Because the mainstream media will not inform you about this, the Executive Summary of the report is below and the entire report is linked as well. Keep in mind that ACORN "was" OBAMA's life in Chicago. He taught ACORN and he was ACORN's lawyer.
Is ACORN Intentionally Structured As a Criminal Enterprise?
U.S. House of Representatives
Committee on Oversight and Government Reform
July 23, 2009
I. Executive Summary
We should be unfaithful to ourselves if we should ever lose sight of the danger to our liberties if anything
partial or extraneous should infect the purity of our free, fair, virtuous, and independent elections.
President John Adams, Inaugural Address, 1797
The Association of Community Organizations for Reform Now (ACORN) has repeatedly
and deliberately engaged in systemic fraud. Both structurally and operationally, ACORN
hides behind a paper wall of nonprofit corporate protections to conceal a criminal
conspiracy on the part of its directors, to launder federal money in order to pursue a
partisan political agenda and to manipulate the American electorate.
Emerging accounts of widespread deceit and corruption raise the need for a criminal
investigation of ACORN. By intentionally blurring the legal distinctions between 361
tax-exempt and non-exempt entities, ACORN diverts taxpayer and tax-exempt monies
into partisan political activities. Since 1994, more than $53 million in federal funds have
been pumped into ACORN, and under the Obama administration, ACORN stands to
receive a whopping $8.5 billion in available stimulus funds.
Operationally, ACORN is a shell game played in 120 cities, 43 states and the District of
Columbia through a complex structure designed to conceal illegal activities, to use
taxpayer and tax-exempt dollars for partisan political purposes, and to distract
investigators. Structurally, ACORN is a chess game in which senior management is
shielded from accountability by multiple layers of volunteers and compensated
employees who serve as pawns to take the fall for every bad act.
The report that follows presents evidence obtained from former ACORN insiders that
completes the picture of a criminal enterprise.
First, ACORN has evaded taxes, obstructed justice, engaged in self dealing, and
aided and abetted a cover-up of embezzlement by Dale Rathke, the brother of
ACORN founder Wade Rathke.
Committee investigators have established that a violation of corporate duties led to gross
abuses of tax laws and other federal regulations. According to documents obtained from
insiders, ACORN was made aware of its lax management structure but chose to ignore
the problems and continue a cover-up of criminal activity. By refusing to report Dale
Rathke’s embezzlement of $948,607.50 as an excess benefit transaction, ACORN
appears to have violated the Internal Revenue Code. ACORN’s cover-up of the
embezzlement for more than eight years would also constitute obstruction of justice.
Second, ACORN has committed investment fraud, deprived the public of its right to
honest services, and engaged in a racketeering enterprise affecting interstate
Committee investigators have documented ACORN’s use of charitable contributions
against donor intent, typified by ACORN’s secret transfer of donor funds to recover
losses due to embezzlement. Moreover, ACORN comingles the accounts of federally-
funded affiliates with politically-active affiliates and lacks sufficient oversight to
safeguard taxpayer and donor interests, even though it receives millions of federal
ACORN’s purposeful lack of quality control translates into the employment of convicted
felons and other suspect persons. Through a strategy of providing financial incentives to
employees who meet voter registration quotas, ACORN conducts voter drives that
routinely produce fraudulent registrations. In fact, ACORN’s employment practices have
the intentional effect of encouraging voter registration fraud while linking criminal
culpability to the lowest-level employees rather than the directors who contrive the illegal
To date, nearly 70 ACORN employees have been convicted in 12 states for voter
registration fraud, though no federal charges have been filed against ACORN’s directors.
In fact, Pennsylvania judge Richard Zoller – after holding a low-level ACORN employee
liable for election law violations – noted that “somebody has to go after ACORN.”
Third, ACORN has committed a conspiracy to defraud the United States by using
taxpayer funds for partisan political activities.
