Rotten ACORN exposed

Related ACORN stories: here
More union embezzlement stories: here

Barack's voter-fraud group defrauded by founders

A prominent national nonprofit group is reeling from public disclosures that large sums of money were embezzled by an employee and a former employee. The group, ACORN, one of the country’s largest community organizing and voter-fraud groups, has dealt with the problems quietly, until now.

ACORN is a bad seed

Acorn chose to treat the embezzlement of nearly $1 million eight years ago as an internal matter and did not even notify its board. A whistle-blower forced Acorn to disclose the embezzlement, which involved the brother of the organization’s founder, Wade Rathke.

The brother, Dale Rathke, embezzled nearly $1 million from Acorn and affiliated charitable organizations in 1999 and 2000, Acorn officials said, but a small group of executives decided to keep the information from almost all of the group’s board members and not to alert law enforcement. Dale Rathke remained on Acorn’s payroll until a month ago, when disclosure of his theft by foundations and other donors forced the organization to dismiss him.

“We thought it best at the time to protect the organization, as well as to get the funds back into the organization, to deal with it in-house,” said Maude Hurd, president of Acorn. “It was a judgment call at the time, and looking back, people can agree or disagree with it, but we did what we thought was right.”

The amount Dale Rathke embezzled, $948,607.50, was carried as a loan on the books of Citizens Consulting Inc., which provides bookkeeping, accounting and other financial management services to Acorn and many of its affiliated entities.

Wade Rathke said the organization had signed a restitution agreement with his brother in which his family agreed to repay the amount embezzled in exchange for confidentiality.

Wade Rathke stepped down as Acorn’s chief organizer on June 2, the same day his brother left, but he remains chief organizer for Acorn International L.L.C.

He said the decision to keep the matter secret was not made to protect his brother but because word of the embezzlement would have put a “weapon” into the hands of enemies of Acorn, a liberal group that is a frequent target of conservatives who object to its often strident advocacy on behalf of low- and moderate-income families and workers.

Wade Rathke said he learned of the problem when an employee of Citizens Consulting alerted him about suspicious credit card transactions. An internal investigation uncovered inappropriate charges on the cards that led back to his brother.

“Clearly, this was an uncomfortable, conflicting and humiliating situation as far as my family and I were concerned,” he said, “and so the real decisions on how to handle it had to be made by others.”

The executive director of New York Acorn, Bertha Lewis, who has been named director of an interim management committee set up to run the national group’s day-to-day operations, said Dale Rathke was paid about $38,000 a year but that none of that money was used to pay back Acorn.

Instead, she said, the Rathke family has paid Acorn $30,000 a year in restitution since 2001, or a total of $210,000.

A donor has offered to give Acorn the rest of what the Rathkes owe, and an agreement to that effect should be finalized in coming days, Ms. Lewis said.

“Now that this is under our watch, we are putting financial auditors in place, legal counsel in place, a strong management team in place to make sure this organization moves forward for another 38 years,” she said. “I will not allow and the board will not allow something like this to happen again.”

But the fact that most of the handful of people who did not disclose the fraud when they learned of it eight years ago still work for Acorn or its affiliates concerns many of the group’s financial supporters.

“We’ve told them that when the process is ended, we’ll have a look at it,” said Dave Beckwith, executive director of the Needmor Fund, which has given money to some of Acorn’s charity affiliates for at least 10 years and was contacted by the whistle-blower in May.

Representatives of some 30 foundations and large donors have been discussing the matter on conference calls and may establish a committee to monitor Acorn’s overhaul of its management and accountability systems.


Organized labor's crime-wave epidemic

More union embezzlement stories: here

Fed watchdog backs up sorry local law enforcement

So far this fiscal year, the U.S. Department of Labor has 59 convictions and 76 indictments, with most cases involving the embezzlement of union members' money. The federal agency’s Office of Labor-Management Standards investigates reports of fiscal irregularities with union funds and other potentially criminal behavior, such as election fraud.

In April, the agency’s enforcement office gained 15 criminal convictions or guilty pleas nationwide – all of which involved some form of theft of union funds. In the same month, the office had five indictments for theft or embezzlement of union money, including the charges against Richard Vincent, former treasurer of the union at the federal prison in Loretto, PA.

