Blowing the Whistle: ACORN 8

      Blowing the Whistle

      Get-out-the-vote efforts for the 2020 presidential campaign are already canvassing America. Absent from the scene is ACORN: the Association of Community Organizations for Reform Now. Once considered among the most successful groups of its kind, it’s now on the books as “one of the most catastrophic suicides in nonprofit history.” Today, two whistleblowers tell about the price they paid when they worked on the inside to expose corruption.

      Today, ACORN may be best known for infamous, undercover recordings...

      Man: Is it against the law in Maryland? Prostitution?

      ...made by conservative citizen journalists posing as a pimp and a prostitute.

      Woman: Dancing?

      Man: It's not dancing, trust me.

      Woman: But dancing is considered an art? You know.

      Man: Sex is kinda like dancing, right?

      Woman: Yeah.

      ACORN employees — caught on camera coaching on how to disguise illegal activities, evade taxes, and get government benefits.

      ACORN insisted the video was selectively edited— but fired the employees.

      Michael McCray: The explosion occurred when the fake pimp and fake prostitute videos came out. That's where it went really crazy with the media.

      ACORN’s real problems actually started years before, according to ACORN volunteers Michael McCray and Marcel Reid who joined the group founded by liberal activist Wade Rathke.

      Marcel Reid: We gave people in marginal communities the opportunity to believe that they could actually do something. There was a very specific formula for it. You want a crosswalk? We'll get a crosswalk painted. Every time they crossed that street, or see that mailbox, or see that light, it reinforces in them that "I did something" that you can actually see.

      But for all its good ACORN had a dark side. It was exposed when Reid was elected to ACORN’s national board and discovered embezzlement and cover-up. She turned to McCray— an attorney and accountant— to help figure it out.

      Michael McCray: We were literally finding hundreds of accounts, hundreds of organizations. People, board members, our friends, their names were on documents that they didn't know anything about.

      The fact that ACORN wasn't one group, but many organizations, made figuring out the embezzlement, all the more difficult.

      Michael McCray: There was a board meeting in New Orleans where there was a presentation about the embezzlement, and it seemed like every other meeting they would come back and report that there was more money missing.Michael McCray: It was just under $1 million when we walked in. By lunch time, it was, "Well, we found another 500,000." By dinner time, it was up to ... We reached the second million.

      It turns out Dale Rathke, the brother of ACORN’s founder, had been discovered embezzling funds eight years earlier, but it was kept secret. What’s worse, he was reportedly allowed to continue handling ACORN’s finances.

      Michael McCray: What should have happened was that anyone who benefited from the embezzlement, or anyone who knew about the embezzlement and covered it up, should have been removed. There was a battle between, "Shall we really do a full audit, or should we have an internal review or something and we say that we cleaned up the books?" The conflict was the entrenched members who had gone along with the embezzlement versus the board members who wanted to really have it cleaned up.

      Sharyl: What was the “ACORN 8”?

      Marcel Reid: Those were the eight members of the board who refused to let the embezzlement and mismanagement and malfeasance, if indeed that's what it was, go by. It was the most organized-

      Michael McCray: Resistance-

      Marcel Reid:-Resistance. They forget they had trained us. They were startled and thought that it had to be some outside influence, someone had to be funding us, or whatever. No one funded us.

      Michael McCray: This was ACORN board members doing what we were trained to do.

      Marcel Reid: This was ACORN board members doing ... Yeah.

      Michael McCray: What we know how to do.

      Marcel Reid: We were not going to stand down and allow you to destroy it and all the good work without a good heave-ho. And we gave them a good heave-ho and they're shocked, but we're organizers.

      Sharyl: About the same time, ACORN was also batting down voter registration fraud allegations left and right. Investigations in Nevada, Wisconsin, Missouri, Ohio, Pennsylvania and Indiana. Convictions in Colorado Springs, Kansas City Missouri, and King County Washington.

      Bob Edgar: The incidence of fraud, people actually coming to the polls fraudulently to vote is very small.

      ACORN had received at least $50 million in federal tax money, and endorsed political candidates such as Barack Obama. By December 1, 2009, Congress was interested.

      Rep. Ted Poe: Allegations against ACORN keep growing and growing. The more we learn about this organization, the less it looks like a grassroots community organization and the more it looks like a criminal enterprise—nationwide criminal enterprise.

      Funding dried up and ACORN declared bankruptcy in 2010. Meantime, the whistle-blowers found themselves smeared by the group they’d tried to save.

      Sharyl: What happened to you as you tried to get to the bottom of this?

      Marcel Reid: Oh, my goodness. I was attacked.

      Sharyl: By whom?

      Marcel Reid: It was ACORN staff, it was senior staff at ACORN. I was barred from going into my own building into the ACORN office here in DC.

      Michael: That was the thing that got Marcel and got me, is that the staff, the people who were supposed to be supportive of what our policies that are set by the board, they are now undermining, attacking the very board members who are trying to right the wrong, who are trying to fix the problem.

      Instead of being silenced, they decided to keep speaking out as whistle-blower advocates.

      Marcel Reid: I asked to see the books and next thing I knew I went from my ideas being good and powerful and strong and forward leaning to a pariah. Welcome to whistle-blowing.

      Today, they run an annual summit to recognize and defend whistle-blowers. ACORN eventually put the amount of embezzled funds at $5 million but refused a forensic audit. Reid and McCray say they believe ACORN lives on, running silently under different names. In fact, founder Wade Rathke declined our interview requests but is currently listed as chief organizer for a group called ACORN International where he also runs an internet radio station.

      Michael McCray: What we thought was six entities was really 300 entities. The ACORN shell went away but now you've still got ACORN international and all these other regional affiliates. They're humming right along.

      By the way, in 2008, ACORN reported that it had registered more than 1.3 million new voters in 21 states in less than two years.