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Monday, October 26, 2009

My Interview With Wade Rathke

People that know him, and know him well, have described him as an "organic genius" and a "diabolical genius". He's become a lightning rod and a polarizing figure, and he's at the center of a national debate. Wade Rathke is the former long time CEO, or Chief Organizer, of ACORN, the Association for Community Organizations for Reform Now. He's now running Community Organizations International, the former ACORN International. When I emailed Wade Rathke this past Friday, I was surprised that he agreed to an interview. I was even more surprised that he was familiar with my work. Yet, he was willing to give me some time this past afternoon. So, what follows are some of my thoughts following an interview that lasted about an hour.

The campaign that COI is most involved in, or at least featured on their main page, is the campaign to reform global remittance. Global remittance is the process by which ex patriates send money back to family in their home country. For instance, it's been well documented that Mexico's main economic source is actually money sent back home from the USA. According to Rathke, this is an industry that topped $300 billion, and far too many of its players practice predatory lending practices. For instance, Rathke has seen fees up to 20% of the amount to be wired. So, if someone were to send $1000 back home, they would be charged $200 to process this transaction. Rathke stressed that such fees were an "outlier" but fees of 5% are about the norm. In his view, this is far too much, and the poor are being taken advantage of by predatory lending practices in this area. Furthermore, with these rates, it also leads to a black market. That's what's happening. Often people send money home with all sorts of strangers because they're promised that it will get there with no charge.

Furthermore, fees to countries in Africa are often significantly higher than to Mexico and other parts of the world. Rathke told me that he hasn't seen any evidence that it actually costs a Western Union any more to wire money to Africa than it does anywhere else. So, the fees should be the same. Rathke would like to "open a dialogue" with Western Union, Moneygram, as well as several of the largest multi national banks to speak about fees charged for remittance. In fact, Rathke believes that multi national banks like Citigroup could get involved in remittance and not only bring about much needed competition which would bring prices down, but also add another source of income for these banks.

For now, Rathke would merely like to sit at the negotiating table with representatives of Western Union et al. He told me that he didn't have a percentage in mind. He was hoping to get an idea of how much it costs these organizations to process these transactions and then negotiate a "fair rate". One individual I spoke with called Rathke a "master negotiator" and so that's probably a place he'd be comfortable at.

I pointed out that major banks and wire transfer institutions like Western Union aren't likely to sit down at the negotiating table with Wade Rathke just because he asked nicely. I also told him that I believed that he wouldn't give up just because the other side wasn't willing to negotiate when asked nicely. So, how far would he take his protests and how cut throat would he be in dealing with these banks and transfer institutions? I asked if he was willing to picket outside of these places. Rathke laughed and he told me that he didn't think that pickets and protests were "cut throat" and that "if an institution is predatory in their remittance charges you bet we'll let their customers know it". Rathke told me that at this stage COI only wants to represent those folks looking to use remittance services and isn't looking to be a vendor because among other reasons they don't have the infrastructure for such a venture.

COI is also working on a campaign in India to raise the profile of the issue of Wal-Mart's entry into India. In India, internal laws don't allow for retailers from outside the country. So, that bars WalMart from entering the country. Still, Rathke says that it's inevitable that WalMart will find its way into India in the next five to ten years. He said that in their society there are all sorts of unintended consequences with bringing WalMart in. Currently, retail in India is done mostly be street vendors and the equivalent of our mom and pop thrift stores. Having a big box top store come in and swallow up neighborhoods can create all sorts of adverse effects on such a society. As such, COI is campaigning to have the government in India study and plan for WalMart's inevitable entry into their market. Rathke has a long history with Walmart. Several years ago, he campaigned for a living wage and health insurance for Walmart employees. When, in 2006, a Walmart employee was left for dead because they were very sick and without insurance, the publicity that Rathke created from this story caused Walmart to relent and begin to provide health insurance to some employees and they cut their generic prescription prices to $4.

The one impression I got of Rathke is his pleasant demeanor. If the pressure and stress of the controversy surrounding ACORN has gotten to him, he certainly didn't express it outwardly. Several folks told me that to be a good organizer you have to have a pleasant demeanor. I next turned to some questions about ACORN itself and it was at this point that the interview, which was almost exclusively pleasant, became contentious. I asked him what he had learned from his experience at ACORN and how he would try to apply that to COI. He was coy as though he didn't understand what I was asking though I believe he did. He told me the structure of ACORN is different than the structure of COI. ACORN, according to Rathke, was one corporation while COI was a federation. In that, COI is currently in seven different countries. Yet, each country is its own separate entity. Meanwhile, all of ACORN's affiliates, according to Rathke, were all part of the same organization. Yet, I pointed, Rathke was in control of the entire federation.

