The Embezzlement of Dale Rathke

Starting sometime in the late 1990's and ending sometime in the early part of this decade, Dale Rathke was involved in embezzling somewhere in the neighborhood of $1 million from the ACORN accounting and financial services arm Citizen Consulting Incorporated. At the time, Dale Rathke was heading up CCI. As I have pointed out, CCI has acted as the weigh station for all financial funds for ACORN and all its affiliates. In other words, any money earmarked for any activity within the ACORN network starts out at CCI.

Now, while Rathke was running this organization, he decided to use some of its own funds for his own purposes. About $300,000 of the million that he embezzled came in the form of lavish uses of his own personal credit card. He would charge up things like expensive personal dinners and trips onto his personal credit card and then write these expenses off as business expenses. Since Rathke was running CCI, it would be he himself signing off on making these expenses business expenses.

Sometime in the early part of this decade, a business manager discovered that something was amiss, and they alerted Dale's brother, Wade Rathke. At the time, Wade Rathke was CEO of ACORN itself, and had been for nearly 30 years. Rather than reporting the embezzlement, Wade Rathke informed a small group of lieutenants. This group included John Kest, who now runs the New York office of ACORN, Zach Polett, the politcal director of ACORN, Maude Hurd, currently the head of its Executive Committee, Helene O'Brien, one of Rathke's top lieutenants in New Orleans, and Bertha Lewis currently the CEO of ACORN (then a top lieutenant of Rathke's), Michael Shea, currently head of ACORN Housing, and Beth Butler, currently Southern Regional Director of ACORN (as well as Wade Rathke's spouse).

Rather than report the embezzlement, Wade Rathke convinced all of his top deputies that covering it up would make the most sense. The embezzlement would be carried as a loan payable back to CCI as well as a couple other ACORN affiliates. Furthermore, Dale, himself, was only responsible for paying back the $300,000 he ran up in credit cards. Wade, along with their parents, would be responsible for paying back the rest. Wade Rathke explained that if the whole story came out that enemies of ACORN would use it to smear the group. So, for the next nearly seven years, this small group of individuals kept this nearly one million dollars in embezzlement quiet. Even most of the Executive Board of ACORN didn't know. Frankly, they wouldn't necessarily have to since technically Dale Rathke had embezzled from CCI and not from ACORN itself.

Meanwhile, Dale Rathke was moved to another ACORN affiliate and was removed from any financial matters. Then sometime in 2008, someone within ACORN leaked word of the embezzlement to a funder of ACORN. A funder, in this case, is a group or individual that gives the group money for any number of activities within the community: voter registration, feeding the homeless, health care, labor activities, etc. Since these funders were giving money for charitable work in the community and NOT so that Dale Rathke could live it up, many became furious.

By June of 2008, Wade Rathke was finally facing the wrath of the Executive Committee. He, along with the group of deputies he told initially, told the board the same thing that Rathke told them initially. It was important to keep this quiet or enemies of ACORN would use it to smear the group. That's why Wade Rathke did what he did he explained. The board was only mildly sympathetic. Dale Rathke was removed from the organization entirely and in June of 2008, Wade Rathke's 38 year tenure as CEO of ACORN ended. He was, however, allowed to remain head of ACORN international, the SEIU in New Orleans, as well as running a media arm of ACORN. The other folks remained in their positions of power: Hurd is now the head of the Executive Committee, Kest now runs the New York office (and two insiders tell me they believe he, along with his brother Steve are the real power behind the whole organization now) Lewis replaced Rathke as CEO, and Pollack continues to run their political operations. Finally, another funder decided to buy the so called paper in order to remove the loan from the books of CCI and all other ACORN affiliates. Beyond this, all of this conveniently came out just after the statute of limitations ended on any said crimes. Finally, the fir that audited CCI, Duplainer, Hrapmann, Hogan and Maher, L.L.P, then would have signed off not only on the credit card uses but ultimately the loans created to cover it up. The same firm continues to audit CCI today.

Meanwhile, a group of 8 board members, now known as the ACORN 8, demanded more. They wanted to see the books of ACORN itself as well as all documents related to the matter from Wade Rathke. In October, they went in front of a judge in order to get permission to see the books. The judge agreed that ANY BOARD MEMBER of ACORN is allowed to see the books by request. So, within weeks, everyone in this group was summarily removed from the board. The group is now fighting their battle from outside of ACORN. Members of the group have appeared on both Glenn Beck and Bill O'Reilly, however their request for transparency within ACORN continues be met with resistence.