Special Editorial Reports
Tax documents show ACORN link to affiliates
By: Kevin Mooney
Commentary Staff Writer
May 19, 2009
Association of Community Organizers for Reform leaders deny having ties to legions of affiliated state and local organizations, but federal tax documents examined by The Examiner show concrete financial links between four such groups and the national ACORN office.
Project Vote, ACORN Institute, ACORN Housing Corporation and the ACORN American Institute for Social Justice included financial transactions with Citizens Consulting Incorporated on their tax documents.
Current and former ACORN officers and members who are unhappy with what they describe as a lack of transparency and accountability in the group’s national leadership say those leaders use a New Orleans-based non-profit, Citizens Consulting Inc., to maintain centralized financial controls over affiliates.
Although the Louisiana Secretary of State described CCI as a non-profit in its registration records, no federal tax returns for a non-profit by that name could be found.
“To understand what is happening to ACORN today, try to imagine what it would be like if Tony Soprano took over Catholic Charities,” said Michael McCray, a former national ACORN board member from Georgia.
“All of the money that goes into ACORN goes into CCI first and there is no way to know how much is squandered or misappropriated,” McCray said.
Project Vote, which is also known as “Voting for America,” paid $1,266,967 to CCI from 2000 to 2004, according to the organization’s IRS 990 tax returns for those years. Project Vote registration drives have resulted in fraud investigations in at least 14 states, most recently in Nevada and in Pennsylvania.
Federal tax records also show the ACORN Institute paid CCI $61,443 in 2006 and $50,134 in 2007, and that the ACORN-affiliated Institute for Social Justice has paid CCI $362,464 since 2000.
ACORN Housing tax records showed a 2006 payment of $238,953 to CCI for “administrative services.” The connection has since been severed, according to Mike Shea, president of ACORN Housing.
“We no longer have a contract with Citizens Consulting for services,” Shea said. “We had gotten big enough to where we felt like we needed to bring it all in house and do it ourselves.”
Brian Kettenring, a spokesman for the national ACORN organization, declined to respond to the Examiner’s questions for this article. "You've written several stories on us already, we're keeping all of the right wing reporters in business," he said.
Karen Inman and Marcel Reid, former national ACORN board members who founded a dissident group known as the ACORN8, have called on Congress to suspend funding for ACORN until an audit is done and hearings are held on the result.
CCI should be a central focus of a congressional hearing because it funds and controls the organization’s many affiliates, according to Inman and Reid.
“The board positions are just a ceremonial presence,” said Reid who was also active with ACORN’s Washington D.C. chapter. “We could not get access to any of the accounts. We were only sitting in these positions to absorb any charges that came in for financial misappropriations. They were using us in case any legal issues came up. This is typical of ACORN. They come into these low-income areas and say they want to help people. But they are ready to turn around and have others carry the weight for any potential legal action.”
Reid and Inman were removed from ACORN’s national board after they requested financial records concerning the embezzlement of nearly $1 million by Dale Rathke, the brother of ACORN founder Wade Rathke. Dale Rathke was a top official at CCI before the embezzlement scandal.
“CCI is the money arm of ACORN,” said Ron Sykes,” treasurer of the Washington D.C. ACORN chapter. “There are many different ACORN affiliates and accounts but CCI controls all of it and they don’t want the local people to have any control over the finances.”
A Bank of America account set up for the D.C. group and its political action committee became a point of contention due to CCI control, Sykes said. A Washington D.C. resident was supposed to be attached to the account, he said.
As a result, Sykes said he was able, as the treasurer, to gain temporary access to the local group’s account, but CCI moved quickly to have his name removed.
Kevin Mooney is an Examiner staff writer for the commentary section.
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