Union-backed ACORN covers-up embezzlement

More ACORN stories: hereWade Rathke: here collectivism: here

ACORN moves to insulate Barack Obama from scandal

The board of a national activist group embroiled in controversy over its voter registration practices has decided to withdraw an unrelated lawsuit over claims that the founder's brother embezzled nearly $1 million, a spokesman said Monday.

Two of 51 board members of the Association of Community Organizations for Reform Now sued for access to the group's financial records. But the full ACORN board voted to withdraw the lawsuit during a weekend meeting in New Orleans, ACORN spokesman Charles Jackson said.

"The board is moving in a positive manner for a speedy resolution in the best interests of the organization," he said.

The case has set off a power struggle within ACORN at a time when its voter registration practices are the subject of fraud investigations in several states.

The lawsuit accuses ACORN founder and former chief organizer Wade Rathke of either concealing or failing to properly report that his brother Dale misappropriated $948,000 from New Orleans-based ACORN and affiliated charitable organizations in 1999 and 2000.

In the suit, board members Karen Inman and Marcel Reid claimed a small group of ACORN executives allowed the Rathke family to repay the embezzled money instead of reporting the allegations to law-enforcement authorities.

Bertha Lewis, ACORN's interim chief organizer, has said Inman and Reid didn't have the authority to sue on the board's behalf. Lewis, who didn't immediately return a call for comment Monday, also has said the suit was a distraction from responding to "Republican right-wing attacks" over ACORN's voter registration.

ACORN is accused of submitting false voter registration forms for some of the 1.3 million young people, minorities, and poor and working-class voters it has registered. The FBI has joined nearly a dozen states in investigating.

Inman said the board only had a "minuscule" discussion of the voter fraud scandal.

"We probably spent 20 minutes on it," she said.

Inman said she was one of 11 members who voted against withdrawing the suit. She couldn't say how many voted in favor of its dismissal, and Jackson refused to disclose the tally.

"The board was overwhelming on the vote to withdraw that," said Inman, adding that a proposal to remove her and Reid from the board was tabled.

Rathke, who founded ACORN in 1970, has defended the decision to keep his brother's actions an "internal matter" and resolve it with "private restitution." Reporting the case to law enforcement could have left the group at risk of financial ruin, Rathke said.

No working phone number for Dale Rathke could be found and a request by The Associated Press to contact him through his brother wasn't immediately answered.


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