ACORN’s Wade Rathke: Muscle for Money and Your Votes for Free

ACORN founder, Wade Rathke: Mysterious, controversial, never boring

Meet ACORN founder, Wade Rathke: mysterious, controversial, in-your-face community organizer and, some would say, corrupter of elections for power and profit. Michael Volpe interviews the man behind ACORN.

“The critics would say that Project Vote voter registration drives are used selectively only in those areas favorable to candidates that ACORN endorses and supports.”

Wade Rathke, who leaned back for most of the interview, leaned forward as this question was asked. “We cater to low and moderate income, black and Latinos. Is it my fault that one party has totally alienated all those groups? We do voter registration to our constituency. Period.”

Rathke continued, “If we were to do registration drives, would it make any sense to go to Wilmette, Winnetka, Lake Forest, and Glenview, (four of the wealthiest suburbs of Chicago) or would we come to Englewood and Austin? (The poorest neighborhoods of Chicago)”

ACORN, the community organization that Wade Rathke founded and led for nearly four decades, is a 501(c)4 and that allows it to endorse specific candidates. Project Vote, one of the three hundred plus affiliates that ACORN created, is a 501 © 3 and isn’t allowed to endorse. One of the many charges critics make against Rathke and ACORN is that Project Vote voter registration drives are organized only in areas in which the voters are sympathetic to the candidates ACORN itself endorses. By so doing, Project Vote is in effect engaged in partisan activities not allowed of a 501©3. To hear Rathke explain it, the voter registration drives are necessary constituent services, and political reality, not a conspiracy, explains why they more often than not benefit an ACORN backed candidate. This one controversy is emblematic of the mystery and intrigue that is Wade Rathke. For every nefarious charge, there’s Wade Rathke to offer a perfectly innocent explanation.

Rathke has been a force in community organizing for four decades and yet he continues to be an enigma wrapped up in a riddle. Is he the cold blooded radical hell bent on the destruction of America that critics like Glenn Beck contend? Is he the heroic community organizer that’s spent his life championing the poor and middle class that his supporters contend? Is he the “organic genius” that ACORN 8 member Marcel Reid contends? Is he a combination of all of those?

The only thing that is beyond debate is that Rathke maintains an affable and pleasant demeanor which makes him a uniquely gifted communicator. Matt Vadum of the Capital Research Center agrees with that assessment. He’s a D.C. based journalist and a frequent critic of ACORN. He saw Rathke at a book signing at the D.C. bookstore Busboys and Poets in the fall of 2009. “I walked out thinking I’d like to have a beer with Wade Rathke” says Vadum of his immediate impression following the signing. Despite being impressed with Rathke’s affable nature, Vadum continues to be a critic of ACORN. Strip away all the ideology, politics, and controversy and the secret to Rathke’s success is his extraordinary skills as a communicator. Like all great salespeople, preachers, and motivational speakers, Rathke is blessed with the gift of gab.

Besides this, Rathke’s world is like one of those pictures that’s full of dots that looks like a ship from the right angle. What you see depends entirely on your perspective. He’s been linked to the likes of William Ayers, George Soros and Abby Hoffman and Rathke says he’s never met any of them. Ask him about charges of commingling, misuse of funds, and fraud at ACORN and Rathke forcefully replies that under his leadership ACORN was audited each and every year and every year they were given a financial clean bill of health. Ask him about charges that the structure of the multi hundred ACORN affiliates was created to deceive and confuse and Rathke forcefully replies that no one makes such charges when a Bank of America, Citigroup, or Microsoft creates also create hundreds of sub corporations. For every charge of criminality, radicalism, and dangerous ideology, Rathke has a forceful answer. You’re left stuck in a world part Woodstock part Usual Suspects.

The story of Wade Rathke begins in Williams College in Boston in the late 1960’s. After his sophomore year, Rathke found work organizing for a group that those looked to inform folks about the Vietnam draft. Rathke quickly became disenchanted in the role. He said he thought he was going to help poor inner city blacks get informed about their rights. Instead, he wound up mostly working with wealthy white suburbanites looking to manipulate the system.

