Endgame for ACORN

ACORN has been crumbling in the past few months.  Half of its state chapters have disaffiliated themselves from ACORN and reformed as independent organizations.  Now, according to the New York Times, ACORN is on the verge of filing for bankruptcy.  

The past few years have been catastrophic for ACORN, but not for the reasons most people think.  The trouble depended long before James McKeefe dressed up in his Pimps Я Us outfit and started harassing local offices.  

ACORN has had a long and troubled history.  I first learned about them when I got involved in grassroots organizing at the beginning of the last decade.  Shortly after I became an organizer, the local ACORN office was facing a strike from its own "organizers" (their term for canvassers).  They complained that they were working in unsafe conditions and not being paid fair hourly wages.  

The ugly situation peaked when ACORN strikers picketed outside the Seattle Labor Temple while ACORN management was attending coalition meetings inside.  It all ended after a NLRB ruling, a large settlement for back pay, the firing and replacement of the local office's manager, and the personal involvement of Wade Rathke, ACORN's CEO ... oh, pardon me, Chief Organizer.

Rathke, of course, was the center of a much larger scandal in 2008.  A firestorm erupted when it came to light that his brother, who was also on the salary of ACORN, had embezzled somewhere around a million dollars, or possibly more.  (The true amount has never been publicly revealed, to the best of my knowledge.)  Most companies, faced with a massive embezzlement, would call the FBI or the police.  But not ACORN, and not with the incestuous nature of the crime.  Instead, they buried the story.  A funder (apparently Drummond Pike, leader of the Tides Foundation) paid off the debt to ACORN and made a hush-hush payment arrangement with the criminal Rathke brother.  Only a select few board members ever knew about the secret, until the New York Times blew the whistle in July 2008.  

Afterward, Rathke attempted to explain why he would try to hide something this outrageous.  They - notably Rathke, the founder, CEO, and public face of ACORN - said that revealing the crime would put a "weapon" in the hands of its opponents.  But the cover-up revealed something much worse - no one was watching the books at ACORN.  They had failed the most basic test for nonprofits - they weren't keeping a close eye on their finances.  

Funders notice when things like this happen, and they reacted swiftly to the news.  By the fall of 2009, several major funders including the Ford Foundation, the Annie E. Casey Foundation, the Charles Stewart Mott Foundation, Bank of America and JPMorgan had all ceased their longstanding support of ACORN.  ACORN was sending out panicky fundraising letters with language like  "We need your help to survive."

By the time the videos started surfacing, ACORN was already on the way down.  O'Keefe was beating a dead horse.  It's possible that ACORN's crippled position made it easier for O'Keefe to get into multiple office.  But O'Keefe did not destroy ACORN.  

Republicans have been trying to make the name ACORN toxic since at least 2004.  James O'Keefe did some serious damage with his creatively edited videos and his wild stories.  (Note that no crimes have ever been charged in connection with the videos, except against O'Keefe himself.)   They were the final straw.  But ACORN's back had been broken long before. 

What actually brought it down was its own poor decisions and malfeasance.  If you want to blame someone for the collapse of ACORN, blame its founder.  Blame the man who became convinced that he could do no wrong, the man who created the house of cards and who blew it down. Wade Rathke built ACORN, and Wade Rathke deserves the blame for its collapse.  

And it's a damn shame.  ACORN has done some monumental work in its history:  fights against payday loan sharks, predatory lenders, redlining, fights for affordable housing.  They were a mighty force for good, but in the end, like so many great organizations, the hubris of its leader brought it low.  If we are fortunate, other powerful nonprofits will step in to take on the work that ACORN is no longer able to do.  We will not be better off without ACORN in the world.  

Previously:

ACORN Falls (November 6, 2009)

Dragging ACORN Through the Mud (September 23, 2009)

ACORN:  1.3 Million New Voters? (October 27, 2008)

ACORN - Demons and Smokescreens (October 20, 2008)

ACORN Haters Gotta Hate (October 13, 2008)

ACORN in Chaos (September 11, 2008)

More ACORN Fallout (August 18, 2008)

More Thoughts about ACORN (July 14, 2008)

The Fall of ACORN (July 9, 2008)

Wade Rathke - This I Pretend to Believe (February 2007)

ACORN Falls

“This is an investigation of everything — Acorn, the national organization, the local organization and all of its affiliated entities,” said David Caldwell, an assistant attorney general.

