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Boca Raton | Boston | Chicago | Hong Kong | London | Los Angeles | New Orleans | New York | Newark | Paris | São Paulo | Washington, D.C.
 
Re:
 An Independent Governance Assessment of ACORN:The Path To Meaningful Reform
To:
 ACORN Leadership
From:
 Scott HarshbargerAmy Crafts
Date:
December 7, 2009
I.
 
SCOPE OF WORKProskauer was retained by the leadership of the Association of Community Organizationsfor Reform Now (“ACORN”) on September 21, 2009 to:
 
Conduct an independent inquiry into circumstances surrounding certain videos (the“videos”) filmed by two individuals in or around July 2009 at several ACORN officelocations;
 
Evaluate the management and governance reforms that ACORN’s new leadership (the“reform leadership”) has developed since June 2008 (when news surfaced of embezzlement by a relative of ACORN’s founder, Wade Rathke) and the effectiveness of ongoing efforts to implement those reforms; and
 
Propose short- and long-term recommendations regarding ACORN management,oversight and governance.II.
 
METHODOLOGYIn order to evaluate the management and governance challenges facing ACORN, wesought to maximize our understanding of the organization in the first six weeks of our inquiry,drawing upon an extensive document review, interviews with a broad range of people and our
Memorandum
 
 
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deep experience in criminal and civil litigation, investigations, independent inquiries, ethics andgovernance. We have set forth in Appendix A our investigative methodology and work plan.III.
 
EXECUTIVE SUMMARYWe were invited by ACORN to conduct an independent analysis not just of the videosthat caused this summer’s uproar but also of the entire organization, its core weaknesses andinherent strengths. The hidden camera controversy is perceived by many as a third strike againstACORN on the heels of the disclosure in June 2008 of an embezzlement cover-up, whichtriggered the firing of ACORN’s founder, and the allegations of voter registration fraud duringthe 2008 election, done in collaboration with Project Vote.
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It erupted just as ACORN’s reformleadership was about to complete an ambitious and professionally directed organizational andcultural transformation designed to revisit its mission, reshape its scope and charter, and meetsquarely its legal, governance and compliance responsibilities.The serious management challenges detailed in our report are the fault of ACORN’sfounder and a cadre of leaders who, in their drive for growth, failed to commit the organizationto the basic, appropriate standards of governance and accountability. As a result, ACORN notonly fell short of living its principles but also left itself vulnerable to public embarrassment.This hidden camera controversy is an apt example. While some of the advice and counselgiven by ACORN employees and volunteers was clearly inappropriate and unprofessional, we
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Proskauer was not retained to investigate allegations of fraud relating to Project Vote, an associated but separateentity which helped 1.2 million low-income people register to vote prior to the 2008 election. These efforts cameunder scrutiny due to the size of the voter registration effort, and the fact that certain registration cards secured byACORN employees and volunteers contained bogus names. Higher ranking ACORN officials maintain that therequirements of the law were followed – they reviewed each voter registration card prior to submitting it to variouslocal city/county election offices and secretaries of state, and notified those authorities of any suspicions of fraudulent activity. Several U.S. attorneys found no legal basis upon which to investigate ACORN’s voterregistration efforts.
 
 
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did not find a pattern of intentional, illegal conduct by ACORN staff; in fact, there is no evidencethat action, illegal or otherwise, was taken by any ACORN employee on behalf of thevideographers. Instead, the videos represent the byproduct of ACORN’s longstandingmanagement weaknesses, including a lack of training, a lack of procedures, and a lack of on-sitesupervision.ACORN’s current leadership understands full well what must be done. If nothing else,the organization’s recent crisis and turmoil has educated its leadership and staff about theimportance of prevention.With our recommendations in hand, ACORN now has a roadmap for reform. Ourexperience tells us that these recommendations, acted on with a sense of urgency, are crucial toreclaim, maintain and strengthen ACORN’s ability to serve its members and constituents.The following nine (9) recommendations, discussed in detail in Section VII, are neitheran epitaph nor an absolution for ACORN, but are a roadmap to reform and renewal, if implemented in their entirety in concert with other measures to regain the public’s trust.1.
 
ACORN should return its organizational focus to its core competency –community organizing and citizen engagement empowerment, with relatedservices – and transition away from the provision of services that may beprovided more effectively and efficiently by others.2.
 
ACORN should consolidate, simplify and centralize its local and nationalorganizational staffing, monitoring and supervision.3.
 
ACORN should develop a simplified national organization and boardstructure consisting of just two entities – a 501(c)(3) for charitable, non-profitfundraising, advocacy and education with a majority of independent members,
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