While his initial experience in organizing was far from perfect, this stint caught the eye of George Wiley, the chief organizer for the National Welfare Rights Organization. In 1969, Wiley offered for Rathke to start an organizing office for NWRO in Massachusetts. A year later, Rathke was moved to Arkansas. By 1970, Rathke’s vision was growing bigger than NWRO. He’d quickly created twelve affiliates: everything from tenant rights, living wage, social justice along with welfare rights. NWRO had a myopic vision. They wanted to focus on organizing welfare recipients. Rathke saw that vision as limited. After all, only a small portion of the population is on welfare and the public at large usually dislikes those people anyway. So, he presented his vision to the board. He didn’t know it then but the vision he presented would grow to what is now called the Association for Community Organizations for Reform Now (ACORN). It was a full service community organizing enterprise tailored to serve all the needs of the low and middle class. Rathke says that Wiley liked his vision but the rest of the board didn’t take to it. So, in 1970 Wade Rathke broke off and created the Arkansas Community Organization for Reform Now.

His first campaign in the new organization was furniture for families. Under then Republican governor Winthrop Rockefeller the state of Arkansas set aside money for furniture for poor folks, and ACORN fought on their behalf to maximize that program. It was an important campaign because as Rathke said, “If your first campaign fails, there is no second campaign.” ACORN found a warehouse and saw to it that thousands of Arkansas’ poor received furniture. With that, ACORN took off. The state is small enough that everyone soon knows everyone else. In 1972, the 24 year old Rathke met and befriended a 24 Arkansan working for the campaign of George McGovern, Bill Clinton. A lifelong friendship began.

The first national campaign for ACORN involved homesteading and with that the organization began spreading through the nation. By the mid 1970’s ACORN was gaining national traction and so Arkansas was replaced by Association and the main office was moved from Little Rock to New Orleans in 1978. Rathke’s organizing empire was growing as well. He started the local United Labor Unions Local 100 in New Orleans in 1980. He merged that with the SEIU in 1984. Rathke was one of the three founding directors along with Drummond Pike of the Tides Foundation in 1977.

ACORN continued to grow throughout the 1980’s and 1990’s. In 1992, Arkansas’ favorite son, Bill Clinton, became president of the entire United States. Rathke says he can still remember a front page photo in the Washington Post of Clinton, on the day after the election, giving then (and still) ACORN political director Zac Pollet a “big bear hug”. “We thought he was the best choice in 1992” Rathke said of Clinton, and “there was never a campaign we (ACORN) didn’t support him (Clinton)” So, just as Bill Clinton had arrived on the national scene, so too, ACORN’s reach and scope had taken a giant step forward.

The growth continued. Rathke estimates that the organization had offices in 40 states by the time he left in 2008. ACORN worked in nearly all areas of society: housing, accounting, voter registration, worker’s rights. Rathke even started both a radio and television station for ACORN. Still, ACORN remained relatively anonymous outside the community organizing world until 2006, when voter fraud allegations first surfaced. Then, in the summer of 2008, the New York Times broke the story that Wade’s brother Dale had embezzled almost $1 million from ACORN affiliate Citizen’s Consulting Inc. Since, controversy has engulfed the group and it reached its zenith last fall when two enterprising journalists, James O’Keefe and Hannah Giles, posed as a “pimp” and “prostitute” in a number of ACORN offices and were successful in getting the staff to give them advice on ways to hide their illegal activities. These days both ACORN and Rathke are a magnet for controversy and everything both do is under the proverbial microscope. Nothing about Rathke, ACORN, or the controversies that surround them is simple or tidy. For every accusation, there’s an equally forceful response. Often, the same people critical of Rathke on one issue will be equally forceful defenders on another. Controversies are never neatly tied. They often overlap with issues of power, corruption and transparency often being a common thread. Every controversy is like a spider’s web, with roots and tentacles in other controversies. All go to the heart of who Wade Rathke is and what he’s accomplished. Depending on whom you believe, or your perspective, something is either entirely innocent or totally nefarious. For instance ACORN’s most controversial affiliate, Citizen Consulting Inc., has been called by Vadum and other critics ACORN’s “financial nerve center” and its bookkeeper by Rathke. It’s a hall of mirrors with no easy answers or conclusions, only endless fascination.

