HUD Report Slams Corrupt ACORN As Funding Ban Set To Expire For Undead Group

Citing massive irregularities and gross taxpayer funding abuses, federal investigators are recommending that government funding for ACORN’s still operating housing affiliate be cut off immediately.

Investigators must have felt it was necessary to urge the funding cutoff because the federal government’s prohibition on funding ACORN isn’t a permanent ban. It exists at the whim of lawmakers and runs out at the end of this month. This is the finding of an analysis by Capital Research Center (which has been tracking ACORN since 1998).

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Investigators may also have wanted to remind the public that ACORN is still alive. Reports of ACORN’s demise continue to be churned out by misinformed journalists who amplify the zombie group’s lies. In recent days the Washington Post incorrectly described ACORN as “a dead NGO,” and Slate said ACORN has “stopped existing.” More on this in a moment.

The Sept. 21 report from the Department of Housing and Urban Development’s Inspector General found that ACORN Housing, which changed its name earlier this year to Affordable Housing Centers of America (AHC), may have concealed fraud by destroying or failing to produce records.

ACORN violated federal rules on how grants are to be used. The group charged the government salary costs for employees after they were terminated, the report said, and violated federal procurement standards.

The report suggested ACORN corruptly funneled taxpayer dollars to its affiliates and engaged in money laundering. ACORN has taken in more than $19 million in housing counseling grants since 1995 from HUD. NeighborWorks, a congressionally chartered nonprofit, gave ACORN $25.9 million. ACORN Housing has received more than $27.3 million from other federal and non-federal sources, the report said.



The report urged HUD to force ACORN Housing to improve its record-keeping and recommended the ACORN affiliate be placed on “inactive” status while it “initiates corrective actions to address the exceptions and recommendations in this report.”

“Any organization that applies for and accepts taxpayer dollars has a responsibility to act consistently with federal law,” said Rep. Darrell Issa (R-Calif.). “It doesn’t matter if it’s ten dollars or ten thousand dollars, there is no acceptable amount of abuse or mismanagement that the federal government should tolerate when it comes to the taxpayer’s dollars.”

Issa is ranking minority member on the House Oversight and Government Reform Committee. He is expected to become chairman if Republicans win control of the House in November.

Many Americans –and some lawmakers— seem to believe Congress cut off ACORN permanently, but this belief appears to be unfounded.

This confusion about ACORN can probably be blamed in part on the quirks of parliamentary procedure and the complexity of the appropriations process. The legal language prohibiting the funding is contained in spending legislation that covers only the federal government’s current fiscal year which ends this Sept. 30. The House and the Senate first passed legislation banning funding for ACORN in fall 2009 after undercover videos showed ACORN Housing employees offering activists James O’Keefe and Hannah Giles “how to” advice on establishing a brothel, defrauding the government and banks, and evading other laws.

Mass media news reports rarely explain details of spending bills, such as when the fiscal year they cover comes to an end. But the fact that the funding ban is not permanent was noticed by ACORN lawyers and Judge Roger J. Miner of the U.S. Court of Appeals for the Second Circuit. Miner wrote the court’s opinion in August that overturned Judge Nina Gershon’s perverse ruling that the funding ban was an unconstitutional “bill of attainder” that punished ACORN without a trial.

Public Law 111-68, signed by President Obama on Oct. 1, 2009, is formally known as “An Act making appropriations for the Legislative Branch for the fiscal year ending September 30, 2010, and for other purposes.” [emphasis added] Section 163 of the Act reads: "None of the funds made available by this joint resolution or any prior Act may be provided to the Association of Community Organizations for Reform Now (ACORN), or any of its affiliates, subsidiaries, or allied organizations."

Similar de-funding language was included in other spending bills signed into law by President Obama that followed in the weeks after. All those bills covered federal spending only for the fiscal year ending Sept. 30, 2010. (See Section 427 of Public Law 111-88; Division A - Section 418, Division B - Section 534, and Division E - Section 511 of Public Law 111-117; Section 8124 of Public Law 111-118.)

Plans to extend the funding ban are in the works in Congress. Section 417 of the Transportation-HUD appropriations bill for fiscal 2011 (S.3644) would prohibit funding of ACORN in the fiscal year that begins Oct. 1, 2010. It’s very unlikely that the bill will become law by Oct. 1 but Congress may also extend the funding ban in new stopgap spending legislation – though there’s no guarantee that will happen.

Then there’s lazy reporting that may have also added to public confusion.

Most reporters uncritically accepted ACORN’s false claim to have shut down earlier this year despite abundant evidence to the contrary. ACORN said it dissolved its national structure on April Fool’s Day, yet the group continues to operate out of its headquarters in Brooklyn. Two weeks after the alleged shutdown Chief Organizer Bertha Lewis sent out a fundraising letter boasting that “ACORN is alive because you are alive and still fighting for justice.” Lawyer Arthur Z. Schwartz is still representing ACORN. He sent a letter June 9 to the Government Accountability Office (GAO) demanding changes to a report on his client.

Both ACORN operative Nathan Henderson-James and ACORN hagiographer John Atlas have admitted the shuttering of the ACORN network is a sham. Issa’s investigators also reported that Lewis has been busy consolidating and hoarding ACORN’s assets. ACORN reportedly has $10 million in property and $20 million in cash in 800 bank accounts. Like grifters who adopt new aliases in order to keep duping victims, ACORN chapters in 13 states and the District of Columbia have incorporated themselves under new names. Many of the “new” re-branded groups have the same employees and board members and addresses as the old ACORN chapters.

That’s a lot of activity for a group that’s dead.

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