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Louisiana intensifies probe of ACORN

Sides bicker over embezzlement figure from 10 years ago

THE ASSOCIATED PRESS

Published: October 7, 2009

NEW ORLEANS

Louisiana's attorney general said yesterday that he has stepped up an investigation into embezzlement at ACORN that occurred nearly 10 years ago, but he and ACORN clashed over how much money was taken.

Louisiana Attorney General Buddy Caldwell claimed that the figure was $5 million, but ACORN said that the sum hadn't changed from slightly less than $1 million that was reported.

ACORN said that its chief executive officer estimated it could cost up to $5 million to "get everything together" in the aftermath of the embezzlement, but ACORN's leaders claim only $948,607 was stolen.

The attorney general's new figure was reported in a subpoena filed last week. He was seeking information from a company that provided bookkeeping, accounting and other financial management services to ACORN.

ACORN said that Caldwell was basing the $5 million figure on remarks Chief Executive Officer Bertha Lewis made during an October 2008 board meeting.

"The $5 million figure was an off-handed remark by Bertha as a worst-case scenario for what it could potentially cost to get everything together," ACORN President Maude Hurd said in a statement. "Lawyers, accountants and consultants were quite expensive, and the board needed to know that. Bertha's remarks have since been taken out of context."

ACORN last year settled an internal dispute and a lawsuit involving accusations that Dale Rathke, a brother of the group's founder, made nearly $1 million in improper credit-card charges in 1999 and 2000. The Rathke family, and a donor have repaid the money and no charges were ever brought.

Caldwell's subpoena said that the exact amount was unknown until the 2008 board meeting. Caldwell said that he wanted ACORN's financial records to determine if the money was public or private.

Once he sees the records, Caldwell said, he would then determine if anyone can be charged.

"We're not going to take their word for anything," he said. "We're going to take their records and let the records speak for themselves."

The subpoena requested documents from Citizens Consulting Inc., which assisted ACORN, and from various accounting and legal consultants in New Orleans.

Dale Rathke's brother Wade, who founded ACORN, could not be reached immediately for comment. His wife, Beth Butler, said that he was in Thailand yesterday for work.

Karen Inman, one of two former ACORN board members removed last year after filing a lawsuit over the embezzlement, echoed ACORN's account of the 2008 meeting. She recalled that Lewis said that the embezzlement "generated more than $5 million worth of problems," including the need to hire an auditor. "I don't remember her saying there was additional money embezzled," said Inman.