Even what Rathke does, community organizing, is a source of controversy. Rathke described community organizing like this, “community organizing allows people to create an organization which fired by their participation and fueled by their voices, is able to build collective power through their concerted activity which engages their full citizenship, rights longstanding grievances, cries for change, and speaks to their aspirations and dreams for the future.” Vadum, however, applies a more nefarious intention to Rathke’s profession, “Rathke is endorsing Saul Alinsky’s “People’s Organization” concept. Alinsky believed in building multi-issue activist groups that would serve as armies of change, agitating and stirring up trouble in order to extort deep-pocketed businesses and in the process generate social, economic, and political upheaval in society. Rathke, the father of ACORN, does not endorse “democracy” in the American sense of the term; he embraces mob rule.”

The controversy only starts there. The biggest controversy surrounds the near million dollar embezzlement by Wade’s brother Dale from Citizen Consulting Incorporate, when Dale was its CEO. Starting in 1999 and going until at least 2001, Dale Rathke looted the organization of about one million dollars. Rathke neither offers excuses or apologies for his brother’s behavior. Instead, he says this of discovering his brother’s embezzlement, “once it was discovered, we had two choices restitution or retribution”. By this, Rathke means that ACORN had two choices: have Dale Rathke pay the money back or report him to the police. They chose the first. Beyond that though, details of the embezzlement were only shared with a very select group of top Rathke deputies. All swore to secrecy and the only reason news of the embezzlement is a matter of public record is because it was discovered by another staffer and leaked to the New York Times in 2008.

The handling of the aftermath of Dale Rathke’s embezzlement is central to the controversy that surrounds ACORN and Rathke. When I asked him how he normally chooses which campaigns to put the organization’s time into, he replied, “Oh, I usually take a vote and go with the membership.” Michael McCray, media director for ACORN 8 and a board member of ACORN from 2003-2008, disagrees with that assertion, “Yes, there’s a vote“ but McCray continues, “What winds up happening is that the organizers steer the issues”. (McCray and other current and former members of ACORN’s board started ACORN 8, a group looking to reform ACORN) Whereas Rathke presents a group that empowers it members and respects its input, McCray sees this as largely a myth. Instead, McCray believes the organization largely centers its power in the hands of organizers, each city has a chief, and all those organizers answer to ACORN’s chief organizer, the position Rathke held from 1970-2008. So, in fact, McCray believes that ACORN really only empowered one person under Rathke’s leadership, Rathke himself.

If ACORN really does empower all its members, why then was the embezzlement only shared with a select few? Rathke says that in any organization some decisions are made at the top. Rathke said that had the entire membership been made aware news of the embezzlement would have been leaked and ACORN’s enemies would have used the news to demonize the organization unfairly. As it is, that happened anyway.

This ideological dispute over the true nature of ACORN is at the heart of many of its controversies. Much has been of the numerous ACORN affiliates: names like Project VOTE, ACORN Housing, and ACORN Social Justice. Rathke compares all of these to spin off companies like Delphi and Lucent, spun off from General Motors and AT&T respectively. Still, there have been over three hundred identified and all have all sorts of different tax structures (be it 501 © 3, 4, or otherwise) Tracking the money becomes quite a chore, even if there’s nothing untoward happening. Rathke insists that everything was always on the up and up and everything was disclosed to the board. Michael McCray disagrees, “the board was never made aware of the affiliates” and “the board was never provided with proper tax returns to track the money”. Both are thoughts echoed by Marcel Reid another ACORN 8 member (who served on the national board of ACORN for three years) and Karen Inman (Inman served on the board of ACORN from 2003-2008). Reid says that the first she heard that ACORN had any affiliates was at the same July 16th, 2008 ACORN board meeting at which Rathke himself was removed. That’s when ACORN attorney Elizabeth Kingsley presented the board with a list of about 100 affiliates that Kingsley had uncovered. “We were shocked” Reid said of seeing the list. Reid, who lead the Interim Management Committee which investigated ACORN internally following the ouster of Rathke in the summer of 2008, said this, “it was only after we did the investigation that we discovered (the full extent of) all these organizations.”

With all these affiliates, there is yet another controversy. While Rathke insists that all these organizations are legally separate, they are certainly tied together ideologically. Often, they team up on campaigns. Often, employees of one wind up working at another. Sometimes, members of the board of one wind up on the board of another. Another controversy surrounds the allegation that individuals are installed on boards of any number of ACORN affiliates without their knowledge. “I don’t know of any instance in which someone was on a board without their knowledge” Rathke told me. “I can think of five occasions where someone was on the board of an affiliate and they didn’t know it”. Reid countered and she said that on one occasion that board member was Carol Hemingway, who currently serves as ACORN’s treasurer.

