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I. Executive Summary
We should be unfaithful to ourselves if we should ever lose sight of the danger to our liberties if anything partial or extraneous should infect the purity of our free, fair, virtuous, and independent elections.President John Adams, Inaugural Address, 1797
The Association of Community Organizations for Reform Now (ACORN) has repeatedlyand deliberately engaged in systemic fraud. Both structurally and operationally, ACORNhides behind a paper wall of nonprofit corporate protections to conceal a criminalconspiracy on the part of its directors, to launder federal money in order to pursue apartisan political agenda and to manipulate the American electorate.Emerging accounts of widespread deceit and corruption raise the need for a criminalinvestigation of ACORN. By intentionally blurring the legal distinctions between 361tax-exempt and non-exempt entities, ACORN diverts taxpayer and tax-exempt moniesinto partisan political activities. Since 1994, more than $53 million in federal funds havebeen pumped into ACORN, and under the Obama administration, ACORN stands toreceive a whopping $8.5 billion in available stimulus funds.Operationally, ACORN is a shell game played in 120 cities, 43 states and the District of Columbia through a complex structure designed to conceal illegal activities, to usetaxpayer and tax-exempt dollars for partisan political purposes, and to distractinvestigators. Structurally, ACORN is a chess game in which senior management isshielded from accountability by multiple layers of volunteers and compensatedemployees who serve as pawns to take the fall for every bad act.The report that follows presents evidence obtained from former ACORN insiders thatcompletes the picture of a criminal enterprise.
First, ACORN has evaded taxes, obstructed justice, engaged in self dealing, andaided and abetted a cover-up of embezzlement by Dale Rathke, the brother of ACORN founder Wade Rathke.
Committee investigators have established that a violation of corporate duties led to grossabuses of tax laws and other federal regulations. According to documents obtained frominsiders, ACORN was made aware of its lax management structure but chose to ignorethe problems and continue a cover-up of criminal activity. By refusing to report DaleRathke’s embezzlement of $948,607.50 as an excess benefit transaction, ACORNappears to have violated the Internal Revenue Code. ACORN’s cover-up of theembezzlement for more than eight years would also constitute obstruction of justice.
Second, ACORN has committed investment fraud, deprived the public of its right tohonest services, and engaged in a racketeering enterprise affecting interstatecommerce.