ACORN's offices in Louisiana are being raided as I write this. ACORN is going up in flames, and this time, it's for the right reason.

No, I'm not talking about Encyclopedia Brown the pimp and his sorry-ass Saved by the Bell reject wannabe hooker buddy.

The videotapes are bullshit, and you can quote me on that. They're preposterous, hucksterism, pointless, juvenile. This investigation is about the epic mismanagement of a national organization. And I believe it's the right investigation, for the right reasons.

They're targeting the embezzlement of around $1 million - maybe as high as $5 million, according to reports I've read - by the brother of ACORN's founder, Wade Rathke. ACORN has had a problem for a while, apparently, and only the publicizing of the crime made it clear how completely screwed up the organization was.

I'm not a lawyer, but it seems to me that having one guy with as much power as Wade Rathke had was a situation bound to lead to disaster. He was clearly getting involved in things without the knowledge of the board. (Why do I say that? Most of the board's members didn't even know about the embezzlement - or the secret "settlement" - until years after the fact. Years.) When all power is consolidated in the hands of one person, and when that person stops believing he has to be accountable to anyone - funders, board members, other officers - then trouble is bound to happen.

Then, just think about the fact that his brother was working high up in the organization as well, and had access to the organization's bank accounts. Recipe for disaster, I'm telling you.

ACORN's trying to set its house in order, but there have been years and years of damage that they have to undo. The embezzlement happened in 1999 and 2000. This was hidden for eight years. Now they're being investigated for tax fraud, and the investigators are also trying to determine how much money was actually embezzled. Remember, ACORN was a tax-exempt organization, run largely on individual contributions and foundation support. They were operating for the public's benefit. When you steal from a nonprofit, you are stealing from the public. In ACORN's case, Dale Rathke was effectively stealing from the very low-income families that they were trying to help.

ACORN's funding is drying up. Foundations don't want to touch them with a ten-foot pole until they can be absolutely certain that their money is going to be handled correctly. This is what should happen. This is the natural repercussion of their poor management.

And now they're being investigated by the state of Louisiana - again, not because of the pimptastic videotapes, but because of their outrageous financial mismanagement. Maybe the organization will be able to answer all of the questions and sever themselves of the taint of Rathke's leadership. Maybe they'll survive this, maybe they won't. But at least this time, the questions that are being asked are the right questions.

ACORN in Chaos

“Why are they still negotiating with Wade Rathke? Why are the people on staff who knew about this embezzlement still on the staff?”- Coya Mobley, ACORN Board Member

Two members of ACORN's board just filed a whistleblower lawsuit against the organization, seeking to remove Wade Rathke completely from the organization and to have financial documents related to the organization released.

Apparently, after Rathke left his position as "chief organizer" of the organization, he went to work with ACORN International, which is a separate organization that just happens to share office space with ACORN. Mr. Rathke has allegedly been making a bit of a nuisance of himself, walking into the offices of the organization he left in pieces and attempting to talk to the employees. They've asked him to stop.

“Mr. Rathke stubbornly refuses to do that, so he sort of haunts that office, tries to talk to folks doing their work,” according to Bertha Lewis, the interim chief organizer.

Rathke's huffy response isn't going to win him any friends. “I was with the organization for 38 years, and there are many people I hired and supervised, and I have great relationships with them. I haven’t been involved in supervising them. Are they saying that simply because I breathe, I exist, they have a problem?”

No, stupid. It's because you can't let go. You utterly failed the organization you created, and they have asked you to leave. It's one of the fundamental rules of community organizing. When the community asks you to leave, you find the door. You don't whine, you don't complain, you don't pout. You don't keep dropping in to see how things are doing. You get the hell out. It's time for Wade Rathke to find the door.

