Tags: acorn | subpoenas | fraud

ACORN Faces Massive New Investigations

Thursday, 17 Sep 2009 07:23 PM

By David A. Patten

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Newsmax has received copies of two wide-ranging subpoenas issued last month by Louisiana investigators, demanding detailed internal ACORN documents and memoranda that could expose the inner workings of an organization that has been the focus of vote-fraud and other allegations in at least 12 states.

Among the subpoenas' demands: "All documents, records, agreements, and financial records detailing the theft of funds by Dale Rathke, including, but not limited to settlements, agreements, or other documentation detailing the agreement between Dale Rathke and any ACORN affiliated company for Dale Rathke to repay funds …"

Dale Rathke, the brother of ACORN International President Wade Rathke, embezzled nearly $1 million from ACORN and its affiliated organizations in 1999 and 2000, according to a July 2008 New York Times report.

According to the Times, a small circle of ACORN (Association of Community Organizations for Reform Now) leaders kept the incident quiet and did not alert law enforcement. Wade Rathke told the Times that ACORN had signed an agreement for restitution with Dale Rathke "in which his family agreed to repay the amount embezzled in exchange for confidentiality," the newspaper reported.

That investigators are specifically targeting documents related to the Dale Rathke incident suggests they are concerned about related malfeasance.

The subpoenas are the latest in an avalanche of trouble sweeping over the New Orleans-based organization.

A series of undercover videos taken by two enterprising young journalists depicted the apparent willingness of ACORN staffers to aid the establishment of a reputed child prostitution ring, as well as defraud the Internal Revenue Service.

Since then, ACORN has lost its role as a provider of services to the U.S. Census Bureau. The U.S. Senate voted 83-7 to block ACORN's access to Housing and Urban Development funding. On Wednesday, California Gov. Arnold Schwarzenegger requested that the state attorney general conduct a "full investigation" of ACORN activities in the Golden State. And Thursday, the U.S. House of Representatives followed the Senate's lead and voted to defund ACORN.

The ACORN subpoenas are breathtaking in scope, and include:

  • Minutes of all board of director meetings for ACORN, its affiliates, and "subsidiary entities" from 1998 to the present.

  • All W-2 income reports and 1099 tax filings issued by ACORN, and its affiliates. All notices of tax liens, whether state or federal, for non-remittance of withholding and excise taxes.

  • Organizational charts for ACORN and its affiliated organizations.

  • A list of all ACORN and ACORN-related entities under the control of either Wade or Dale Rathke from 1998 to the present.

  • All "documents, financial transactions, and records" that detail all funds received by Dale and Wade Rathke in any form, including loans, benefits, use of property, and deferred compensation, dating back to 1998.
  • All state and federal income tax returns since 1998, for ACORN and all of its related affiliates.

  • All required filings for non-profit tax exemptions for ACORN and its affiliates.

    The subpoena also orders ACORN to hand over "All internal memorandum, whether formal or informal, pertaining to any of the above items."

    In the subpoena, Louisiana Attorney General James D. "Buddy" Caldwell cites several justifications for his department's investigation into alleged ACORN wrongdoing.

    He says in the filing that the probe began in June after former members of ACORN's board of directors filed a complaint alleging that ACORN violated a Louisiana statute regarding the filing of employee withholding taxes. They further complained that ACORN failed to report the Dale Rathke embezzlement to authorities; obstructed justice; and violated the Employee Retirement Security Act of 1974.

    The subpoena also cites and quotes extensively from a July 2009 report issued by the House Committee on Oversight and Government titled "Is ACORN Intentionally Structured as a Criminal Enterprise?"

    Documents received by Newsmax indicate the Louisiana Attorney General also has subpoenaed a New Orleans bank for records related to the ACORN subsidiary that, according to the subpoena, "provides bookkeeping, accounting and other financial management services to ACORN and many of its affiliated entities."

    Just some of the documents that a judge has ordered must be turned over to investigators: Account signature cards, account applications, deposit slips, front and back images of all checks, monthly transactional statements, withdrawals, wire transfers, safe deposit records, trust of custodian agreements, canceled checks, bank checks, and travelers checks are

    According to Wall Street Journal columnist John Fund, ACORN has received an estimated $53 million in federal dollars since 1994. ACORN chief organizer Bertha Lewis stated last year on Fox News' "The O'Reilly Factor": "We comply with all laws everywhere."

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