The affiliates were only one source of controversy for ACORN. Over the last three decades, ACORN has waged numerous battles with Wal-Mart over both unionization and wages. In fact, in his book Citizen Wealth, Rathke offered a platform for unionizing Wal-Mart outside the normal process of unionization. . He said that he successfully implemented that plan in Florida. Of course, Wal-Mart’s business model is based on economies of scale. That means that all goods are bought as cheaply as possible, sold with razor thin margin, and then profits are created by enormous volume. How does that square with Rathke’s demand that Wal-Mart pay everyone a “living wage”? Rathke says that providing all their employees with a living wage would amount to “a rounding error” in the balance sheet and bottom line of Wal-Mart.

ACORN’s role in the financial meltdown is another source of controversy. Mostly that surrounds their role in creating and implementing the Community Reinvestment Act. Thomas Woods, in his book Meltdown, listed the CRA as the second biggest culprit (behind the Federal Reserve) of the financial meltdown. In a February 2010 report in the House Oversight Committee lead by Congressman Darrell Issa, the report concluded, “ACORN used provisions in the CRA of 1977 that allowed community groups to challenge bank mergers and acquisitions if a bank did not adequately invest in its own community. These challenges, which featured ACORN’s standard of intimidation tactics, successfully forced banks to make lending agreements with ACORN Housing. If banks refused ACORN’s demands, they jeopardized approval of mergers in a timely manner. ACORN Housing moved to become the conventional service provider for the loans. ACORN reaped profits from over a billion dollars in loans to low income neighborhoods. Because of the policies and financial instruments developed in part through ACORN lobbying activities, borrowers eventually defaulted on the loans. The end result was bursting the housing bubble.”

Rathke dismisses the finding out of Issa’s committee out of hand, “Capitol Police need to give the researchers on Issa’s committee a field sobriety test.” Rathke doesn’t dispute ACORN’s role in cultivating CRA at all stages, “we were a part of it at every level” but Rathke disputes the results of that involvement, “the loans that were part of the portfolio brought by ACORN were some of the top performing loans at such banks as Citigroup, Bank of America, and Countrywide.” Rathke also added, “It’s not thuggery to help banks expand their profits and giv to more Americans for home ownership.”

On this issue, Rathke finds frequent critic, Michael McCray, a supporter. McCray, who spent almost five years in urban development for the USDA, calls the CRA, “a monumental piece of legislation”. He says its purpose has been perverted by many conservatives. McCray says that the CRA was borne out of the 1960’s and early 1970’s when banks “redlined”. That’s the process by which banks would identify entire neighborhoods, usually minority and always poor, and refuse to give any loans in that neighborhood no matter how strong the credit profile. The CRA identified these neighborhoods and required banks that were physically located in them to put a certain percentage of their funds back into the neighborhood through loans. McCray dismisses the assertion by Issa, Woods, and other conservatives like Sean Hannity that the CRA had any substantive effect on the mortgage crisis.

McCray and the rest of ACORN 8 also defend Rathke on another issue, muscle for money. In the Issa report, Muscle for Money was described this way, “Muscle for Money involves using non profit corporations for electioneering activities and an SEIU strategy to threaten corporations and banks into brokering deals for ACORN’s financial benefit. SEIU and Project Vote used litigation to force demands from government officials. ACORN, through Project Vote, threatened Secretary of State’s offices with lawsuits, thus forcing political compromises at the expense of the tax payers”.

Rathke counters, “Muscle for Money is a colorful expression but I don’t know that there’s a specific campaign that they can point to and say that’s Muscle for Money.” Meanwhile, ACORN 8 dismisses Muscle for Money entirely as something dreamed up by a disgruntled former employee of Project Vote named Anita Moncrief. Moncrief didn’t respond for comment for this article.