Committee investigators have unearthed documentation that ACORN and its affiliates
conducted meticulous research that fed aggressive campaign initiatives designed to elect
Democratic candidates in targeted races. ACORN forged both formal and informal
connections with former Illinois Governor Rod Blagojevich, Ohio Senator Sherrod
Brown and President Barack Obama, among others. Each of these campaigns received
financial and personnel resource contributions from ACORN and its affiliates as part of a
scheme to use taxpayer monies to support a partisan political agenda. These actions are a
clear violation of numerous tax and election laws.
Documents contained in this report reveal ACORN’s political agenda. ACORN’s 2005-
2007 Strategic Plan states that “just as important as . . . mobilizing existing progressive
voters, ACORN and similar groups actually create new progressive voters.” In the same
document, ACORN acknowledges that its “issue campaigns play the dual role . . . of
attracting new members, and educating or politicizing existing members.” One particular
issue where ACORN claims success is “fighting key elements of the national Republican
In other documents, ACORN affiliates take credit for the election of former-Illinois
Governor Rod Blagojevich. In the 2006 year-end report of ACORN affiliate Service
Employees International Union (SEIU) Local 880, efforts to elect Blagojevich and
advance partisan political agendas are called “flawless.”
Labor organizations, unions, and other tax-exempt entities stretched Chicago-style
political manipulation and back room schemes beyond Illinois to other state-wide and
national campaign efforts. In the State of Ohio, where ACORN directors drafted a
political plan contained in this report, overt partisan goals are enumerated. The ACORN
Ohio Political Plan states:
ACORN will target three competitive Ohio congressional districts
as well as a half dozen state rep seats nested within the districts.
Our electoral work will mobilize and educate voters [and] our
paid professional canvass will execute tightly managed Voter ID
and GOTV canvasses moving our core constituency of base and
swing voters to the polls to vote for the candidates who most
closely align with a progressive Working Families Agenda.
Moreover, documents provided by former ACORN employees and contained in this
report demonstrate the degree to which ACORN and ACORN affiliates organized to elect
President Barack Obama in 2008.
Fourth, ACORN has submitted false filings to the Internal Revenue Service (IRS)
and the Department of Labor, in addition to violating the Fair Labor Standards Act (FLSA).
Committee investigators have tracked ACORN’s numerous failures to comply with
federal laws that required the payment of excise taxes on excess benefits to Dale Rathke.
SEIU Local 100 – under the direction of ACORN founder Wade Rathke – filed bogus
reports with the Labor Department in order to conceal embezzlement. ACORN violated
the overtime and record-keeping provisions of FLSA. All of these fraudulent acts would
constitute a violation of 18 U.S.C. § 1001 by presenting false documents to the United
Fifth, ACORN falsified and concealed facts concerning an illegal transaction
between related parties in violation of the Employee Retirement Income Security
Act of 1974 (ERISA).
Committee investigators have concluded that ACORN plundered employee benefits and
violated fiduciary responsibilities under ERISA by relieving corporate debts through
prohibited loans to a related party. Moreover, ACORN affiliates lack independent
control of their own assets and maintain shoddy accounting practices that serve to hide
ACORN’s secret and illegal use of monies.
ACORN conspired to conceal information concerning prohibited transactions from its
board in violation of its corporate charter. ACORN’s termination of board members who
sought to uncover its illegal activities perpetuates a cover-up at the expense of adherence
to its own bylaws.
The evidence contained in this report proves that ACORN’s stated purpose to promote
grassroots civic participation has been perverted through fraudulent and illegal acts. The
weight of evidence against ACORN and its affiliates is astounding. This syndicate of
tax-exempt organizations has coordinated and implemented a nation-wide strategy of tax
fraud, racketeering, money-laundering and manipulating the American electorate.
Scrutiny is essential to lift a dark cloud of suspicion from nonprofit community
organizations; to bring to justice the responsible parties who have heretofore been
shielded from prosecution by ACORN’s obscure organizational structure; to protect the
American system of democratic self-government from manipulation and disruption; and
to free our political climate from the choke of corruption that threatens to strangle free
and fair elections.