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Monday, July 21, 2008
By Aaron Dorfman
A couple of weeks ago, the New York Times revealed in a piece by Stephanie Strom that the Association of Community Organizations for Reform Now (ACORN) kept secret for eight years the embezzlement of nearly $1 million .The embezzler was Dale Rathke, the brother of ACORN founder Wade Rathke.
As an outrageous breach of the public’s trust, ACORN’s case is a textbook example of horrendously weak governance combined with extremely poor judgment. While the National Committee for Responsive Philanthropy (NCRP) serves primarily as a watchdog of foundations and other grantmaking institutions (not of all nonprofits), this case is certainly worthy of comment due to the scope of the issues involved.
In the interest of full disclosure, I should point out that ACORN is a member of NCRP, that I worked for the organization from 1992 to 1997, that a senior ACORN executive served previously on NCRP’s Board of Directors, and that current NCRP board members are executives with foundations that fund extensively ACORN and its affiliates. Additionally, NCRP is currently working on new research that documents the positive impact of policy advocacy, community organizing, and civic engagement, and ACORN’s work will be included in that research.
Despite these connections between ACORN and NCRP, it is important to stress that no organization should be arrogantly allowed to take the public’s trust for granted.
ACORN’s first mistake in weak governance and poor judgment came in allowing the brother of the organization’s founder to be in charge of finances for so many years. What were they thinking? The board should never have allowed that kind of arrangement to go on for so long. Nepotism never serves nonprofits well. In spite of the fact that dozens of staff members regularly objected to the arrangement, Wade Rathke insisted on keeping his brother running the finances for decades and the board never forced him to do otherwise.
The second mistake, related to the first, was the board’s consistent failure to exercise its fiduciary responsibility and engage in sufficiently rigorous oversight. From my understanding, the board did not have an audit committee and the auditors were answering to Wade Rathke, not to the organization’s board. This is absolutely inexcusable for a nonprofit whose annual budget, when combined with its affiliate organizations, was more than $40 million in 2000.
Once the theft was uncovered, there were several acts that were clearly unethical and just plain boneheaded. First, the auditors followed Wade’s instruction to record the theft as a “loan,” which may make them criminally negligent in this matter. The staff who allowed Wade to keep the matter a secret bears a significant amount of blame too. These are people who show a tremendous amount of backbone everyday in their campaigns against injustice but who lacked spinal fortitude at precisely the moment when it was needed the most to protect the long-term interests of their organization and its constituency. As difficult as it would have been to stand up to the organization’s founder, they should have insisted on full transparency and accountability eight years ago.
While Wade’s argument for protecting the organization from those that would like to harm it has some merit, no organization should think it can operate outside of the basic principles of integrity and transparency. Every time a nonprofit is involved in this kind of wrongdoing, it hurts the entire sector; we cannot take the public’s trust for granted.
ACORN’s funders have made it clear they are willing to continue supporting the organization if ACORN overhauls its management and governance structures. In fact, some funders were pushing ACORN to address these internal issues long before news of the embezzlement leaked. While a foundation should not be in the business of telling nonprofits how to run their organization, it’s proper and necessary for funders to push the issue when basic accountability and governance are lacking.
ACORN does some fantastic work locally and nationally. [For a full description of that work, along with some insightful analysis of the current crisis, please read Peter Dreier’s recent piece in the Huffington Post.] But the fact that they do some great work doesn’t excuse how they handled this situation. All nonprofits need to function with the highest standards of integrity. To their credit, ACORN’s board acted quickly and decisively in removing both Rathkes from their posts once the story became known to them. Additionally, Bertha Lewis has now been named interim chief organizer and seems absolutely dedicated to fixing the underlying governance issues, not just in glossing over the public relations nightmare it has caused.
Out of this crisis comes an opportunity for ACORN to improve its operations. If they get it right, I expect that the organization will thrive in the coming years, that donors will maintain or increase their support of ACORN and its affiliates, and that the public will benefit as a result. If they don’t take this opportunity to improve their operations, I expect that their fundraising will suffer. Other nonprofits should use this case to examine their own commitment to accountability and transparency. Proper governance goes a long way to preventing abuses in our sector.
Aaron Dorfman is the executive director of the National Committee for Responsive Philanthropy (NCRP).
Labels: accountability, Best Practices, transparency
posted by NCRP at 10:54 AM 
1 Comments:
Thank you your insightful and in my opinion rather calm analysis of the situation at ACORN.
I am a former Head Organizer of ACORN. I have some thoughts I would like to share on these matters. The main thrust of my point here is that ACORN unfortunately and according to people on the inside, cannot get rid of Rathke and feel as if they are merely rearranging the deckchairs on the titanic. The Captian moved to another seat but he is still on deck. Let me flush this out a little bit.
