Federal Grand Jury Seeks Information from ACORN

Story filed by the Pelican Institute’s Steve Beatty:

Amid the paperwork associated with a search warrant served on ACORN’s New Orleans headquarters Friday is a one-sentence acknowledgement by the embattled activist group’s attorneys that it is has been subpoenaed by a federal grand jury.

“Regarding the federal grand jury subpoenas, ACORN does not object to the provision of information and documents to the federal government…” reads a letter from Abbe David Lowell of the Washington law firm of McDermott, Will & Emery.

The letter was included in court filings from ACORN explaining the legal basis for why they weren’t complying with a subpoena issued by Louisiana Attorney General Buddy Caldwell, which seeks a wide range of accounting information regarding the group’s many affiliated agencies.

Lowell disclosed the federal investigation as he was writing to a New Orleans lawyer representing ACORN’s local outside accountants. The accounting firm of Duplantier, Hrapmann, Hogan & Maher was served with a subpoena from Caldwell, and, apparently, at least two from federal officials. In the letter, Lowell said ACORN was asserting accountant-client privilege, which is recognized in Louisiana, but not at the federal level.

Neither Lowell nor William Wright of the New Orleans firm of Deutsch, Kerrigan & Stiles, to whom the letter was sent, returned calls for comment regarding the federal subpoenas. An official with the office of Jim Letten, the U.S. Attorney for the Eastern District of Louisiana, said the office couldn’t confirm nor deny any investigation. The letter from Lowell does not make clear where the grand jury was convened.

After learning ACORN was not going to comply – and hearing that two former ACORN employees had cleared their offices of everything, including computers – Caldwell’s office executed a search warrant Friday and seized more than 100 computers and other records from the activist group’s New Orleans headquarters.

“We were not in the mood to sit around and wait a whole long time,” said David Caldwell, the assistant attorney general over Public Corruption and Special Prosecutions and son of the attorney general. “Now we don’t have to worry about anything walking off…unless it’s already gone.”

As he spoke outside the ACORN headquarters at 2609 Canal St., investigators inside continued to load up scores of seized desktop and laptop computers, as well as other evidence. Caldwell said his office would copy the hard drives and return the computers to ACORN, perhaps within a week.

He said attorneys representing ACORN alerted him to the fact that two employees, whom he did not identify, removed computers from the offices. ACORN national officials recently fired longtime local ACORN leader Beth Butler, the common-law wife of ACORN founder Wade Rathke.

Caldwell credited ACORN and its attorneys for calling the computer removals to his attention and said they acted in good faith. Still, the search warrant was necessary, Caldwell said, because “they can’t watch everybody.”

Armed investigators in SUV’s arrived about 8 a.m. at the organization’s headquarters at 2609 Canal Street. By 2 p.m., they had loaded four vehicles with computer hardware. Caldwell spokeswoman Tammi Arrender said ACORN employees were polite and cooperative with officials, though they were irritated by the presence of reporters and news media cameras.

The attorney general has been investigating the national activist groups since June on allegations of payroll tax fraud, covering up an embezzlement, and mismanaging a retirement fund, among other things.

The attorney general has already served subpoenas on the former head of ACORN, Rathke, whose brother is alleged to have improperly charged at least $1 million to ACORN-related credit cards. Whitney Bank and the accountants have also been hit with subpoenas.

Rathke and his brother, Dale, who worked on the financial side of the house, were ousted from their positions with the primary ACORN organization, though Wade Rathke continues to work with an international offshoot.

Buddy Caldwell made headlines nationally recently when he said in court documents that Dale Rathke might have embezzled up to $5 million, though ACORN officials have disputed that amount. ACORN CEO Bertha Lewis has said that figure was cited as the amount needed to clean up the mess created by the Rathke brothers, not the amount taken and later repaid.