Is Obama connected to the ACORN-Rathke embezzlement scandal?

Some coincidences are just too rich that you have to start drawing conclusions. Here are four facts that suggest that there might be a line between them:

  • Dale Rathke embezzled money from ACORN totalling about $950k. Apparently, commitments have been made to return about $210k, for a total of $740k still missing.
  • Barack Obama’s campaign paid ACORN, via a political consulting affiliate, $830k, but ACORN says that they only received $80, leaving $750k unaccounted for.
  • Dale Rathke embezzled this money in the period of 1999-2000, when Barack Obama was running for US Congress with the backing of SEIU Local 880 and ACORN. SEIU Local 880 is basically ACORN controlled. Rathke even filed the LM-2 form with the Department of Labor in 2000, signing it as "Treasurer", which I have previously written about.
  • Obama, ACORN, SEIU 880, and Rep. Danny Davis, appeared to act together in a number of local political engagements.

Here’s my question: Did SEIU Local 880 and/or ACORN use some or all of that embezzled money to fund operations for Obama’s Congressional race in 1999 and 2000?

Details and sourcing after the jump.

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First, the math, starting with the Rathke. According to the NYT, Rathke embezzled about $950k via a loan to an ACORN affiliate, Citizens Consulting Inc.:

The amount Dale Rathke embezzled, $948,607.50, was carried as a loan on the books of Citizens Consulting Inc., which provides bookkeeping, accounting and other financial management services to Acorn and many of its affiliated entities.

However, some money has been returned:

Instead, she said, the Rathke family has paid Acorn $30,000 a year in restitution since 2001, or a total of $210,000.

Net missing: $738,607.50. Eventually, this gap was filled, again via the NYT:

Ms. Kingsley also found that the Acorn Fund, a health care benefits fund, had advanced “a large amount of money” to Acorn, adding that it appeared that the money was used to cover “the cash shortfall caused by the embezzlement.”

Second, math on Obama. The Pittsburgh Tribune-Review reported that Obama paid Citizens Services Inc, an ACORN affiliate, $832,598.29:

According to FEC records, the Obama campaign paid Citizens Services Inc. $832,598.29, from Feb. 25 to May 17.

However, accoridng to CBS, both the Obama campaign and ACORN state that ACORN only got about $80k of that.

Obama’s presidential campaign was endorsed by ACORN’s political action committee. And Obama campaign officials acknowledged paying a group affiliated with ACORN more than $800,000 to conduct get-out-the-vote operations during the Democratic primaries in Ohio, Pennsylvania, Indiana and Texas. The campaign said $80,000 of that money went directly to ACORN.

Now, if you have a fully staffed organization, $80k is still a lot of GOTV you bought in a state. And $832k is a hugely silly amount of GOTV.

Note also that Texas is covered by SEIU 100, which we have previously shown is basically coterminus with ACORN, founded by Wade Rathke, then the Chief Organizer of ACORN. And SEIU 880 is basically an ACORN organization, which we noted in the same place. SEIU was strongly behind Obama in the primaries, so you can imagine how some of these resources went to monies controlled by the Rathke’s at these SEIU-ACORN nexuses. (nexi?)

Net: $752,598.29. Although, it is not clear that the CBS story is providing exact numbers. This number is only $20k higher than the hole in ACORN’s budget.

Note also that the hole was carried in Citizens Consulting, Inc., while the payments went to Citizens Services, Inc. Labor Pains, in a discussion of SEIU Local 880, describes Citizens Consulting, Inc., as "a legal and lobbying firm run by ACORN founder Wade Rathke".

Pittsburg Tribune Review reporter Salena Zito describes the relationship between ACORN and CSI as:

Money flows back and forth between ACORN, Citizens Services Inc., Project Vote and Communities Voting Together. ACORN posts job ads for Citizens Services and Project Vote. Communities Voting Together contributed $60,000 to Citizens Services Inc., for example, in November 2005, according to a posting on CampaignMoney.com. Project Vote has hired ACORN and CSI as its highest paid contractors, paying ACORN $4,649,037 in 2006 and CSI $779,016 in 2006, according to Terry of the Consumers Rights League.

Basically, CCI is the political consulting wing while CSI is the accounting and legal wing. The New Orleans Time Picayune describes Dale Rathke as the "comptroller" of CSI.

Now the dates. That same Times Picayune story says:

The imbroglio dates to 1999 and 2000, when the nonprofit was calling for local increases in the minimum wage and trying to unionize hospitality workers in New Orleans. Dale Rathke, the founder’s brother, was serving as comptroller through a related organization called Citizens Consulting Inc., and Lewis said he abused his authority by using the group’s credit cards to buy things that were unrelated to its work.

But we don’t know what the spending was for. In 1999 and 2000, Barack Obama was running for US Congress against Rep. Bobby Rush (D-IL). Obama’s FEC filings started 8/04/1999, with a March 2000 primary.  It would be interesting to know what those expenditures on Rathke credit cards are and whether they were in Chicago. Again, Rathke was also responsible for, at least, the filings of SEIU 880 in Chicago, which we can see from the 2000 LM-2 filings. I have been told but not able to confirm that Rathke was acting in his capacity through CCI.

Finally, any review of Chicago political history from the period between Obama’s election to the Illinois State Senate in 1996 and the primary run in 2000, will tell you that Obama was part of a network consisting of the New Party, Rep. Danny Davis, SEIU, and ACORN. For example, in April 1999, the State Chair of ACORN ran for city council seat in Chicago. ACORN’s political update said at the time:

CHICAGO, IL—Illinois ACORN state chair Ted Thomas led a field of 12 candidates in the race for 15th ward alderman on the Windy City’s southside in the February 23 municipal election. He faces the second-place finisher in a spring run-off. Endorsed by Congressman Danny Davis, the SEIU State Council, State Senator Barack Obama and the Chicago Sun-Times, Thomas is running on his record as chair of the community-labor Chicago Jobs & Living Wage Campaign that won Living Wage ordinances in Chicago and Cook County last summer after two years of opposition by Mayor Daley.

National Review’s Stanley Kurtz has shown that Obama was a member of and was endorsed by the New Party, which he describes as  "the New Party functioned as the electoral arm of the Association of Community Organizations for Reform Now (ACORN)."

So is there a connection between the nearly identically sized hole in the ACORN accounts and the peg of Obama’s investment in ACORN? We can identify the money, the means (ACORN-SEIU-Dale Rathke-CCI), the timing, and the motive. We don’t know if it happened. And we don’t know what happened to the $750k that never made it to ACORN.

It sure would be neat if some reporter asked the questions, starting with the credit card records from Rathke in 1999, wouldn’t it?