ACORN's lack of transparency, and Rathke's inability to honor boundaries, are only going to prolong this disastrous scandal in the public eye. The lawsuit is a reaction to bad behavior. The best way to make this thing go away is to act honorably, openly, and swiftly, and they aren't doing any of that so far.

More ACORN Fallout

“Does Drummond know the word is out? If not, shouldn’t someone tell him?”

I'm going to do something I have never done. I'm reposting an entire blog entry from someone who is not me. The author is one Drummond Pike. He maintained a blog on the Tides Foundation website - a blog that has since been scrubbed from the internet. (I copied the cached page from a Google search in order to recreate this blog post.) Keep reading to find out why Mr. Pike might have wanted to hide this particular entry.

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Time to Step Aside
Author: Drummond Pike
Source: Notes from the Left Coast
http://drummondpike.tides.org/index.php/2008/06/25/saultime-to-step-aside/

Wade Rathke has done something some would never have predicted. Resigned as ACORN’s Chief Organizer. Who ever would have imagined?

I met Wade in 1972, as best I can recall. Marge Tabankin and I were running the Youth Project (she was my boss) and had developed a bit of a competition to find the most impressive new organizers “out there.” The YP, begun in the Center for Community Change’s basement, was an operation to leverage foundation $$ into community organizing that involved young people – an attempt to bring the national movements of the day down into the everyday lives of disenfranchised communities. I came up with Mike Miller from Organize, Inc. in SF – a skilled, talented follower of Saul Alinsky’s Industrial Areas Foundation approach: parish based, working class organizing. Alinsky had defined the field in many ways and his Rules for Radicals was found on the shelves of an entire college generation at the time. Margie’s choice was this kid named Wade Rathke.

Rathke was this ornery, young red head in Little Rock, Arkansas that was a couple of years into what would become ACORN as we know it today. He’d dropped out of Williams College to work with the anti-draft movement, but ended up working with George Wiley on the National Welfare Rights Organization. He built an edgy, confrontational group in Springfield, MA and learned on the job how to push for a better break for welfare mothers. His yearning to return to the south led him to convince Wiley to back his hair-brained scheme to build a new kind of organization that expanded the range – low AND moderate income folks, but stretched organizationally beyond one city into a statewide, and ultimately national, approach where there were more levers of power.

So, when I showed up in Little Rock on that hot, humid day in 1972, I found something I hadn’t expected. New thinking, new ambition, new methods. Later, on a whim, I invited Wade up to train some organizers in Montana at the Northern Plains Resource Council. What I saw then truly convinced me that this was a special person – able to find common ground between welfare moms in Springfield, aggrieved neighbors displaced by a freeway being built through their Little Rock neighborhood, and land-rich ranchers in eastern Montana fighting coal strip-mining. What they all faced was an imbalance of power, and they were swimming upstream. He imparted wisdom, practical advice on strategy and tactics, and an invitation to think of themselves in a larger context.

I was deeply impressed, and when I started up Tides several years later, he was my first call to recruit for the Board. Over the 32 ensuing years, he’s been a font of wisdom and advice on how to build an organization. I’ve felt often as though I were sitting at the foot of a master, and I think I was. He built ACORN on the premise that old models were meant to be challenged, and that’s something we at Tides have absorbed as well.

Later, when he started what became Local 100 of the SEIU, he pulled off a similar “defying gravity” move: he started a new union in a “right-to-work” state whose laws were extremely hostile to any effort to organize workers. Once again turning convention on its head, he figured out that workers consigned to minimum wage jobs had issues, an instinct to make their efforts collective, and a willingness to give the intense Rathke a chance to show them a new way. Now getting contracts signed with employers in right-to-work states is challenging in the extreme, but judging by the hostile monitoring they got during the Bush 1 years, they must have been doing something right.

I am convinced that the light of history will shine on Rathke quite brilliantly. In his 38 years at the helm of ACORN, he achieved what few have ever done working with poor people. He showed them that, through their own devices, and when collected in significant numbers and willing, on occasion, to be “impolite,” they can win real, tangible victories. If you have ever attended a national convention of ACORN, you will know what I mean. And if you ever need testimony, just talk to one of the leaders of ACORN like Maude Hurd and before her, Steve McDonald, or any of the others. 400,000 families are members, and it is hardly surprising to see progressive national candidates for public office come and address the throng. America will never be the same for the ACORN he helped build from scratch.

