Even as it battles charges of fraudulent voter registration practices in North Carolina and more than a dozen other states, the Association of Community Organizations for Reform Now, or ACORN, is negotiating to sever all ties with its founder, whose brother embezzled almost $1 million from the group.
Two board members and Bertha Lewis, the organization's interim chief organizer, or chief executive, met last week in New Orleans to hammer out a deal with the founder, Wade Rathke, according to board members who learned Tuesday of the talks.
Rathke resigned as chief organizer after it became public this summer that his brother had embezzled almost $1 million from the organization eight years ago.
Rathke retained control of ACORN International, however, and maintained its offices in buildings in New Orleans shared by ACORN and many of its 174 affiliates. Foundations that support ACORN financially, as well as many of the 51 voting members of its board, have been critical of that arrangement, saying it allows Rathke to retain his influence over the organization.
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The deal, as described by board members, would hand Rathke control of the Wal-Mart Alliance for Reform Now, or WARN, an ACORN affiliate that focuses on what it considers to be unfair labor practices and other issues at Wal-Mart, and a radio station in Texas that is one of five media companies affiliated with ACORN, according to board members critical of the negotiations.
Lewis said there was no such deal and described the meeting as “a discussion.”
“Not to cast aspersions on your sources, but they're always a little bit off,” she said. “We discussed about 60 different corporations. WARN came up, ACORN International came up, but we didn't even discuss the radio stations.”
She said the various options for divorcing Rathke from ACORN would be presented to the board at its next meeting, which starts Friday. Rathke did not respond to an e-mail message seeking comment.
Some board members from a group of dissidents calling itself the ACORN 8 questioned the meeting. The group has demanded access to financial records and a forensic audit to review ACORN's accounting and financial records during the period the embezzlement was covered up.
Two of its members, Marcel Reid and Karen Inman, who also sit on the interim management committee that the board appointed to govern ACORN after the embezzlement scandal, filed a lawsuit in August seeking to break the Rathkes' ties to the organization, as well as protect financial records from destruction and enhance board access to documents.
They said the negotiations with Rathke were an end run around the board, a charge that ACORN has leveled against their lawsuit.
“I object to this, in part,” Inman said, “because the board was not told about these negotiations, but mainly because we have no idea what the assets held by those entities are because management has refused to do a forensic audit.”
Lewis said the two board members involved in the talks were assigned the task by the board's executive committee, which is charged with making decisions between the board's two annual meetings.