Board directors at ACORN -- the Association of Community Organizations for Reform Now -- are demanding the organization turn over financial records relating to the embezzlement of nearly $1 million by the brother of ACORN's founder.
Board members Marcel Reid and Karen Inman are seeking a court order that also would sever ties between ACORN and founder Wade Rathke, The New York Times reported Tuesday. Although Rathke resigned as chief organizer, he oversees staff and expenditures, the lawsuit contends.
The court action reflects continuing turmoil at ACORN. Rathke resigned after it became public this summer that his brother, Dale Rathke, embezzled $948,607.50.
ACORN discovered the embezzlement in 2000 but did not alert law enforcement officials. ACORN's management committee, instead, negotiated an agreement to have the Rathke family pay back the stolen funds. A donor since has agreed to pay the promissory note.
ACORN will "suffer irreparable harm if defendants are not restrained from contact with employees, expending and receiving, destroying or prohibiting the review of accounting and other data necessary to fulfill the fiduciary responsibility of the interim management committee," according to the lawsuit.
The lawsuit was filed on behalf of the entire 51-member board, although some executives and board members said Reid and Inman have no authority to act on the board's behalf, The Times reported.
ACORN's Web site describes the organization as the nation's largest grassroots community organization of low- and moderate-income people. The organization operates in 110 cities across the country, including Pittsburgh.
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