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Independent ACORN Review Says Lax Governance, Rapid Growth Set Stage For Video Controversy, Lost Confidence

Harshbarger Calls For Vast Reform within ACORN, Refocus on Core Mission

December 7, 2009 (Boston, MA) An independent review of the Association of Community Organizations for Reform Now (ACORN) governance and management practices has found that systemic shortcomings – including lax oversight and governance, lost focus on its core mission and growth beyond its means - set the stage for the video controversy that erupted this year and threatened to envelop the progressive grassroots organizing and advocacy group.


The review squarely places blame on ACORN founders and credits reform leadership with making some gains in recent years to change the course of ACORN. But the report, which can be downloaded in its entirety here, authored by former Massachusetts Attorney General Scott Harshbarger, states that ACORN can only survive if its leadership embraces and executes profound governance reforms immediately.


“The serious management challenges detailed in our report are the fault of ACORN’s founder and a cadre of leaders who, in their drive for growth, failed to commit the organization to the basic, appropriate standards of governance and accountability,” said Harshbarger, senior counsel at Proskauer. “As a result, ACORN not only fell short of living its principles, but also left itself vulnerable to public embarrassment.”


“The findings of our review are neither an epitaph nor an absolution for ACORN. They are a roadmap for reform and renewal,” Harshbarger added.


Harshbarger’s complete statement can be downloaded here.


The independent review is the result of two months of research and interviews by Harshbarger and lawyer Amy Crafts working in Proskauer’s Boston, Washington and New York offices. It culminates the independent analysis requested by ACORN on September 21 in the wake of the video controversies, significant negative news coverage and lost support among some funders, allies and supporters.


The independent report makes clear that the controversy involving hidden-camera videos, which were edited before being partially released to the public, laid bare fundamental problems in the organization and structure of ACORN that date back to its founders.


Founder Wade Rathke and certain former leaders, the independent report finds, failed to understand the need for basic principles of organizational governance, accountability and compliance, in the drive to grow and succeed. As a result, the report finds, ACORN not only fell short of meeting the standards dictated by its own guiding principles, but also failed to meet the expectations and requirements of the stakeholders who supported and benefited from its advocacy and service work.


Indeed, the report notes, the video controversy was seen largely as ACORN’s “third strike” after the disclosure in June 2008 of an embezzlement cover-up, which triggered the firing of ACORN’s founder, and allegations of voter registration fraud during the 2008 election.


The video controversy erupted as ACORN leadership was attempting to execute several areas of reform. The report urges ACORN to redouble its efforts, to refocus on its core mission and issues nine recommendations meant to serve, collectively, as the path forward for the embattled organizing group.


The report recommends that ACORN:

  • Return its organizational focus to its core competency – community organizing and citizen engagement empowerment, with related services – and transition away from the provision of services that may be provided more effectively and efficiently by others.

  • Consolidate, simplify and centralize its local and national organizational staffing, monitoring and supervision.

  • Develop a simplified national organization and board structure consisting of just two entities – a 501(c)(3) for charitable, non-profit  fundraising, advocacy and education with a majority of independent members, and a 501(c)(4) for support of ACORN community organization and political activity, with at least one-third independent members.

  • Continue to implement the comprehensive internal governance program and strategy, including internal controls, compliance and codes of ethics, designed to educate and guide staff, volunteers and board members that was recommended and has been adopted within the past year.

  • Recruit an independent ethics officer and/or independent inspector general to oversee and implement the governance and compliance program at the national level, and an independent member of the national board should chair a board-level ethics and governance committee.

  • Hire an appropriately qualified and experienced chief operating and financial officer, comptroller and in-house auditing staff.  

  • Continue to strengthen its legal capacity to guide its governance reforms, coordinate the dissolution of all extraneous ACORN organizations and represent the organization’s interests in litigation and investigations.

  • Require all of its state and local affiliates to agree to oversight by the national staff and board, and to adhere to appropriate national standards, including financial audits, training and supervision.

  • Formalize a strong, independent national advisory group and charge it with the responsibility to report within six months, and thereafter annually for two years, to the national board on the progress of the reform action plan.


“Our nine recommendations are designed to rebuild the trust and credibility that ACORN must maintain to effectively and efficiently serve the hundreds of thousands of poor and powerless citizens who rely on the organization as a passionate advocate for them and their families,” Harshbarger said.


Harshbarger said it was clear that ACORN leadership and board members have the will to reform and understand the need to do so quickly and completely.


“Our experience tells us that these recommendations, acted on with a sense of urgency, are crucial to reclaim, maintain and strengthen ACORN’s ability to serve its members and constituents,” Harshbarger said. “The path toward renewal is clear but reaching the destination will require hard choices, perseverance and patience.”


David Guarino
MS&L Public Relations