National Press Club

ACORN Leader Concedes Scandal, Vows Reform, New Successes

October 7, 2009 | By Andrew Kreig |

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The CEO of the embattled community organizing group ACORN vowed to reform its management in the wake of scandal and funding cutbacks at an Oct. 6 Speakers Committee news conference.

“Nothing will be able to wipe away these 40 years of work, and nothing will be able to stop us from 40 more,” Bertha Lewis said.

ACORN, founded in Little Rock in 1970, claims nearly 500,000 dues-paying members as it advocates for raising the minimum wage, improving banking practices for low-income customers and expanding voter registration.

Lewis, director of the New York office before she succeeded founding CEO Wade Rathke last year, said watching recent hidden-camera videos of ACORN workers who advised a couple posing as a pimp and prostitute “made me sick.”

She gave her take also on a major embezzlement by Rathke’s brother Dale and other controversies that have prompted some government agencies and private foundations to suspend funding of ACORN, which stands for theAssociationof Community Organizations for Reform Now. Dale Rathke embezzled nearly $1 million from ACORN and its affiliates in 1999 and 2000. The Rathkes repaid about $200,000 and an anonymous donor the remainder, according to news reports.

Lewis described as “completely false” other reports that the total embezzlement losses are closer to $5 million than the $948,000 identified by an internal audit.

She described the $5 million figure as likely coming from “two disgruntled former board members” with access to budget proposals calling for an extra $2.5 million to fund for a two-year period what she called “cleaning up the mess” following the Wade Rathke’s mismanagement before his firing.

Many reforms are underway, she said, including installing strong outside auditors and new counsel and financial leadership. Former Massachusetts Attorney Gen. Scott Harshbarger is leading an independent review.

Another matter under investigation involves the tape of ACORN workers advising undercover filmmakers and conservative activists John O’Keefe and Hannah Giles. The video, first broadcast by Fox News, shows ACORN staff in Baltimore, Washington, Brooklyn, San Diego and San Bernardino, with one staffer suggested that the purported visiting prostitute lie about her work in order to obtain assistance to buy a house for use as a brothel.

“Those actions were indefensible,” Lewis commented, “and we have to change.” She noted, however, that some ACORN workers reported the filmmaking pair to authorities as suspicious, and that ACORN is also suing the filmmakers on the grounds of breaking Maryland’s law against surreptitious taping.

A third vulnerability of ACORN she discussed is ongoing allegations by Republicans of voting registration fraud. She said ACORN is itself the victim of the relatively small number of workers “taking advantage of the system.” She said fewer than 100 of ACORN’s nearly 13,000 canvassers last year made up names of registrants to earn $10 an hour, but that ACORN referred suspicious cases to authorities.

She said that voting fraud is a controversy largely fostered by Republicans as a fund-raising tool and to hinder ACORN”s registration efforts.

The latest challenge involves funding. The House, Senate and some governors (primarily Republican) have recently voted to cut off government funding for some or all of relevant projects with ACORN, which has had a $25 million annual budget recently. The group reports that about 10% of its funding has come from federal funds.

Several major foundations have also suspended funding, with Louisiana’s attorney general also reviewing reports that the group and its affiliates are seriously in arrears on taxes and medical payments. A number of other states and federal bodies also have launched investigations of ACORN, its affiliates and, in a few instances, of larger partner organizations.

The scope of the problems after the founder’s firing “hit us like a ton of bricks,” Lewis said. But her handouts include a chart claiming some $15 billion “ACORN victories” for its low-income constituency over the last decade, and she said, “My job was to put together an organization for the 21st century.”