La. attorney general, ACORN differ over embezzlement amount; prosecutor investigating

La. prosecutor probes ACORN after embezzlement

NEW ORLEANS — Louisiana’s attorney general said Tuesday he has stepped up an investigation into embezzlement at ACORN nearly a decade ago, but the prosecutor and community activist group clashed over how much money was taken.

Louisiana Attorney General Buddy Caldwell claimed the figure was $5 million, but ACORN said the sum hadn’t changed from slightly less than $1 million.

ACORN said its chief executive officer estimated it could cost up to $5 million to “get everything together” in the aftermath of the embezzlement, but the group’s leaders claim only $948,607 was stolen.

The prosecutor’s new figure was reported in a subpoena filed last week. He was seeking information from a company that provided bookkeeping, accounting and other financial management services to ACORN.

ACORN said Caldwell was basing the $5 million figure on remarks Chief Executive Officer Bertha Lewis made during an October 2008 board meeting.

“The $5 million figure was an off-handed remark by Bertha as a worst-case scenario for what it could potentially cost to get everything together,” ACORN President Maude Hurd said in a statement. “Lawyers, accountants and consultants were quite expensive, and the board needed to know that. Bertha’s remarks have since been taken out of context.”

The Association of Community Organizations for Reform Now, commonly known as ACORN, has been reeling since a hidden camera captured the group’s employees giving a couple posing as a pimp and prostitute advice about how to lie about the woman’s profession to get financial help for housing and about how to smuggle girls into the country to be hookers.

The videos became a national sensation and conservative rallying cry. Day after day, new footage was released on a different ACORN office — the initial splash from a visit in Baltimore, then Washington, D.C., Brooklyn, San Bernardino, Calif., and San Diego.

The fallout was swift for an organization that long has been a target of conservatives, who’ve cited charges including voter registration fraud and misuse of public money.

ACORN last year settled an internal dispute and a lawsuit involving accusations that Dale Rathke, a brother of the group’s founder, made nearly $1 million in improper credit card charges in 1999 and 2000. The Rathke family and a donor have repaid the money and no charges were ever brought.

Caldwell’s subpoena said the exact amount was unknown until the 2008 board meeting. Caldwell said he wanted ACORN’s financial records to determine if the money was public or private.

“The only question is whether some of that money was classified as expenses, or trips, or this, that and the other, and wasn’t actually stolen. There may be some question as to whether it was $3.5 (million), $2.8 (million), it’s more than a million,” Caldwell said.

Once he sees the records, Caldwell said he would then determine if anyone can be charged.

“We’re not going to take their word for anything,” he said. “We’re going to take their records and let the records speak for themselves.”

The subpoena requested documents from Citizens Consulting Inc., which assisted ACORN, and from various accounting and legal consultants in New Orleans.

Dale Rathke’s brother Wade, who founded ACORN, could not be reached immediately for comment. His wife, Beth Butler, said he was in Thailand on Tuesday for work.

Butler claimed the $5 million figure was made up “out of thin air.” ACORN’s critics, she added, are “operating without evidence or facts here, and when that happens it’s called a smear.”

Karen Inman, one of two former ACORN board members removed last year after filing a lawsuit over the embezzlement, echoed ACORN’s account of the 2008 meeting. She recalled that Lewis said the embezzlement “generated more than $5 million worth of problems,” including the need to hire an auditor.

“I don’t remember her saying there was additional money embezzled,” said Inman, of St. Paul, Minn.

Associated Press Writer Cain Burdeau contributed to this report.