Obama - Rathke connection exposed

More collectivism: hereSaul Alinsky: hereWade Rathke: here

From Little ACORNs, Big Scandals Grow

The in-your-face Association of Community Organizations for Reform Now (ACORN) is currently being investigated for voter-registration fraud in 13 states. ACORN is often referred to as the spawn of Saul Alinsky (1909-72), the godfather of radical community organizers, whose most famous aphorism was "Keep the pressure on." ACORN's founders certainly had Alinsky's principles in mind when they founded the organization in 1970.

There is a web of connections between Alinsky, ACORN, and the Democratic presidential nominee, Barack Obama. From 1985 to 1988, Obama worked for the Developing Communities Project, a church-based consortium operated by several Alinsky disciples on Chicago's poverty-plagued South Side. The DCP was imbued with Alinsky's philosophy of helping poor people band together at the grassroots level to confront a city government that frequently neglected them. (Obama contributed to the anthology After Alinsky: Community Organizing in Illinois, touting the "impressive results" his Alinsky-inspired project had achieved.) Just before he left Chicago for Harvard Law School, Obama also went through training with the organization Alinsky founded in 1940, the Industrial Areas Foundation (IAF), and which carries on his legacy today.

Back in Chicago in the early 1990s, Obama represented ACORN in a voter-registration suit and directed a voter-registration drive for an ACORN affiliate, Project Vote. He sat on the board of the Chicago-based Woods Foundation that made hundreds of thousands of dollars' worth of grants to Project Vote and (according to a report published in an ACORN journal in 2004) ran a session on power as part of ACORN's annual leadership training sessions for several years before his first run for public office in 1996.

To hear it from people connected to IAF, though, Obama took an unfortunate turn when he linked himself to ACORN, whose activist shenanigans would have Alinsky spinning in his grave. These range from allegedly procuring thousands of phony and multiple signatures on voter registration lists (one 19-year-old in Cleveland claimed to have been bribed with cash and cigarettes to register 72 times over 18 months) to using taxpayer funds to strong-arm mortgage companies into lending to the un-credit-worthy, helping precipitate the current financial meltdown.

"Shakedowns" and "blackmail" were the words used by IAF's director, Edward Chambers, a protégé of Alinsky, about ACORN and its activities when I called the IAF's Chicago headquarters (IAF today trains organizers in a loose network of some 57 affiliates in 21 states). It was the day before the New York Times published a story about a June 18 internal report by an ACORN lawyer which contained a laundry list of "potentially improper use of charitable dollars for political purposes; money transfers among [ACORN's 174 affiliates, some of them tax-exempt, others not], and potential conflicts created by employees working for multiple affiliates," as Times reporter Stephanie Strom put it.

One area of potential impropriety detailed in Strom's story is the relationship between Project Vote, registered as a tax-exempt charity with the Internal Revenue Service since 1994 and thus barred from engaging in partisan political activities, and ACORN itself, a membership organization incorporated under Louisiana law that is nonprofit but not tax-exempt and is thus free to be as partisan as it wants. ACORN's political action committee, for example, endorsed Obama in February, and the Obama campaign in turn paid an ACORN consulting affiliate, Citizens Services Inc., more than $832,000 for its work in helping Obama beat Hillary Clinton in the Democratic primaries.

ACORN has a contract with Project Vote to conduct voter-registration drives using ACORN employees, who initially claimed to have signed up 1.3 million new voters at a cost of $16 million, then lowered that figure to around 450,000 (according to an October 23 New York Times story) after eliminating fraudulent registrations, duplicates, and incomplete forms. The internal report, by Washington lawyer Elizabeth Kingsley, pointed out that until very recently, Project Vote's executive director, Zach Pollett, was also ACORN's political director. (Pollett resigned from Project Vote in July but continues to work for the charity as a consultant via another ACORN affiliate.) Furthermore, the report noted, Project Vote has had only one independent director (who served only briefly) throughout its entire tax-exempt history. The rest of the board has consisted entirely of ACORN staffers plus two dues-paying ACORN members. Some of them told Strom they had no idea they were on the Project Vote board, which, like the boards of many ACORN affiliates, met seldom, if ever, and failed to keep minutes.