Other charges filed nationwide at the same time, according to the U.S. Department of Labor, include:

• A former secretary of Ironworkers Local 709 in Georgia was charged with embezzling $51,684.

• A former president of Steelworkers Local 1-962 in Ohio was charged with the theft of $770.

• A former secretary of Bakery, Tobacco and Grain Local 482 in Florida was indicted for embezzling more than $17,000.

• A former financial secretary of Steelworkers Local 9349 in Minnesota was charged with theft of funds by false representation in excess of $2,500.

Of the five cases, two were filed in federal courts and three – including charges against Vincent – were filed in county courts.

In the seven Department of Labor sentencings in April, penalties included restitution and supervised probation ranging from one to five years.

Only one sentence included jail time, and that was for one day. Another sentence included home confinement for six months, according to agency reports.


Feds nail gov't-union official for embezzlement

More union embezzlement stories: here

Plentiful union dues, loose controls attract criminal element

The former treasurer of the union that represents federal prison guards at the Federal Correctional Institution in Loretto (PA) has been charged with embezzling $43,794 since 2005. Richard J. Vincent, 43, of the 1800 block of Seventh Avenue, Altoona, is charged with two counts of theft by failure to make required disposition of funds.

Vincent, who waived the charges to county court at a preliminary hearing before District Judge Charity Nileski, is free on recognizance bond.

Neither Vincent nor his attorney, Richard Corcoran of Ebensburg, could be reached Tuesday for comment.

The charges are the result of an investigation by the U.S. Department of Labor and the Cambria County district attorney’s office.

They cap a more than two-year probe of finances at the Loretto prison guards’ union, Local No. 3951, American Federation of Government Employees.

Court documents accuse Vincent, then treasurer of the union, of writing $20,105 in checks written to cash, and of writing $23,689 in checks to merchants or other vendors for his own purchases.

In all, Vincent wrote 62 unauthorized union checks, court documents say.

Prison spokeswoman Ruth Bracken declined comment and would not say when Vincent last worked at the facility.

“We cannot say when or how long he worked here, and we cannot comment on whether there is any internal investigation,” she said. “We cannot provide any comment at all.”

Although the charges resulted from a federal investigation, they are being tried in county court.

Cambria County District Attorney Patrick Kiniry said that isn’t unusual.

“Our state statutes are right on point for the charges being made, which is failure to make the required disposition of funds,” Kiniry said.

“That is easier to prove in county court than it would be in a federal court, and that’s why I agreed to it.”

Workers at the Loretto prison had been told since 2006 that union finances were the subject of a federal investigation, and many feared missing funds and other irregularities.

Last year, the Loretto prison union’s fiscal reports for 2005 and 2006 remained unfiled with the U.S. Department of Labor, and federal officials remained tightlipped, as did local union officials.

In court documents, Cambria County detectives Thomas Moore and Gary Makosy said they were assigned to the federal investigation of misappropriation of funds from the union.

They said the investigation found that Vincent, as treasurer of the union, wrote the unauthorized checks.

When interviewed by federal investigators, Vincent admitted to the transactions, the county detectives said in their charging documents.

The case is pending in Cambria County Court.

Prison facts

What: The Federal Correctional Institution in Loretto, a low-security prison on Route 276 just outside Loretto, with an adjacent minimum-security camp.

Capacity: 1,430 male inmates.

Staff: 235, 153 of whom are listed as union members.

Union: The American Federation of Government Employees, Local 3951, represents the guards there.


Writers can't get over costly strike

Denver-area mayors disagree on worker-choice

More worker-choice stories: here

Many pols fear offending union officials

Most of the mayors in the Denver area oppose the competing management vs. labor initiatives looming for the November ballot, but they can’t agree on a common language on which to voice their disagreement. The informal deadline for an agreement among members of the Denver Mayor’s Caucus is this week. Centennial Mayor Randy Pye has taken one last stab at compromise language he hopes will let the 38 metro mayors stand united in opposition to the initiatives.

