VADUM: Is ACORN cracked?

Internal power struggles and lawsuits

By Matthew Vadum

Originally published 05:45 a.m., November 4, 2008, updated 10:18 p.m., November 3, 2008

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OP-ED:

Massive electoral fraud - allegedly purchased with cash, cigarettes and narcotics - is just one of ACORN's problems.

When the nation's leading community-based left-wing activist group isn't staging sit-ins to pressure banks to make home loans to risky borrowers, busing schoolchildren to the nation's capital to protest proposed tax cuts, campaigning for big government policies, or raising the dead from battleground-state cemeteries and leading them to the voting booth, it is at war with itself.

That's because there's a power vacuum in the ACORN empire after its national board fired founder Wade Rathke this summer for covering up his brother's embezzlement of $949,000 for eight years. For the first time ever, ACORN leaders shied away from letting the government intervene in an issue and embraced the libertarian approach to dispute resolution. The Rathke family signed a restitution agreement with ACORN, promising to repay the amount over time.

Meanwhile, ACORN's national board steadfastly refuses to provide financial documents demanded by its eight board members. The board recently voted to kill a lawsuit filed by the dissident directors in ACORN's name that sought access to the group's well-hidden financial records.

But the fact that ACORN essentially sued itself underlines the complex, confusing web of relationships in the ACORN network. The absence of Mr. Rathke, who apparently designed ACORN's mind-bogglingly complex system of interlocking directorates and encouraged unusual 7-figure intra-network financial transfers to help exert control over the whole network, must be taking its toll on the group.

ACORN lawyer Elizabeth Kingsley raised the alarm about those interlocking directorates and the close ties between ACORN and the ostensibly separate Project Vote in an internal report, the New York Times reported. There is so much overlap that "we may not be able to prove that 501(c)3 resources are not being directed to specific regions based on impermissible partisan considerations," she wrote in a reference to the tax code provision regulating charities.

And in the founder's absence, Bertha Lewis, who succeeded Mr. Rathke as chief organizer, risked running afoul of laws when she urged the audience in an Oct. 22 YouTube video to "vote for the community organizer Barack Obama." Risking a vindictive audit and a review of its network's tax-exempt status by the incoming administration, ACORN must be pretty sure its former Project Vote organizer is going to win the White House.

Speaking of tax-related matters, ACORN, which has taken in at least $126.4 million in donations and tax dollars since 1993, can't - or won't - be bothered to pay its taxes. The network of 100-plus affiliates is littered with cheerleaders for higher taxes, yet it owes at least $3 million in federal, state, and local taxes stretching back to 1993.

Tax officials say they're not allowed to disclose which taxes are owed, but accounting experts say they're probably payroll taxes. This means ACORN, while aggressively advocating social and wealth-redistribution programs, has been undermining those programs by stiffing Uncle Sam, states, and cities.

Then there are the growing demands for ACORN to be investigated under the Racketeer Influenced and Corrupt Organizations Act (RICO) for the repeated incidents of electoral fraud. The Ohio-based Buckeye Institute isn't waiting for the feds to act. It filed a state racketeering lawsuit, arguing ACORN has engaged in a pattern of corrupt activity that amounts to organized crime.

The suit also alleges that ACORN's voter-mobilization arm, Project Vote, "regularly advises Ohio Secretary of State Jennifer Brunner on election strategy, even recently issuing a news release that claims credit for Mrs. Brunner's directive restricting challenges to suspected fraudulent voter registrations." Mrs. Brunner, a Democrat, has declined to enforce the provisions of the Help America Vote Act that requires her to use a database to allow the verification of 600,000-plus registrations from new Ohio voters. Mrs.Brunner admits there are "discrepancies" on about 200,000 of the new registrations, but won't give local election officials the registration data they need to verify the validity of the registrations.

All of this is a recipe for disaster, but that's exactly the way Mrs. Brunner's allies at ACORN like it.

Matthew Vadum is a senior editor at Capital Research Center.

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