The basic premise is this, Wade is now head of World ACORN! A promotion. He keeps his office at Elysian Fields and the only person who is probably really gone is Dale. The staff who went along with the coverup are still (most) there. The way this went down how do we know Wade and Dale did not conspire to steal the money? Why aren’t they being indicted? Most importantly, Wade Rathke’s organizing from Chief Organizer down to the members instead of the other way around must also be addressed or ACORN’s habitual systems will lend themselves to the same conclusion.
Wade is not letting go of ACORN in the least. This is a lie and everyone at ACORN knows it. In fact, they are at a loss for what to do about it. Lets get some facts out before I continue.
A part of this story many may have missed is so crucial.
1) Rathke is staying in ACORN as Chief Organizer of “ACORN International” his contact info from ACORN International’s website?
Contact Wade Rathke
Wade Rathke
1024 Elysian Fields Avenue
New Orleans, Louisiana 70117
(504) 943-0044
Now hope you will see what I see here:
Notice anything interesting about this?
SEIU 100 in New Orleans
1024 Elysian Fields Ave.
New Orleans, LA 70117
504-872-0480 ext 118
504-617-6045 FAX
Now here is the address for Citizens Consulting Inc: This was Dale’s for profit accounting and lobbying firm
1024 Elysian Fields Ave
New Orleans, LA , 70117-8402
Now Here is the address of ACORN National in New Orelans (Wade’s offie)
ACORN National Louisiana
1024 Elysian Fields Ave.
New Orleans, LA 70117
chieforg@acorn.org
Phone: 504-943-0044
ACORN Housing Corp
1024 Elysian Fields Ave.
New Orleans, LA 70117
Phone: (504) 301-3112
Fax: (504) 218-7176
And his ACORN international office is in the same building.
Now the office ACORN members report to in New Orleans have as a resource is craftily at another site.
Still feel the winds of change blowing through ACORN?
It is fascinating to watch the transition. Wade started organizing a seperate entity with a seperate board with him as Chief Organizer shortly after people in ACORN (staff) became aware of the embezzlement. What a coincidence? Wow, wonder how hard it would be to extradite him from Argentina or India on embezzlement charges?
ACORN International is in place and Wade hasn’t missed a beat and he talked one of his rich friends into donating the 800,000 that hasn’t been paid by Dale. So heck they can split the 800 grand and walk around like they own the joint?
So International ACORN is not part of ACORN? It is part of the ACORN famly but seperated by Wade’s maze of legal firewalls.
Just as the American Institue FOr Justice and the ACORN Institute are seperate from ACORN but it is an intrinsic part of ACORN’s funding and structure giving them 501c3 coverage.
Where did the start up capital come from?
We know where it came from.
ACORN International reports at Head Organzer and Management meetings.
They come the Year Year Beginning yealry meetings.
Why is that if they are a seperate Organization?
Now this is a website I just went and what do you call this?
http://www.acorn.org/index.php?id=2683
Now on this Acorn.org website I found this?
International Offices
ACORN International is building community organizations of low-income families, and partnering with grassroots organizations outside of the United States. ACORN International aims to strengthen democratic movements for social change, as well as build connections between community-based organizations across borders and cultures.
ACORN International has offices in Argentina, Canada, Peru, and Mexico, and facilitates the India FDI Watch Campaign. We are establishing direct membership chapters in the Dominican Republic, Ecuador, Kenya, and Nigeria and are exploring partnerships with established membership-based organizations in Indonesia, the Philippines, and South Korea.
> ACORN Argentina
> ACORN Peru
> ACORN Dominican Republic
> ACORN Canada
> ACORN Mexico
Now what is that? I searched the site and found that.
Now when I go to this site, the offices link? I find this
http://www.acorn.org/index.php?id=2593
Now on this site the US offices, the national, and the international! I don’t know if you know it or not but that is pissing alot of people off. Especially since this is linked as well:
So Sorry, we ACORNISTAS aren’t buying it. Also why am I able to reach Wade’s Chief Organizer page form the ACORN page?
Either he is gone or not. If ACORN is a out control freight train that has already left the station. Then USA ACORN will sue them for all resources drained from our members and will demand they change their name!
Wade’s dream of a Walmart of Organizing is coming true on our sweat and dimes. Whether the members and staff like it or not.
A very important read on ACORN will give us much insight into the problems at ACORN now. Gary Delgado’s “Organizing the Movement The Roots and Growth of ACORN”
Delgado spent 14 years from the beginning with ACORN. The analysis then was the same today.
His analysis that ACORN was structured so that an elite group of white folks would be the only people that could manage ACORN and that they acted upon Rathke’s and not the member’s orders meant that ACORN would be a toip down operation.