If the mayors agree, they’ll join several metro Chambers of Commerce in declaring that Colorado will be better off with no changes in labor laws — neither those abhorred by unions nor those abhorred by employers.

“I know that most of you adhere to the position that our economy, our region and our state stand to be the loser in this ideological battle no matter which side of the issue your loyalties lie,” Pye wrote to his fellow members of the Metro Mayors Caucus late last week.

“Unfortunately, the race to the ballot by the labor and Right to Work proponents, which is being described as Mutually Assured Destruction, appears to be one of the rare issues where we have not been able to find common ground.”

The Colorado Association of Commerce and Industry backs Amendment 47, which would ban “closed shops,” which are workplaces at which all employees must contribute part of their salaries to support the unions who negotiate wages for them.

In what looks like retaliation, unions threatened to place on the ballot initiatives that would make it harder for managers to fire workers and to mandate that they give them cost-of-living increases, among other measures.

About the time the Denver Chamber of Commerce let it be known that it would oppose Amendment 47, the unions agreed to abandon their efforts to get some of their more controversial initiatives on the ballot.

Still, they’re continuing to collect signatures for an initiative that would require employers with more than 20 workers to provide a plan for major medical coverage.

The Denver Chamber, while opposing the Right to Work initiative that the unions loathe, said it will devote its time to defeating any pro-labor initiatives that make the ballot.

Employers say any pro-labor initiatives approved by Colorado voters will send a signal that the state isn’t friendly to businesses looking to relocate here.

Workers say bosses have been crying wolf for years, and it’s crucial that workers protect themselves in the face of eroding health benefits and other ominous signs.

Those who hope that all the measures on both sides of the divide will disappear, or at least are defeated, point to the state’s unique Colorado Labor Peace Agreement.

The 1943 pact requires an employee vote before a workplace can go union, and, in the absence of laws banning “closed shop” workplaces, is seen by many as a good leveler of union and management clout.



Privatization seduces supervisor

More privatization stories: here

SEIU will serve justice to incumbent

This isn't the first time it's happened. Most politicians break promises. That's the nature of politics. But when someone signs a pledge — twice — saying he won't privatize city services, when he holds himself out as a champion of anti-privatization and then goes directly against that stand —well, it kind of makes you wonder.

That politician is San Francisco Sup. Jake McGoldrick. In the past, he stood against privatizing services. He has fought for golf courses, for the Internet; heck, he even fought for horses when Mayor Gavin Newsom threatened to privatize the stables. During the Service Employees International Union endorsement process, he signed a pledge that he would not privatize work currently done by city workers. We endorsed him and even fought against the effort to recall him. But when the rubber hit the road for people, he screeched out of there.

Newsom has proposed contracting out the work of the Institutional Police, a group of workers represented by SEIU Local 1021. Institutional police officers work primarily at San Francisco General and Laguna Honda hospitals, but they also provide security at health clinics throughout the city.

That security — not only for the workers, but for the community that these institutions serve as well — might soon be gone.

If you have ever been in SF General's emergency room during a violent incident, you know exactly how bad a decision that would be. A nurse who met with McGoldrick described how bad it got on her shift one night. A man who had been shot was being transported to the ER, and the shooter was following closely behind, hoping to finish off the job. When the victim and assailant pulled up to General, the institutional police were there waiting with guns drawn. They disarmed the shooter and arrested him.

The nurse who told this story looked McGoldrick squarely in the eye and told him that the community would know immediately when the ER was staffed by private security officers, and that would endanger the workers and the patients there.

Even the union that represents the private security officers — whose members would get the jobs — told McGoldrick the work should remain with the institutional police.

Training for private security officers is minimal and inconsistent. Turnover is rapid. When private security officers are transferred to new buildings, they're often not trained on its specific emergency procedures. There is little oversight to enforce existing state training requirements.

This shouldn't be about money. A couple of weeks ago, during public hearings on the budget, the Controller's Office reported on the exponential growth of six-figure salaried executive positions in the past few years; 55 new management jobs were created this year alone. McGoldrick, who heads the Budget and Finance Committee, could easily have moved some of that money around, as SEIU 1021 advocated, rather than leave the city's health care facilities at risk. But he didn't.