I said that a cynic would believe that the bank accounts of ACORN Dominican Republic and ACORN Canada (each individual country in COI still uses the ACORN name) would eventually be comingled. Rathke responded that international banking laws would never allow such things. I responded that there were all sorts US laws that were broken by ACORN. At this point, Rathke lost his pleasant demeanor. He told me that ACORN broke NO laws. In his 39 years at the helm, they were audited each and every year and passed each and every time. He told me that I was talking to Wade Rathke and not some right wing ideologue.

There are several points of interest in this exchange. First, if Rathke sits at the top of this "federation", it's still unclear to me how each is separate. Without knowing who controls each bank account, it's still not clear that funds can't be comingled. Second, and much more importantly, ACORN always claimed that affiliates were separate of each other. Here, Rathke told me what many that want ACORN reformed have suggested, if not accused. That's that ACORN and its affiliates aren't separate but all part of the same organization, ACORN itself. What Rathke told me about ACORN's structure is exactly the same as what many critics of ACORN have accused the group of doing.

I also asked him about the firing of Beth Butler. Butler is Rathke's common law wife and she was, until recently, the long time head of Louisiana's branch of ACORN. Rathke thought that it was inexplicable that at this point of turmoil that the hierarchy would fire Butler. The move only added chaos at a time when the organization was already in turmoil. He couldn't explain it, understand it, or in any way see how it helped ACORN. I asked him what he thought of Steve Bradbury taking over for Butler. The back story here is that Bradbury could be considered a protege of Rathke. He certainly taught Bradbury a lot and Rathke had befriended Bradbury and groomed him for years. By taking over for Butler, this could be viewed as a betrayal. I said none of this, and Rathke was diplomatic. He told me that he read in a newspaper that Bradbury said this move was temporary and Rathke was taking him at his word.

Finally, I asked Rathke about his legacy. Did he think about his legacy? "Mike, I've been doing this for forty years, of course I think about my legacy". He believes his legacy still has several chapters left. In that way, he looks forward. At the same time, he told me that no one is a "bigger fan of ACORN" than Rathke and that he's saddened to watch them disintegrate so badly. He certainly understood that this disintegration did no favors to his legacy. Several people told me that much Alinsky has become an adjective and a verb, that one day Rathke would be synonymous with a style of organizing. With no hint of modesty, Rathke agreed.


I didn't ask Wade Rathke about his brother's embezzlement. When things became contentious, I cut it off and moved on. I did this for several reasons. First, I asked Wade Rathke if he had time to talk about his campaign about remittance. I could have blind sided him with all sorts of gotcha questions about his brother and other alleged ACORN misdeeds. I don't think that Rathke would have made any stunning admissions to me and of course, that's not what we agreed on. Last week, I wrote about the firing of Beth Butler and I said that moving forward Wade Rathke is the story. That's the case. What has happened, the embezzlement, the investigations, and the disintegration, is not the story. Wade Rathke is the story, and what he's going to do going forward is the story. All the other things have been hyperanalyzed, and there's nothing I could have added to the discussion.

Wade Rathke is trying to do in the world what he did in the US. That is to grow a community to serve the poor and middle class throughout the world. People from all sides of the philosophical and ideological aisle will fill in the blanks on that statement. Ultimately, that chapter has only begun. It is the story now, and that's why I wanted the interview. What happened in the past isn't nearly as interesting as what Rathke wants to do in the future.

Here is part II of this interview series and part III.


John said...

I have a few points, generalities mostly, i) there was a great article in Foreign Affairs about remittance here: ii) you're lucky to be able to get the facts from the 'horses' mouth iii) I don't think W. Rathke will find the world nearly as accepting and as democratic as the USA.

I think most govt's (there are exceptions) exist to provide enough rights so the citizens don't revolt but not enough to fully empower them. Witness China, or India or all of Africa.

Ymarsakar said...

The past is the blueprint for the future.

Dave Schuler said...

It's a bit out of my area of expertise but I suspect that the fly in the ointment on sending remittances is immigration status. You can't do a bank transfer without ID.

mike volpe said...

I agree. Banks probably do require an id, but let's be fair, most immigrants aren't illegal and so most people can perfectly take advantage of this through a bank.