State investigators seize computers, records while searching ACORN offices in New Orleans

By CAIN BURDEAU , Associated Press

Last update: November 6, 2009 - 11:56 PM

NEW ORLEANS - State investigators raided ACORN offices on Friday, taking away computer hard drives and documents as part of a probe into alleged embezzlement and tax fraud when the organization's national headquarters was based in New Orleans.

"This is an investigation of everything — ACORN, the national organization, the local organization and all of its affiliated entities, specifically as it relates to any potential violations of Louisiana law," Assistant Attorney General David Caldwell said.

ACORN staff on the scene declined to comment, but an attorney for the group said in a statement the raid was prompted by allegations that former ACORN employees had removed or altered electronic documents and may do so in the future.

Attorney Pamela Marple said ACORN was cooperating and called the raid exhaustive, saying investigators wanted "virtually every document in the possession of ACORN and any related entity."

The raid was the latest development for the Association of Community Organizations for Reform Now. Videotapes released recently showed ACORN employees offering tax advice to two people in Baltimore posing as a prostitute and her pimp. The videos led Congress and state governments to cut funding for ACORN.

State prosecutors said their probe into the New Orleans offices stemmed from allegations made last year by board members involving embezzlement at ACORN nearly a decade ago.

ACORN last year settled an internal dispute and a lawsuit involving accusations that Dale Rathke, the brother of the group's founder, Wade Rathke, made around $948,000 in improper credit card charges in 1999 and 2000. The Rathke family and a donor repaid the money and no charges were ever brought.

Last month, Attorney General Buddy Caldwell, the father of David Caldwell, said he would step up an investigation into allegations that the embezzlement may have been as high as $5 million.

ACORN said the $5 million figure was "a worst-case scenario" for what the embezzlement potentially could cost the group.

For 33 years, ACORN's national headquarters was based in New Orleans after Wade Rathke moved here in the 1970s from Little Rock, Ark., where he started the organization. The embezzlement scandal led the organization to move its headquarters to Washington, D.C., earlier this year, a move that allowed the national organization to distance itself from the Rathkes.

David Caldwell said he did not know which former ACORN employees removed the computers.

"We're going to grab the stuff, make copies," he said, "and get it all back to them so whatever entities are doing business with them are able to do so."

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Associated Press writer Janet McConnaughey contributed to this report.

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