The potential for abuse in an interlocking arrangement governed top-down from New Orleans is as obvious as a thicket of "Change" signs at an Obama rally. ACORN's using Project Vote to trawl for voters for ACORN-backed candidates--such as, um, Barack Obama--would be a clear violation of the IRS's ban on partisan activity by a charity, as Kingsley noted in her report. Strom pointed out that ACORN is already facing demands for back taxes from the IRS and "various state tax authorities."

ACORN is secretive about its financial condition, which, because it is not tax-exempt, it has no legal obligation to make public. When I called ACORN's New Orleans headquarters to ask about its funding arrangements, its press spokesman, Charles Jackson, refused to answer my questions unless I put them in writing, and after I did via email, Jackson was not heard from again. The New York Times in a 2006 article, however, stated that ACORN's budget for that year, not counting its research spinoff and the ACORN Housing Corporation, another tax-exempt charity among ACORN's affiliates, amounted to $37.5 million. Only $3 million of that came from the claimed 500,000 ACORN members' dues, according to the Times story, with the rest rolling in from foundations, private donations, and arrangements called "partnerships" in which corporate targets of ACORN activism, such as the Household Financial Corporation (one of ACORN's focuses is "predatory lending") pay money to ACORN for the organization to operate, say, loan-counseling programs.

A Wall Street Journal article published on July 31 noted an additional source of ACORN funding: U.S. taxpayers. Journal reporters Elizabeth Williamson and Brody Mullins analyzed the IRS filings of the tax-exempt ACORN Housing Corporation for 2007 and noted that some 36 percent of the funds raised by the housing affiliate last year--$2.8 million out of $7.7 million--came from the federal government, mostly in the form of grants from the Department of Housing and Urban Development. (According to an October 14 editorial in the Wall Street Journal, that represented only a small part of the estimated $16 million in federal grant dollars that various ACORN affiliates bearing names such as American Institute for Social Justice and American Environmental Justice Project took in from 1997 through 2007.) Wade Rathke, ACORN's founder and, until this past summer, CEO, writing on his blog "Chief Organizer" on June 18, the very date of Kingsley's critical report, estimated that ACORN's total budget for 2008, counting all affiliates, would likely be a record $110 million.

Rathke was forced out of his job at around the same time he posted his optimistic budget projection because of another eyebrow-raising matter raised in Kingsley's report: the way ACORN hushed up the embezzlement of nearly $1 million from the organization by Rathke's brother Dale, who headed an ACORN affiliate that provides financial-management and accounting services to other ACORN units. The theft occurred in 2000, but ACORN's top management concealed it from both the board and law-enforcement authorities until this past May, when word leaked out at a meeting of ACORN organizers. Dale Rathke had even been allowed to keep working for ACORN, although at a reduced salary and in the lesser capacity of his brother's assistant, while the Rathke family agreed to pay back the organization at the rate of $30,000 a year (in other words, over 30-plus years).

The Rathkes were permanent fixtures at ACORN. Wade Rathke had cut his teeth in radical activism in 1967, when he helped George Wiley found the National Welfare Rights Organization, a quintessential 1960s group that mobilized hordes of welfare mothers to invade benefits offices with lists of demands. (Melees involving overturned desks, and broken glass often resulted from these encounters.) The movement failed to impress the general public, and the National Welfare Rights Organization went bankrupt in 1975. Meanwhile, Wade Rathke had founded ACORN and soon brought his brother on board.

Once the ACORN embezzlement became public in May, however, along with the news that the Rathkes, thanks to the snail's-pace terms of their restitution agreement, had reimbursed ACORN for only $210,000 out of the $948,000 stolen eight years ago, Dale Rathke was finally fired and Wade Rathke obliged to resign, although he continues to hold the title of chief organizer for ACORN International, yet another entity on the seemingly endless list of ACORN affiliates. Even here, Kingsley's report revealed that the version of the embezzlement that ACORN gave out to the public this past summer differed from what her perusal of internal ACORN documents revealed. On July 8, according to the Times, ACORN's new top executive, Bertha Lewis, had said that 90 percent of the money had come from ACORN itself and the remainder from its charity affiliates. In fact, Kingsley found, $215,000 had been charged to an American Express card paid by an ACORN pension fund that later wrote off the amount as a gift to ACORN in possible violation of federal pension-fund regulations. According to a recent article in the Chronicle of Philanthropy, the embezzlement scandal cost ACORN, already encumbered with debt and tax problems, grants from some of its key funding foundations, and the organization has had to close several offices and lay off employees. (A friend of Wade Rathke has eased the cash-flow crisis somewhat by paying off the $738,000 the Rathkes still owed in restitution, according to the Chronicle.)