Unfortunately, it only takes one bad incident to expose the false "savings" of contracting out security to inexperienced and less-trained guards. Six supervisors appear to agree. What happened to Jake McGoldrick?

- Robert Haaland


Teamsters, ALPA to take a dues hit

Airlines enter retrenchment

Regional airline Comair said Tuesday that it expects to cut about one-fifth of its pilots and flight attendant jobs beginning this fall as part of parent Delta Air Lines Inc.'s overall cost reductions in response to high fuel costs. Erlanger, Ky.-based Comair announced in January that it would ground up to 14 50-seat jets this year and fly fewer hours as part of Delta's cuts. Comair has said that it plans $35 million in cuts this year.

The airline already has reduced non-crew staff since the beginning of the year by more than 6 percent, and Comair spokeswoman Kate Marx said Tuesday that the pilot and flight attendant staffing also will have to be adjusted with the grounding of the 14 planes by year end.

"We are still operating those aircraft during the summer based on customer demand, but our flight schedule changes dramatically in September," Marx said Tuesday.

Comair said it's initial estimate for the planned cuts is 300 pilot positions and 220 flight attendant positions. Comair has 1,477 pilots and 940 flight attendants.

Comair President John Selvaggio said in the memo to employees Monday that he has met with representatives of the flight attendants and pilots unions to begin talks on ways to lessen the impact on the flight crews.

"As we have done with other work groups, we will do everything possible to provide voluntary choices for our affected pilots and flight attendants," Selvaggio said.

Union leaders say they are discussing options with the company such as voluntary furloughs and early retirement packages to avoid layoffs.

"The need for reduction in jobs is unfortunate, but we are trying to lessen the negative impact by creating voluntary options," said Connie Slayback, president of Local 513 of the International Brotherhood of Teamsters that represents Comair flight attendants.

She said the union also has increased the number of part-time positions allowed for flight attendants from 100 to 300.

Mark Cirksena, chairman of Air Line Pilots Association local chapter's master executive council, said specific options for the pilots have not been determined, but also could include alternatives such as early retirement.

Comair's main hub is at the Cincinnati/Northern Kentucky International Airport in Hebron, Ky., near Cincinnati. The subsidiary of the Atlanta-based Delta has 6,300 employees and operates 669 flights a day to 86 cities in the United States and Canada.


Gov. takes sides in FOP raid v. AFSCME

'The Governor shouldn't choose unions'

A battle is on for state workers and who should represent them. The Fraternal Order of Police is working hard to represent thousands of state workers, but the group has to get a "yes" vote in order to do that. The FOP held a rally Monday afternoon near the State Penitentiary in Eddyville, Kentucky and plans similar rallies in the next few weeks. In the end, whatever happens will effect thousands of state workers. The question now is who should be allowed to represent those state workers? The FOP says it wants the job and state employees should have the final say.

Monday's gathering was a small group, but they represent major changes for thousands of Kentucky's state workers. The FOP wants to be the union voice for many state employees. That's something Corrections Officer Melissa Noel says can't come soon enough. "We are one of the lowest paid states and I think that needs to change. We work hard for what we do and have people that need the money," Noel says.

Right now, Corrections Officers as well as workers with Fish and Wildlife, Kentucky Vehicle Enforcement, Alcohol and Beverage Control and Juvenile Justice are represented by the American Federation of State, County and Municipal Employees or AFSCME.

The union was put in place with the start of the Governor's Employee Advisory Council by then Governor Paul Patton back in 2001. Ernie Fletcher's Administration got rid of the Council. Now, Governor Steve Beshear officially brought it back.

Local FOP President Larry Bland says the governor shouldn't choose unions for the state's workers. "We've been here. We know what it's all about," Bland says. "They know what we're going though. Someone that hasn't done the job has no idea how to represent us not really," says Noel.

The FOP hopes to get enough people like Melissa Noel to sign these cards of interest so the FOP's name can be put on a ballot and state workers decide for themselves who they think should represent them.

Governor Beshear's action took effect July first of this year. The FOP has until the end of August to get about 30 percent of states labor staff to sign cards of interest, that's about 1500 people.


ACORN workers upset

Related Posts with Thumbnails