As a person of color. A former ACORN staff member, and as a radical, and in light recent revelations of Wade Rathke’s coverup of the theft of 1,000,000USD I just gotta say amen. Wade doesn’t allow dissent within ACORN. DelGado, a founding organizer pushed out by Rathke detailed almost 30 years ago that ACORN had an all white management staff. Until Wade was pushed out of Chief Organizer USA by the board this month? Now Bertha Lewis is heading up the management team to clean up the mess?
Wade pushes her under the bus and into the drivers seat as it is teetering on the edge of a cliff? I have not published my real name and I hope you can appreciate why. I am just a lowly organizer who can be easily smashed by Wade’s long arms in the Democratic party.
The kicker for me is that in light of Wade’s racism towards CLU (Great Article about this http://hungryblues.net/2005/10/23/white-labor-leader-wade-rathke-attacks-black-led-cluphf/ ), the embezzlement of 1,000,00 and in my opinion more importantly the horrible treatment of ACORN staff who were from the working class? The 1,000,000 is a gnat in the eye. He is getting promoted to Chief Organizer of ACORN International? Chief Organizer of the World? Are people in LA and ACORN USA going to stomach that?
I remember once at a staff of color caucus there were maybe 150 of us in a room. Bertha Lewis asked all staff who had been there over 5 years to stand. Only two people were standing. Then she asked everyone there over two years to stand and literally like 10 stood up. They then asked everyone over a year to stand and maybe 20 stood. The other 115 stood. I remember the resistance the management staff had to us even having a staff of color caucus and remember hovering outside the door nonchalantly. We all resolved to call Wade and others out on several issues. Wade never even acknowledged our resolve.
There are good people at ACORN. Unfortunately they are overshadowed by things like office riots when people who haven’t been paid in over a month from poor communities explode. They are overshadowed by staff directives that do not allow for true community organizing. The way it is set up working class staff can’t hang with the 60 to 100 hour weeks, the low mileage stipend, the ridiculous fund raising goals set etc..
If you have a kid? And you weren’t born from money you can forget about working for ACORN (unless you are upper level management). The Democratic party and Unions are helping to feed this beast. The outsourcing to ACORN for management of low wage campaign workers at 7-8 bucks an hour to do VR and GOTV with no minimum standards so that workers don't get paid the Living Wage ACORN has us out fighting for? This just feeds the beast. PIRG is doing it, Move on does it and so do others. The only people who survive between campaigns are North East liberals from often times Ivy League or private liberal colleges that are using ACORN as a resume stuffer in their climb up the ladder to be an Exec Dir or Dem party operative. What about all those people from black, Latino and other communities of color that really could have excelled at ACORN had they been paid a living wage.
When I read the letter circulated about Community Labor Union by Wade Ratke shortly after the unrest that was a result of CLU organized actions in New Orleans by people of color. When I saw that Wade said “these people couldn’t organize a two car funeral”? HE compared them to the CIA mole Chalabi who falsely claimed to represent the Iraqi people (are we a little over the top Wade?). I couldn’t believe the white chauvinism that dripped from this hypocrite. DelGado has it right. A change has to come about in community organizing. Where people form directly affected communities control the work. It has to happen. This was the Ratke I knew, brow beating, condescending, demeaning, and yes racist. As if he deserved to talk to organizers of color (who had comparable experience) in the way that he did simply because he helped some black folks. Or becuase he had read some Alinsky. There was no excuse for the way he treated his staf.
Working for ACORN and watching some of the white folks in the field made me feel like we were putting poor communities in a skinner box to see how they would react if we gave this toy or that stimulus etc.. Or worse like some zoologist trying to get close to a lion or monkey in the jungle and acting proud if they were able to sit and eat with the animals. I am serious that is how it felt.
I hope the people of New Orleans LA and ACORN USA take this opportunity to force ACORN to reverse the methods, tactics, and employment policies of ACORN. Save that other 115 organizers out there from souring on organizing for ever.
Also, SEIU you need to tell ACORN they have to pay a living wage or they can’t do SEIU work. Yes SEIU outsourced work to us often, if the Dems, SEIU, or any other progressive group is going to outsource any of their work to anyone. This business of not getting a contract that ensures the workers will be treated fairly has to stop. I have video I have never released of employees rioting in offices who were not paid for over a month. How embarrassing for them, for me, for the movement.
When I found out about the million? I wasn’t even one bit surprised. I have personally seen that much money thrown out the window on nothing in a week at ACORN. By the way, if you leave ACORN the standard line is “F—k them, they left”, you have to secretly leave. It is like a cult. If you do good you can’t get a reference, your supervisor will hint that you are a problem worker. I know it. It is hard to re-enter the field of organizing because you are burned out and you are white listed by ACORN.
The real problem now is changing the systems Wade put in place that allow for disempowerment of members, a failure to build minority leadership, and for he and his brother to steal from the people.
www.therealacorn.blogspot.com