As for ACORN's protest tactics, the kind that have netted it decades' worth of counseling contracts and other cash handouts from corporations and municipalities, they indeed seem to fall into the category of "shakedowns." The 2006 New York Times article was about a cadre of utility customers wearing red ACORN T-shirts who descended on the Gary office of the Northern Indiana Public Service Company to pay their heating bills out of bagfuls of pennies. The aim was to force the utility, via hours of tedious coin-counting and unpleasant media coverage, to drop delinquency penalties for tardy bill-payers with hard-luck stories. A company spokesman pointed out that the utility already had an assistance program in place for poor people unable to pay for heat and said the ACORN tactics amounted to "bullying."

Nonetheless, such stunts, which seem to come straight from the yellowed pages of Tom Wolfe's send-up of 1960s radical activism, "Mau-Mauing the Flak Catchers," are remarkably effective even nearly 40 years after the Sixties officially ended. Corporate executives, bureaucratic lifers, and foundation grant-processors alike seem either cowed or impressed by such tactics as protesting a bankers' dinner with inflated rubber sharks, piling garbage in front of city hall, or yelling profanities at a mayor's wife and children. All of these were part of a prolonged ACORN protest in Baltimore a few years ago that, according to Sol Stern of the Manhattan Institute's City Journal, were the likely source of an annual $50,000 payout from the city to ACORN for providing housing counseling to the poor. On the very eve of the collapse of Wachovia Bank this September--done in by its fatal investments in home-mortgage instruments that the ACORN watchdog Consumers Rights League says were pushed by ACORN itself through its taxpayer-subsidized housing affiliate--ACORN was busy trying to mau-mau Wachovia into rewriting the terms of those swiftly defaulting loans by portraying the bank to the media as a piranha lender.

The IAF's Edward Chambers told me that scarcely any act in ACORN's three-ring circus of urban radicalism would have met with the approval of Alinsky, the man whose ideas supposedly underlie the rubber sharks and sacks of pennies. "They take other people's money instead of raising it from the people they're organizing," said Chambers. "They take federal money, money from foundations, and it corrupts them." The IAF insists that any organization that wants to affiliate with IAF--and benefit from IAF's training--come up with its own money, money voluntarily donated by people who believe in the group's causes so fervently that they are willing to dip into their own pockets to pay for it. "We work a lot with churches, with unions," said Chambers. "They hire their own organizers, and they hold them accountable. And we never endorse political candidates."

Indeed Alinsky himself was a far more complex and idiosyncratic figure than either his disciples or his ideological opponents (who assume that his last book, Rules for Radicals, published in 1971, was all about turning yourself into another Abbie Hoffman) typically admit. Alinsky, a self-styled radical who studied at the University of Chicago and began his professional career as a union organizer, was widely accused of being a Communist, but was in fact vehemently anti-Communist. Later on, during the 1960s, he was as much a foe of Lyndon Johnson's big-spending War on Poverty as he was of conservatives. He also detested the 1960s New Left for its antinomian cultural hedonism and its insistence on smashing the "system," as they termed it. Alinsky believed genuine radicals ought to work within for change. "Alinsky believed that the liberal welfare state led to dependency, and that people should stand up for themselves and have the confidence to assert their own interests," said Peter Skerry, a political scientist at Boston College.

Alinsky's self-selected territory as a community organizer during the 1940s was Chicago's Back of the Yards neighborhood, then a working-class slum abutting the city's stockyards and peopled with ethnic Poles, Lithuanians, and Slovaks. They might have felt marginalized economically (many worked low-grade jobs in the meat-packing industry) but they remained deeply conservative socially. Most were devout Catholics, and, in order to organize them to demand better municipal services, Alinsky allied himself with Bishop Bernard Sheil and the Catholic labor organizer Joe Meegan. Later, during the 1950s, as Chicago's meat-packing clout declined and its Eastern European ethnics moved elsewhere, Alinsky turned his attention to working-class blacks who were also socially conservative and church-oriented. Although confrontation with the prevailing establishment was a key component of Alinsky's efforts to turn lower-class communities into effective power blocs, he had little interest in class struggle. If a movie analogy is apt, Alinsky's ethos of activism was more On the Waterfront than Salt of the Earth.

