David A. Keene

WASHINGTON – The non-profit organization responsible for the largest annual conservative gathering in the U.S. is under investigation for embezzlement of hundreds of thousands of dollars in donor money over several years, WND has learned.

The American Conservative Union, headed by David Keene and best known for its organization of the Conservative Political Action Conference each year in the nation’s capital, has been embroiled in controversies in recent years, but this one is shaking the foundations of the Washington institution.

The American Conservative Union reported to the Internal Revenue Service last month a “material diversion of the organization’s assets” totaling over $400,000. The group has an annual operating budget of about $1.5 million.

Read the “Manifesto” for conservatives, in “Liberty and Tyranny.”

While directors have been tight-lipped about the details, sources say Keene’s ex-wife, Diana, was fired earlier this year as bookkeeper when the misappropriations were discovered.

On its 2009 tax return, signed Nov. 8, 2010, by Executive Vice President Dennis E. Whitfield, the American Conservative Union disclosed the apparent embezzlement.

“The organization became aware in May 2010 of a diversion of assets for the year [ending] December 31, 2009,” the ACU disclosed on its 990 reports filed with the IRS. “The authorities were notified and the issue is now in the hands of the assistant U.S. attorney for the Eastern District of Virginia.”

Authorities in that office responded to WND inquiries with confirmation that there have been no charges or indictments that have resulted to date.

“I’m not aware of any public documents or charges filed,” reported spokesman Peter Carr.

Whitfield refused to discuss details with WND, saying only: “The language in the 990 speaks for itself. No further comment.”

ACU’s federal form

“It’s a $400,000 embezzlement from a major conservative organization,” a source told WND. “This is donor money. Little old ladies have been giving this money, and it’s been ripped off over the years.”

Several ACU board members used similar language in refusing to comment on the story. Board member Thomas Winter, asked for any explanation of the situation, told WND he couldn’t help.

“Not a thing,” he said.

From Morton Blackwell, it was, “No comment.”

Multiple WND messages left at ACU for Keene did not generate a response.

Diana Carr was listed as ACU’s “administrative director” as of Jan. 13, 2010. Carr’s name does not appear on ACU’s current list of executive staff. She did not respond to a WND request for comment that was sent to her e-mail.

The American Conservative Union is a tax-exempt 501(c)4 organization. It describes its mission as to “educate the public about current social, economic and political issues.”

“Founded in 1964, ACU represents the views of Americans who are concerned with economic growth through lower taxes and reduced government spending and the issues of liberty, personal responsibility, traditional values and national security,” the group says on its website.

But the ACU has been criticized within the conservative movement in recent years for its stands on “personal responsibility, traditional values and national security.”

WASHINGTON - FEBRUARY 18: Former Gov. Mitt Romney (R-MA) speaks to attendees of the 37th Annual Conservative Political Action Conference (CPAC) on February 18, 2010 in Washington, DC. Brown was introduced Sen. Scott Brown (R-MA). (Photo by Robert Giroux/Getty Images)

Earlier this year, ACU welcomed as sponsors of CPAC a group called GOProud, which bills itself as a “gay conservative” organization. Several other long-time sponsors of the conference dropped out of participation in protest. ACU renewed its invitation for the 2011 CPAC event scheduled for Feb. 10-12, but the move was met with more protests. A board of directors vote took place in November to review the decision. Reportedly the vote was split evenly on whether GOProud should be permitted participation, but no final decision has been announced publicly by ACU about GOProud’s role in the 2011 CPAC event. GOProud’s leaders support same-sex marriage and an end to the U.S. military’s “Don’t Ask Don’t Tell” policy toward service by homosexuals.

The ACU and CPAC have also been criticized by conservatives for downplaying the threat to U.S. security by Islamist terrorists – causing other groups to become disaffected.

The ACU has hosted CPAC since 1973. It has been addressed by Presidents Ronald Reagan and George H.W. Bush, along with Rush Limbaugh and other stars of the movement. Keene has served as chairman since 1984.

In addition to his role at ACU, David Keene also serves as 1st vice president of the National Rifle Association and, as such, is in line to become the powerful gun lobby’s next president.

That role caused the NRA some anguish when Keene’s son, David Michael Keene, was arrested for a road rage incident in which he allegedly fired a gun at another motorist on the George Washington Memorial Parkway. The round fired shattered the rear window of the victim’s car, lodging into the driver’s seat, coming within inches of hitting him, according to police reports.

David Michael Keene was serving as director of online communications for the ACU when his situation developed.

Court records from the Eastern District of Virginia reveal that David Michael Keene was arrested on Dec. 5, 2002, and ultimately pleaded guilty in a plea bargain. There was a “change of plea hearing” the following April, at which he withdrew a not guilty plea and pleaded guilty a single count in an indictment.

The government moved to dismiss other counts and at a sentencing hearing in July of that year, Judge Leonie M. Brinkeman ordered him to 10 years in prison with five years of supervised released afterward. His sentence includes orders to remain drug-free, participation in mental health counseling, anger management and a ban on possession of firearms, and his release date is scheduled for February 2012.

Last year, David Keene and the ACU became embroiled in yet another embarrassing scandal when they offered to become involved in a National Labor Relations Board dispute between UPS and FedEx.

The ACU asked FedEx for between $2 million and $3 million in return for the group’s support through articles written by Keene and other board members. When FedEx refused to pay, the ACU flipped and sided with UPS. Keene regularly writes a column for the Hill newspaper in the nation’s capital.

Maury Lane, FedEx’s director of corporate communications, told Politico at the time: “Clearly, the ACU shopped their beliefs and UPS bought.”

Whitfield denied the organization took any money from UPS. Whitfield said the group has never received a response to its original proposal to FedEx.

Some of the most prominent names in the conservative movement serve as directors of ACU, including: Winter, Blackwell, Ambassador John Bolton, Becky Norton Dunlop and Grover Norquist.

Note: Read our discussion guidelines before commenting.