associated Press reported that funding problems led ACORN's board to decide to suddenly dissolve the group over the next few months. State affiliates and ACORN field offices that haven't already split off will be closed by April 1, 2010 while other local chapters reorganize under different names.

The national board also approved a plan to resolve all outstanding debts and to determine whether ACORN would file for bankruptcy. Battered from the right and suffering from mismanagement and a severe loss of government and other funds, ACORN considers filing bankruptcy in the wake of a widely publicized series of video recordings made by two conservative activists posing as a pimp and a prostitute.

On behalf of the ACORN 8, we are saddened but not surprised by the announcement of ACORN’s dissolution. As former board members and community leaders, the ACORN 8 were uniquely qualified and well positioned to know the interworking of ACORN (both the good and the bad) and have access to documentary proof. We fought long and hard to reform the association before its ultimate demise.

Unfortunately, instead of condemning the fraudulent conduct of its senior management when it had the chance; ACORN chose to continue an eight-year cover up and remove the courageous board members who fought for Truth and Transparency. ACORN became corrupted by an insatiable appetite for political power at the expense, instead of for the benefit, of the low and moderate income membership that ACORN was founded to serve.

After the videos emerged and quickly became fodder for 24-hour cable news coverage, ACORN commissioned an internal review by a former attorney general of Massachusetts, Scott Harshbarger. His report, released in December, said the employees portrayed in the videos had not engaged in any illegal activity. However, Harshbarger only reviewed the internal controls related to applicant intake and the hidden videos. Harshbarger never held the actual authority to fully investigate or completely right the ACORN ship.

However, the organization was dogged by financial problems and accusations of fraud - long before the salacious videos delivered what may be ACORN’s final blow.  During the summer of 2008, infighting erupted following a $1 Million embezzlement of ACORN funds by the brother of the organization’s founder.

Thus, for the second time in two years, ACORN has purported to put its proverbial house in order following a major breach of public trust. The year before last, ACORN’s national board of directors installed an Interim Management Committee (IMC) upon learning of Dale Rathke’s embezzlement and the related cover up by senior staff, including Wade Rathke, and ACORN Executive Committee members. 

After firing Wade, the national board appointed three  board members, Karen Inman, Carol Hemmingway, and Marcel Reid to collectively act in his stead. Inman was to address legal affairs; Hemmingway considered financial matters; and Reid handled governance for ACORN’s IMC.

Additionally, ACORN’s national board authorized the IMC to hire independent professionals to investigate and help reorganize ACORN following decades of arguable domination by the Rathke family. The IMC in turn pursued more definitive remedial actions, including a complete accounting of all ACORN assets, a forensic examination of the known embezzlement and an independent audit of ACORN and its related entities.

Unfortunately, ACORN’s Executive Committee and other corporate insiders swayed 38 of 50 national board members to abandon the IMC and remove its prudent board members.  Nevertheless, eight courageous, ACORN board members and community leaders, banded together and formed the ACORN 8, LLC to reform the once venerable ACORN. 

 ACORN held a teleconference this weekend to discuss plans for a preemptory bankruptcy filing. Over the last year, ACORN national has been hiding and shifting corporate assets. For instance, ACORN Chief Executive Bertha Lewis, fired Beth Butler the leader of Louisiana ACORN in a dispute over Louisiana chapter assets.

ACORN is engaged in a corporate “shell game.” They quickly move properties and assets around and we try to guess which corporation they hid the money in. After looting all the valuable assets and properties and hiding them in related companies; ACORN now wants to file bankruptcy, shut its door and stiff its creditors – while avoiding any transparency or accountability for its corrupt leadership.

The ACORN 8 has always sought to go after the corrupt managers who hijacked ACORN - individually. That way it doesn’t matter what new corporations they form or what they change their name to. If you prosecute the actual criminals – you will eventually stop the crimes. Credible witnesses with inside information who are ready, willing and able to testify; to this day, the ACORN 8 remain the greatest threat that ACORN wrongdoers have ever faced.

ACORN has long fought to thwart any real investigation or independent forensic audit. But filing a bankruptcy petition will subject them to the scrutiny of a bankruptcy trustee and court. Moreover, bankruptcy creditor will have the right to invalidate any “fraudulent transfers” which occurred within a year prior to the bankruptcy filing. This will expose all of the “new entities” to court scrutiny. 

ACORN can run into bankruptcy court if they want to but they can’t hide from truth, transparency and accountability. Go after the criminals, prosecute the crimes and reform the entire association.