Alinsky's legacy organization, the IAF, has continued his practices: working with churches, trying to shore up families and other traditional institutions, and insisting on fiscal independence. They have also worked to sand down the edges of the founder's harsh style to reposition the IAF as a service organization focused on training community organizers rather than provocation. "When I was on the board, I heard more criticism of Saul Alinsky than anything else," recalled Jean Bethke Elshtain, a philosopher at the University of Chicago's divinity school, and a political centrist and prolific writer associated with the "communitarian" movement of the 1980s and 1990s, who until recently served on IAF's board of trustees. Elshtain, whom Chambers personally recruited to serve as an IAF trustee, said she had been drawn to the IAF precisely because of its commitment to "shoring up families and schools and personal responsibility."

Because the IAF insists that its affiliates rely on grassroots contributions, not outside grants, its projects tend to be strictly local and relatively small-bore, centered around liberal Protestant and Catholic churches and their members. One of the most successful has been the Communities Organized for Public Service (COPS), a consortium of churches, founded in San Antonio, Texas, in 1974. COPS, the brainchild of the IAF-trained Ernesto Cortes Jr., is credited with giving political clout to San Antonio's Mexican-Americans, who had lived in the city for decades but who had enjoyed little power under the city's Anglo majority. Another successful IAF project is the Nehemiah Houses, which over the past 20 years has built nearly 4,000 moderate-income homes on once-desolate parcels of city-owned land in New York City. Nehemiah requires its buyers to demonstrate their commitment to home-ownership via modest but not negligible down payments, and so its projects have generally escaped the foreclosure blight that easier borrowing has brought to other low-income neighborhoods in recent years.

Some IAF undertakings, such as a successful 1994 effort to have the city of Baltimore hire only contractors who paid their employees a higher-than-minimum "living wage"--a cause later picked up by ACORN in other cities--aren't likely to appeal to free-market conservatives who believe that the net effect of such measures is to increase unemployment by eliminating low-wage entry level jobs. Still, the IAF's organizational emphasis on personal responsibility and commitment cannot help but resonate. "Alinsky never tried to organize the really poor; he never tried to organize welfare mothers, who are pretty hard to organize, as you might imagine; he always focused on people who had a little but wanted more," said Skerry, whose 1993 Mexican Americans, the Ambivalent Minority told the story of Cortes and COPS.

Since the allegations of voter-registration scams surfaced in the media in September, ACORN has taken pains to distract public attention from both itself (its website blames "the right wing noise machine" for its troubles) and its connections to Obama. The effort at distancing has undoubtedly been eased by the soft spot in the hearts of many journalists for any left-of-center organization that claims to promote "social change." Pablo Eisenberg of the Chronicle of Philanthropy covered the Rathke embezzlement and wrung his hands over the fact that ACORN's "impressive group of smart, dedicated, and hard-working change agents" had gone wrong.

The question remains as to why Obama chose to forge close links with ACORN during the 1990s, when its rock-throwing style of community organizing had been a matter of public record for decades. After all, he could easily have returned to the lower-key, more centrist IAF. Not long before enrolling at Harvard Law School in 1988, Obama underwent IAF's standard eight-day training session for organizers. "I was very impressed by him," Chambers told me. "I told him that once he finished his schooling, to get back in touch with us. But he never did get back to us."

In a September 10 article in the New Republic, John Judis described what he called the "myth" that Obama had created about the centrality of community organizing to his political philosophy. Judis quoted a primary stump speech of Obama's declaring that community organizing was "the best education I ever had, better than anything I got at Harvard Law School" and implying that politics was for him simply community organizing by different means. The reality, noted Judis, after interviewing Obama's mentor during the mid-1980s--the Alinsky disciple Jerry Kellman--was that Obama had long before Harvard become disillusioned with the tedium and apparent pointlessness of trying to get toilets fixed in South Side housing projects when a career in politics that law school would make possible offered him charisma, power, and glory. Power, glory--and plenty of publicity--were also ACORN's goals and its forte.

It is not surprising that, as soon as the ink dried on Obama's Harvard degree, the future U.S. senator forgot all about Saul Alinsky and what he stood for in order to link himself to a charisma-craving group that, at least right now, seems to be giving community organizing a bad name.

- Charlotte Allen, a contributing editor to the Manhattan Institute's Minding the Campus website, is writing her doctoral dissertation in medieval and Byzantine studies.


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