Whistleblowers Seek to Reform ACORN

New Orleans, Louisiana – October 17, 2008. This historic election season likely marks the end of ACORN's uncanny ability to be both prominent and relatively obscure. ACORN, the Association of Community Organizations for Reform Now, is the nation's largest community organization of low- and moderate-income families, working together for social justice and stronger communities. Since 1970, ACORN has grown to more than 400,000 member families, organized in 1,200 neighborhood chapters in 103 cities across the U.S. and in cities in Canada, Mexico, the Dominican Republic, Argentina, India and Peru.

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For many, the group is synonymous with community organizing. Which is why so many Republicans among others, may relish ACORN writhing in the media spotlight. Senator John McCain is using recent controversy at ACORN to impugn Senator Barack Obama.  However, GOP backed organizations have also been accused of voter fraud by switching individual party identification on voter registration cards.

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Recent events seek to quash intra-corporate disputes when ACORN faces unprecedented upheaval, arguably from outside forces. Courageous whistleblowers Karen Inman and Marcel Reid continue the fight they began for transparency and accountability within ACORN. But recent actions by ACORN are cautionary tales about inter-corporate relationships, and management and control of non-profit corporations. And the breach of fiduciary duties and trust following a $1 million embezzlement dating back to 1999.

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The Rathke Embezzlement

 The embezzlement was originally concealed from the full Association Board, after which fellow ACORN board members elected Karen Inman and Marcel Reid to an interim management committee (IMC) to investigate the fraud after firing Wade Rathke, their founder and Chief Organizer. According to board minutes, Wade's termination followed news that he concealed for nearly a decade, an almost one million dollar embezzlement from ACORN during the years 1999 to 2000, allegedly by his brother Dale Rathke.

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KAPFCU Federal Credit Union a certified community development financial institution joined Inman and Reid in overseeing a team of professionals to identify, preserve, account for, and otherwise protect ACORN assets and interests.  The team includes attorneys who secured a temporary restraining order and are seeking additional injunctive relief for ACORN, the IMC, and eight board members dubbed the "ACORN Eight". Following these terminations, the ACORN board voted unanimously "that funds be created to allow (Inman and Reid) access to professional consultants . . . so that the will of the Association Board be carried out." 

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The IMC initially filed a TRO to preserve the financial books and records, and safe guard ACORN assets. Their case is ACORN vs. Rathke, et al., no. 08-8342, before the Civil District Court for the Parish of Orleans, State of Louisiana. Yet various ACORN staff and board members disparage what the ACORN Eight has done.  "These dissenters claim the underlying petition was not properly authorized or in ACORN's best interests and should be withdrawn" says Inman.

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Two weeks ago, Louisiana District Court Judge Michael Bagneris ruled in the referenced ACORN vs. Rathke, et al., case no. 08-8342, that ACORN and its affiliated organizations shall not destroy ACORN corporate books and records.  He refused to dismiss the IMC's petition for ACORN.  Instead Bagneris instructed ACORN directors to settle on who are its authorized representatives at its National board of directors meeting in New Orleans. 

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