ACORN's Past Due Taxes

ACORN doesn't like it when large and powerful organizations don't pay their taxes. Why just two months ago, the group picketed the Philadelphia Eagles over this very issue.

THERE'S NOTHING like a good old-fashioned tailgate party during the offseason. In Wynnewood.

About 50 people passed around grilled hot dogs - chanting "Pay, Eagles, Pay" to the tune of the team's fight song - in front of team owner Jeffrey Lurie's Llanfair Road mansion yesterday to urge him to fork over the millions of dollars that the team owes the city.

Before leaving, participants propped up against Lurie's padlocked fence a large "Past Due" notice for $8 million, which cops later took down.

ACORN, an advocate for low-income families, set up camp there in an effort to retrieve the money to help keep city health centers open. Closing up to three health centers is among the options to help plug a massive gap in the budget.

It's all the more ironic that in October of 2007, the group's then CEO Wade Rathke announced to the board of directors that ACORN had a significant tax issue. The tax issue turned out to be a past due tax bill around $1.5 million in federal taxes and $500,000 in state taxes to various states, including Pennslyvania and Texas. Of course, at the time, Wade Rathke didn't let the board know just exactly how much was owed. Instead, Rathke pleaded with the board to authorize an emergency increase in dues from state chapters of an extra 1.5% to take care of the issue. Rathke had kept this issue quiet and by the time he spoke to the board, the situation was so dire that the board had no choice but to approve the measure. At the time, Rathke put much of the blame for the taxes being past due on Katrina, which happened more than two years previous. Katrina had destroyed much of New Orleans and with it much of the tax and accounting records of CCI.

It wasn't until July of 2008 that board members found out just how much was owed when Liz Wolfe, the group's Research Director, informed the board just exactly how much was owed and to whom.

The details of the tax delinquency would also never have been known had several enterprising board members, now part of a group known as the ACORN 8, had a chance to speak with then Citizen's Consulting Incorporated Comptroller Mike Jones. Jones told these insiders that starting sometime around 2004 ACORN's employees had their regular deductions taken out of their paychecks for federal taxes, FICA, state taxes, etc. only the money was then pocketed by the folks at ACORN and never paid to the appropriate parties. Jones then pronounced

we are no longer doing that anymore

Jones had only been the Comptroller of Citizen's Consulting Incorporated (CCI) for about a year at the moment he shared this information with these enterprising board members. Within a year, Jones was summarily removed from the ACORN universe. Within months, several members of the ACORN board, including Marcel Reid and Karen Inman, who were investigating all these alleged crimes were also removed from their board positions and they eventually formed the aforementioned ACORN 8.

As I have mentioned on several occasions previously, CCI is a financial services and accounting firm that does accounting and financial services work for only one client. That client is ACORN. Of course, when I say ACORN, I really mean the collection of several hundred affiliate organizations like ACORN housing, Project Vote, Health Care for America Now, and ACORN Community Labor Organization Center (ACLOC)among many others less well known groups. As the financial services and accounting firm for all these groups, CCI is responsible for among other things cutting checks to all ACORN employees and employees of each of these several hundred affiliates. CCI is also the place where all funds donated, granted, or given to ACORN, and it's affiliates, be it from the government or like minded philanthropies, starts, and the CCI acts as a financial weigh station for the rest of the organization. Finally, because CCI is a private concern, no one outside a small circle has ever managed to see inside their financial records. Well for several years presumably, CCI was then taking the proper tax withdrawals out of the several thousand such employee's checks but not then forwarding it to the proper government agency.

The timeline here is very important. As I, along with many other media, have reported, starting sometime around 1999, Dale Rathke, brother of the aforementioned Wade Rathke, began embezzling what amounted to about a million dollars from the same aforementioned CCI. At the time of the embezzlement, Dale Rathke was head of CCI. When the embezzlement was discovered, Wade Rathke decided to tell a small group of his immediate lieutenants known as the management council about the crime. This group decided to keep the embezzlement quiet. The embezzlement was repaid as a loan back to ACORN. Rathke was removed from running CCI though he continued with the group in some capacity.

So then, we should all start to notice a pattern. A crime is committed at the mysterious Citizen's Consulting Inc. It is covered up and both the Rathke brothers seem to always be near or involved with said crime.

By June of 2008, Wade Rathke was removed from CEO of ACORN, a position he had held for decades. The reason for the removal had to do with his role in covering up the embezzlement. His role in covering up the tax fraud wasn't mentioned in his removal at all. In fact, most of the details related to the past due taxes didn't surface until Rathke had been terminated. Wade Rathke does however remain CEO of ACORN International, a television affiliate of ACORN, as well as head of the SEIU down in New Orleans. At least one former insider told me they aren't sure that he doesn't still maintains much of the same power base he once did. Dale Rathke has since been removed from any official connection to ACORN resulting from the discovery of his embezzlement.

The firm in charge of auditing CCI at the time of both the embezzlement and the alleged tax fraud is Duplantier, Hrapmann, Hogan and Maher, L.L.P. In fact, as of their dismissal in November of 2008, ACORN 8 believes DHHM LLP. were still hired by ACORN in the same capacity.

Finally, throughout this whole process, CCI maintained only one board member, Mildred Brown. Ms. Brown is described as a nice lady near 70. She has also been involved with ACORN for most of her adult life. One insider used the term "true believer" in describing Brown. Brown also lives and works in the Washington D.C. area. CCI is located in New Orleans, La. The insider described Brown as the perfect board member if crime is to be committed because she believes so purely in the cause that she would never even think to investigate any wrong doing. Being located in the D.C. area also means she spent little time where CCI is located. As such, she would have been the perfect person to make up the board, a mandate, if crimes were to be committed by CCI.

As of November of 2008 when some members of the ACORN board were removed, the taxes had still not fully been paid back, though that may have changed since.