Thread: ACORN embezzlement was $5 million, La. AG says

ACORN embezzlement was $5 million, La. attorney general says
By Robert Travis Scott
October 05, 2009, 7:46PM

Louisiana's attorney general has broadened the scope of an investigation of ACORN to include a possible embezzlement of $5 million a decade ago within the community organization, five times more than previously reported.

ACORN Chief Executive Officer Bertha Lewis said the new reported amount is "completely false."

Attorney General Buddy Caldwell has been conducting an investigation of ACORN since June. He issued subpoenas in August seeking documents related to former ACORN International President Wade Rathke and his brother Dale Rathke, who kept the group's books. Those subpoenas were focused on possible ACORN violations for non-payment of employee withholding taxes, obstructing justice and violating the Employee Retirement Security Act. No charges have been made.

The attorney general had inquired in June into an alleged embezzlement within ACORN that happened 10 years ago. The group last year dealt with an internal dispute and a lawsuit involving accusations that Dale Rathke made nearly $1 million in improper credit card charges in 1999 and 2000. The brother and a donor repaid the money.

Caldwell said last month that the statute of limitations presented obstacles to prosecutors taking action on the embezzlement, and that his investigation was not focused on that issue. The subpoena issued Monday changed the tone of the investigation and put a new emphasis on the embezzlement issue.

"Current high-ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on Oct. 17, 2008, by Bertha Lewis and Liz Wolf that an internal review had determined that the amount embezzled was $5 million, " the new subpoena says.

The subpoena says, "It is still unclear if some of the monies embezzled are from state, federal or private funds."

The subpoena requests documents from Citizens Consulting Inc., a financial arm of ACORN, and from various accounting and legal consultants in New Orleans. Investigators are trying to verify the issues raised in the subpoena.

"We're going to follow the evidence where it leads us and try to do the right thing," said David Caldwell, head of the attorney general's public corruption and special prosecutions divisions. "We are actively investigating the case, whatever the outcome might be. This is something we are devoting our full attention to."

Wade Rathke, who was in Bangkok, Thailand, on Monday, referred questions to ACORN officials. Lewis said she would comment further after she and ACORN attorneys had a chance to review the subpoena.

ACORN board member Vanessa Gueringer, chairwoman of the Lower 9th Ward Chapter, said she had not seen the subpoena but that the accusation about the larger embezzlement was untrue.

"I believe it is another lie, another witch hunt, " Gueringer said.

ACORN, which provides counseling on housing and other assistance to low and moderate income families, has been reeling from national negative publicity in recent weeks. Actions have been taken on the federal level and by many states, including Louisiana, to end public contracts with the group.



http://www.nola.com/politics/index.ssf/ ... milli.html

What a crew of corruption, the levels of evil know no bounds.

ACORN CEO Says She's 'Cleaning Out' Embattled Organization
In a speech to the National Press Club, ACORN CEO Bertha Lewis called embezzlement allegations "completely false" and defended the group's management and mission.

FOXNews.com

Tuesday, October 06, 2009

Embattled ACORN CEO Bertha Lewis, acknowledging "we know we have some work to do," said Tuesday she is "cleaning out" her organization, even as she defended it against accusations of corruption, incompetence and widespread illegal activity.

Lewis spoke one day after an internal review by ACORN's board of directors found that $5 million was embezzled from the organization by the brother of the group's founder, far more than the previously reported amount of $1 million, according to documents released Monday.

In her speech to the National Press Club in Washington, Lewis, who called the embezzlement allegation "completely false," defended the 38-year-old group's management and mission and vowed that ACORN has taken every step to prevent further problems.

"I was cleaning out, and am cleaning out, all the vestiges of the old administration," Lewis said.

She began her remarks by referring to a series of videos that showed ACORN employees in several cities offering advice to a fake pimp and prostitute, joking that many now knew her organization as the "international brothel network."

"We know that we have work to do. Some of the actions that you all caught on the video, it made my stomach turn over. It just made you sick," Lewis said, admitting that the videotape scandal hit her "like a ton of bricks."

"Those actions are indefensible, and we have to change them. So, in a way we've aided and abetted our attackers. But we take the need for self-evaluation very seriously," she said.

Lewis outlined ACORN's long history of "fighting for people who don't have a voice."

"I believe in what I call 'bureaucrats for social justice,'" she said. "It doesn't seem glamorous like other community organizing, but when you organize poor people, they deserve just as much professionalism, the best employees, the best staff, as any other group.

"I wiped out and changed the whole management structure. I brought in professionals from legal to auditing."

She touted the group's work on low-income housing, funding for education, and fighting for better wages.

"Every day, we were helping working families not only to stay in their homes ... but also lifting, don't move, improve. Fight for your neighborhoods....

"We have built solidly rooted and powerful community organizations," Lewis said.

"If these accomplishments make me the biggest threat to democracy in America, maybe I need to check the definition of democracy."

Lewis vowed that ACORN has learned from its recent difficulties and has taken steps to address them.

"What did we do? We immediately went out, we immediately hired outside professionals. We needed to make sure that we were addressing the root of this problem and that it would never happen again."

The revelation that $5 million had been embezzled from ACORN was reported in a subpoena from the investigation by Louisiana Attorney General Buddy Caldwell, The New Orleans Times-Picayune reported. It is unclear if the money was taken from state, federal or private funds, according to the subpoena.

Caldwell issued subpoenas in August seeking documents related to ACORN's then-President Wade Rathke and his brother, Dale Rathke, who kept the group's books. Those subpoenas targeted possible violations of state employee tax law, obstruction of justice and violations of the Employee Retirement Security Act.

The attorney general made inquiries in June into alleged embezzlement within ACORN that happened 10 years ago. The group last year dealt with an internal dispute and a lawsuit involving accusations that Dale Rathke made nearly $1 million in improper credit card charges in 1999 and 2000. Rathke's brother and a donor repaid the money.

But Caldwell said last month that the statute of limitations prevented prosecutors from taking action on the alleged embezzlement, and that his investigation was not focused on that issue.

The subpoena issued Monday puts a new emphasis on the embezzlement issue. It appears to be in reaction to documents gathered from ACORN's board as a result of the subpoenas issued in August.

"Current high ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on Oct. 17, 2008, by Bertha Lewis and Liz Wolf that an internal review had determined that the amount embezzled was $5 million," the new subpoena says.

The subpoena requests documents from Citizens Consulting Inc., which assisted ACORN, and from various accounting and legal consultants in New Orleans.

Wade Rathke could not be reached immediately for comment.

The Associated Press contributed to this report.

http://www.foxnews.com/politics/2009/10 ... ress-club/