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Special Report

Citizens Consulting Inc. (CCI), the shadowy financial nerve center of the embattled radical activist group ACORN, has filed false lobbying disclosure reports with Congress, according to Ron Sykes, a former ACORN employee.

This revelation is important because, as former ACORN national board member Charles Turner said earlier this year on "The Glenn Beck Program," CCI "is where the shell game begins."

"ACORN has over 200 different entities that the money gets moved around to - for this purpose to that purpose, this organization to that organization," said Turner. "We believe the way the money has been moved around, they've been laundering money."

When former ACORN activist Ron Sykes was informed by this reporter that ACORN affiliate CCI registered him as a lobbyist, he was angry. "It's like identity theft," said Sykes in an interview. "I have no idea why they registered me. I didn't register myself and was not aware that they were doing it."

Whether this reflects ACORN's institutional carelessness or a calculated effort to deceive, the discovery throws some light on how ACORN treats its employees, moves money around the ACORN network, and deals with the federal government. Federal lawmakers have known for years about ACORN's unorthodox and possibly illegal practices, including its use of government resources to promote legislation and its extensive commingling of funds within its network of affiliates.

Former ACORN officials say these activities are controlled by the mysterious CCI, which is located in ACORN's headquarters in New Orleans. CCI handles the financial affairs of hundreds of affiliates within the ACORN network. ACORN member dues, government money, and foundation grants, are all sucked into the CCI vortex often never to be seen again.

Although CCI is registered as a nonprofit corporation in Louisiana, it does not appear to have sought tax-exempt status from the IRS. Surely it has declined to seek tax-exempt status because entities with that status have to publicly disclose financial data. This is the same approach employed by George Soros's Democracy Alliance, a piggybank for left-wing political infrastructure that is registered as a taxable nonprofit in order to prevent public scrutiny of its finances and internal affairs.

Sykes said he came to the nation's capital in 2006 as an intern for ACORN's national legislative program, working for it from April 2006 to February 2007. He said he was never a lobbyist although he did help to prepare lobbyists to meet with lawmakers and their staff on issues of interest to ACORN such as voting rights, housing programs, minimum wage laws, and predatory lending. Occasionally he went along on Capitol Hill visits, but arguing for or against specific legislation was not his job, he said.

According to forms filed under the federal Lobbying Disclosure Act by CCI, Sykes lobbied as an employee of CCI on behalf of ACORN between Jan. 1, 2006 and June 30, 2007. He is described in three disclosure forms as a "fellow." When a person ceases lobbying, the registering organization (in this case CCI) is supposed to declare this fact, but there is no indication in the online lobbying disclosure database maintained by the Office of the Clerk of the House of Representatives that CCI did so.

Sykes said he received a scholarship from ACORN to help him cover living expenses but that it was abruptly cut off months ahead of schedule in February 2007. During his internship he became curious about ACORN's financial affairs and began to ask a lot of questions about where the money was going.

"I guess they got a little irritated and the scholarship money from the ACORN executive board was cut off," Sykes said.

He found out that his internship was coming to a premature end when he received an email and a telephone call from the legendarily smooth Wade Rathke, who was then chief organizer (CEO) of ACORN. Rathke offered him thanks and told him that he did a great job. "I asked him if there were any positions open and said I'd like to stay but he said there was no funding at this time for a salary for me," Sykes said.

A former senior ACORN official contacted for this article, Marcel Reid, who was a member of ACORN's national board from October 2005 to late last year, said she and other members were unaware that CCI even did lobbying.

Legal reform advocate and lawyer Zena Crenshaw said CCI's behavior raises several red flags.

"They certainly should be segregating 501(c)(3) funds from their lobbying activities," said Crenshaw, a founding director and executive director of the National Judicial Conduct and Disability Law Project Inc. (NJCDLP). "I'm not sure how you can segregate them if the lobbyist is handling the money. I don't know how CCI can be both a lobbyist and a financial manager handling ACORN's 501(c)(3) funds."

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ACORN