Whereas for those like Vadum the controversy over Rathke begins (though not necessarily ends) at ideology, that’s not the case for ACORN 8. ACORN 8 are all former board members of ACORN. They all believe in the mission of ACORN. For them the questions of transparency, power, and corruption at ACORN are all intertwined. Their disputes with Rathke cut to the heart of who Rathke is. If you were to believe every accusation made by those in ACORN 8, that would make Rathke ruthless, corrupt, and brilliant all at once. If you all the members of ACORN 8, Wade Rathke created a group that he claimed empowered its members when in fact it only empowered himself, and that was the plan from the beginning. Rathke says that ACORN was always transparent on his watch, the power was spread, and thus there was no corruption. Every member of ACORN 8 that I spoke with denied this vociferously. Karen Inman summed it up, “the only information that we (the board) received was information that Wade (Rathke) wanted us to have, that fit his agenda,” For instance, while Rathke has been running the local SEIU since 1980, Inman said that wasn’t revealed to her on the board until late in her term, “I didn’t know (Rathke) was head of the local SEIU until things hit the fan (in the summer of 2008)” said Inman.

As such, the critics charge that there’s a cult of (Wade Rathke) personality. “There is no cult of personality” Rathke told me, “do you really think that from New Orleans (Rathke’s base), I can control the day to day decisions of a local office in Minneapolis or Atlanta?” In fact, that’s exactly what all those in ACORN 8 said he was doing. All described an ACORN structure in which local organizers controlled everything: money, information, meetings, at each local office, and all the local organizers answered to the chief organizer, Wade Rathke. Meanwhile, they all described the board of ACORN as largely sycophants. Inman says that on one occasion ACORN President Maude Hurd referred to Rathke as “my boss” even though technically Rathke would answer to the board.

This environment would be easy to exploit and corrupt and that’s especially true when you consider the fact that ACORN has created over three hundred affiliates, each with its own bank account. That’s why disclosure is so critical, and the dichotomy between the recollections of Rathke and ACORN 8 couldn’t be more divergent. Rathke says that the board was always made aware when an affiliate was created and always given the proper financial statements, but that’s an assertion that every person I spoke with at ACORN 8 vociferously denies. Only Inman offered a nuance response, “maybe Wade disclosed an audit to some on the board like Maude Hurd but never to me”. Inman joined Reid on the interim management council which investigated ACORN internally following the disclosure of Dale Rathke’s embezzlement, and she said her role in the investigation was like discovering a whole new organization even though she’d been on the board for five years. All this mystery and confusion leads all of ACORN 8 to demand a full forensic audit. If you think that direct demand can finally lead to a climax in the story of Wade Rathke, he’s quick to remind that he’s no longer involved in ACORN and directs all such requests to its current chief organizer Bertha Lewis. Then, he reminds me that a full audit was conducted every year he was chief organizer, an assertion ACORN 8 denies, and on and on we go. ACORN itself didn’t’ respond for comment for this article.

As for today’s ACORN controversies, Rathke offers no excuses for the behavior of ACORN employees in the now infamous videos. He does however say that conservatives “smelled blood in the water” after the tapes were released, and that ACORN is a target because “it’s the biggest organization dedicated the advancement of poor middle class Americans”. If Rathke would have handled things differently, he’s not saying. He says that he doesn’t want to be a critic from the outside. Still, it’s hard not to notice that in 38 years at the helm ACORN went from an organization of one to half a million, and then in two years following it’s imploded and now exists on paper only.

Despite all the controversy that surrounds Rathke, he has not only survived but thrived. Ask Rathke how things are going and he typically responds, “Every day is an adventure”. That’s still the case for Rathke into his 60’s. While his former organization is disintegrating, Rathke continues to evolve. Rathke is currently the chief organizer of ACORN International, known domestically as Community Organizations International. It has offices in seven countries on five continents. He’s still the Chief Organizer of the local SEIU in New Orleans. He still publishes his magazine, Social Policy, four times yearly. He’s still a senior board member on the Tides Foundation. At 63, he still travels most of the world, going regularly to the Dominican Republic, Africa, and India. For better or worse, Rathke plans on spending the remaining years of his life implementing his ACORN vision to an organization that will have influence the world over. When asked if he thought his name would one day be used like Alinsky, as a verb in community organizing, Rathke simply responded, “yes”. Rathke remains mysterious, controversial, but never boring.

by Michael Volpe
image: memphis flyer; the Looking Spoon

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