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Thursday, July 23, 2009

The Issa ACORN Report: A Full Analysis

A reading of the Committee on Oversight and Government Reform report on ACORN leaves only one conclusion, ACORN is a criminal enterprise. In fact, the only doubt, according to the committee, that ACORN is not RICO was a debate late in the report whether it is technically an organization. The evidence gathered by the committee is damning. The committee quoted several news sources, "insiders", Marcel Reid, Karen Inman, Anita Moncrief, and the law firm of Harman, Curran, Spielberg, and Eisenberg. HCSE was retained by ACORN as outside legal counsel. Ironically enough, a lot of the most damning evidence came from investigations that HCSE did and the conclusions they published.

It's both amazing and shocking just how much criminality grew out of the embezzlement perpetrated by Dale Rathke. Dale Rathke, again, is the brother of long time ACORN CEO Wade Rathke. The embezzlement itself, which occurred between 1999-2000, was of course criminal. The criminality only began there. The committee referenced an email that I have also published in pointing out that eight individuals were made aware of the embezzlement, Steve Kest, Jon Kest, Madeline Talbott, Keith Kelleher, Mike Shea, Zach Polett, Helene O’Brien, Amy Schur, Liz Wolff, and Beth Butler. All swore to keep it quiet and had things worked out no one would have known about the embezzlement. All are the top eight people currently in ACORN. (make no mistake Bertha Lewis, the current CEO, is a figurehead and mouthpiece)

By keeping the embezzlement quiet, ACORN then violated other tax laws. ACORN is a tax exempt organization. As such, ACORN is mandated by law to report violations like embezzlement. By keeping it quiet, they violated laws that governed their tax code. The criminality only started there. ACORN also violated, according to the report, ERISA (Employment Retirement Income Act) laws. They did this by moving money out of multiple pension funds to cover shortfalls created by the embezzlement itself. The cover up of the embezzlement also violated the fiduciary responsibility that ACORN has a corporate entity.

The committee also referenced these violations of the law: voter registration fraud, tax fraud, embezzlement, and misuse of tax payer funds. The voter registration fraud has been well publicized. ACORN gets paid by the government and non profits to register new voters to vote. On a systemic basis, ACORN signs up non existent voters. The committee pointed out that this had to do with low base pay combined with pressures of quotas, lax oversight that lead to the hiring of criminals, and poor managerial control.

About half the report was used to detail the manner in which ACORN comingles funds and misuses tax funds. In the report, ACORN claims that CCI (Citizens Consulting Inc.) is a separate entity and that ACORN is merely a client and partner. The committee wasn't buying this characterization. CCI was run for a long time by Dale Rathke, admitted embezzler and brother of Wade Rathke. Furthermore, CCI board members are members of the board of ACORN and its affiliates. The committee found nearly two hundred bank accounts at one bank all controlled by CCI. These bank accounts were tied to ACORN and many of its nearly 400 affiliates. These affiliates are of all stripes in terms of tax codes. As such, some are non profit and others are for profit. By having all their money controlled by one entity. This creates a lack of transparency, and it's impossible, according to the findings of HCSE, to know that funds aren't being comingled between 501 (C)3's and 501 (C)4's.

The misuse of funds only begin there. Former Project Vote employee, Anita Moncrief, said that when she worked there that ACORN and Project Vote shared an office and that employees routinely did work for both organizations at once. This is important because Project Vote's tax status means they must be non partisan. This clear rule wasn't merely violated but trampled. Zach Pollett, ACORN's political director, is also the executive director of Project Vote. In other words, the same person that was in charge of ACORN's political activities is the main person in charge of the group that is supposed to avoid partisan political activities. Numerous memos and emails were cited in which Pollett referenced Project Vote as part of an overall political strategy.

Furthermore, ACORN shared their email lists with the campaigns of John Kerry, Hillary Clinton and Barack Obama.

The conclusion of the report is much like the conclusion of ACORN 8 spokesperson Michael McCray.

Thus, no one really knows how much ACORN is actually worth and how much non-profit –vs– for profit funding has flown through ACORN unless and until there is a forensic examination and independent audit. We know that all funding flowed through Citizen’s Consulting Inc. (CCI). But CCI claims to be a private company – but it is really the financial management division of ACORN.Ultimately, their must be a forensic examination and audit of ACORN. Otherwise know one will ever know for sure how much went into ACORN, how much money was co-mingled at ACORN or how much money was embezzled from ACORN. It’s just that simple.

ACORN Housing Corp. gets about 40% of its funding from the federal government. ACORN Housing Inc. is one of the most powerful units of ACORN. That's what we're dealing with. On the one hand, we have an organization that receives tens of millions yearly in federal funds. On the other hand, it routinely commits and covers up millions in crimes. It has created a structure that makes tracking money nearly impossible. It routinely comingles funds between units of differing tax structures. Finally, it routinely uses funds for activities they were NOT intended for, including tax dollars.

As such, the only way to know for sure just what is going on is through a thorough Congressional investigation that includes a thorough forensic audit. That's what Michael McCray and ACORN 8 have called for, and it's now what Darrell Issa and his committee have called for. Now, it's time for the public at large to demand the same.

Here is analysis of the second and third ACORN/Issa Report.


xformed said...

And the sad part is, the President of the United States of America is proud of his community organizing with this organization.

zach bender said...

it's a minority report