There is a paragraph in his blog about moving on that talks about the things that didn’t go well. I know about this from my own experience with Tides. You make decisions. You care. You do what you think is right. And, inevitably, some things you get wrong. How we are able to move forward directly depends on how we see the things that don’t go well and whether we learn from them. As Amory Lovins once famously invoked, “Systems without feedback loops are inherently stupid.” You can say the same about organizers and managers. The thing that many who meet Wade in other circumstances may miss is that he has always maintained the most important of feedback loops – those with the members and leaders. The respect he always shows, the deeply human connection between organizer and members he always honors, are incredible to behold.

I once traveled to Peru with Wade during the time leading up to the launching of ACORN Peru, I saw this same deep respect, combined with an understanding of the circumstances in which folks were organizing. I also saw him meet an equal, recognize and respect it, and establish a real understanding about the power of organizing in changing lives. This fellow, pictured on the right, ran an amazing organization that could produce thousands of people on the street on very short notice. I actually believe Wade was a bit jealous!

As Wade so eloquently says, he is moving on to work with “the weak” links in the ACORN network – the international ACORN’s and Local 100 which is recovering still from Katrina. He’s unlikely to call them “weak” in a year. Why? Because he’s our generation’s great organizer.

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This post was written June 25, 2008, around the time that Wade Rathke resigned from ACORN. It was intended as a heroic tribute to someone who Pike clearly holds in great esteem. This post looks even more suspicious, given the news that broke today.

Weeks after Mr. Pike wrote this post, the New York Times broke the story that Wade Rathke's brother had imbezzled close to a million dollars from ACORN, and that Wade and a few ACORN insiders had hidden the crime from everyone - investors, supporters, and even several members of the board - for years. (A refresher here.)

In that article, the New York Times reported that the stolen money had been repaid by some anonymous donor - a remarkable gesture by someone who clearly was trying to protect ACORN from further damage.

Today, the Times reported that this donor was one Drummond Pike - the founder and chief executive of the Tides Foundation.

Problems:

1. Wade Rathke sat on the board of the Tides Foundation. Oh, until very recently. Questions, questions, questions.
2. Pike has not confirmed that he paid the debt - although it has been confirmed by other sources - and it is still unclear whether he paid it with his own money or Tides money. His succinct response was, “As a rule, I do not comment on my personal finances.” If it turns out he did this with Tides money and not his own money, this is going to erupt into a full-blown disaster.
3. The Tides Foundation gave grants to ACORN on numerous occasions. Pike was one of a handful of insiders - including Rathke - who knew about this scandal and did nothing until the Times broke the story. There is now reason to question not only Mr. Rathke's behavior and judgment, but also Mr. Pike's leadership re: his foundation.
4. The Tides Foundation is one of the most important funder of social justice work. Tides funds innumerable nonprofit organizations. If it turns out Tides money was used to repay this debt, every organization that ever received Tides money will now be tied to the ACORN scandal, thanks to Mr. Pike's actions.
5. I can guaran-damn-tee you that few, if any, donors to the Tides Foundation knew about this behind-the-scenes deal. If it were me, I sure would want a say in whether my money was being used to cover up a crime. (Again, assuming that Tides money went to pay the debt.)
   

In retrospect, it looks like Pike's farewell letter to Rathke is just part of the coverup. He knew something was dirty in Rathke's sudden resignation, and yet he still wrote this piece that made Rathke look like some magnificent combination of Horatio Alger and Martin Luther King.

Far from being over, the ripples of this scandal are just beginning.

This is the part that sticks with me. I wonder if Pike was commenting on his own behavior when he wrote these words, or if it was meant sincerely at the time. Regardless, these words are going to come back to haunt him.

You make decisions. You care. You do what you think is right. And, inevitably, some things you get wrong. How we are able to move forward directly depends on how we see the things that don’t go well and whether we learn from them.