Washington post:

Internal ACORN documents show an organization in turmoil as last year's presidential election approached, with a board torn over how to handle embezzlement by the founder's brother and growing concern that donor money and pension funds had been plundered in the insider scheme.

Minutes from a meeting ACORN held in Los Angeles last summer reveal a group then on the brink of financial collapse. "Currently owe over $800k to IRS," the minutes note. "Haven't paid medical bills of over $300k. We are essentially 'broke' nationally and lots of offices are struggling."
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Some top ACORN officials tried to shield the scheme, which involved Dale Rathke, the brother of ACORN founder Wade Rathke. "Leadership has no faith in staff. Wade betrayed them," the minutes said.

The documents present a troubling picture of one of the nation's leading social justice advocacy groups, with more than 400,000 members, offices in 75 cities and an expanding international presence.

ACORN, or Association of Community Organizations for Reform Now, was founded in 1970 and is supported in part by government grants. It has forged relationships with banks, federal and state agencies, and nonprofit groups that have made it a major force in helping low-income families buy homes and in bringing marginalized voters to the polls. The ACORN political action committee endorsed Barack Obama in February 2008.

ACORN said in a statement Saturday that it has taken "decisive action" to correct problems detailed in the documents, which it said were stolen and leaked to investigators for a House oversight committee. Spokesman Brian Kettenring said ACORN has reorganized, severed its connections to Wade Rathke and "been made whole relative to the monies stolen in 1999-2000." He also said that "arrangements have been or are being made to correct all tax delinquencies."