Obama's HUD Violated ACORN Funding Ban

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Time after time, we have found that this administration cares not one whit about following basic laws. What does it mean for Congress to pass and the president to sign a law banning a corrupt organization and its affiliates from receiving federal funds? Apparently the Obama administration could care less. As you will recall, the Obama Department of Housing and Urban Development (HUD) awarded a grant of $79,819 to ACORN spin-off Affordable Housing Centers of America (AHCOA), despite the fact that Barack Obama signed the ACORN funding ban in October 2009. (And despite the fact that the organization was nailed for misappropriating taxpayer funds!)


We want to know how the HUD can justify this decision. So we filed a Freedom of Information Act (FOIA) lawsuit on August 19, 2011, against HUD to obtain records related to the department’s approval of AHCOA as an official “housing agency.”

Pursuant to our FOIA request filed on June 8, 2011, we want access to the following information:

  • Any and all records concerning or relating to the approval of Affordable Housing Centers of America (AHCOA) as a housing agency under Section 106(a)(2) of the Housing and Urban Development Act of 1968. This request includes, but is not limited to, a copy of all HUD-9900 forms and supporting documentation submitted by, or on behalf of, AHCOA, as well as all records of communication regarding AHCOA’s approval.

  • Any and all records of all applications(s) for grants submitted by AHCOA to HUD.


Judicial Watch’s FOIA request was received by HUD on June 13, 2011, (according to postal records). The agency was required to respond by July 12, 2011. This is about as narrow and simple a document request that Judicial Watch makes. But as of August 19, 2011, the date of Judicial Watch’s complaint, HUD hasn’t turned over a single document, or even indicated when a response can be expected.

AHCOA was previously known as ACORN Housing Corporation, Inc., an ACORN offshoot. ACORN filed for bankruptcy on November 2, 2010. However, as we’ve pointed out many times in this space, the organization lives on in the form of numerous state organizations and various ACORN-allied entities, such as AHCOA.

Importantly, none of these ACORN entities or spin-offs are supposed to receive federal funds! President Obama signed into law legislation known as the Defund ACORN Act on October 1, 2009, and other congressional actions that cut off most federal funds to ACORN “or any of its affiliates, subsidiaries, or allied organizations.” Following an ACORN lawsuit challenging the funding ban, the federal courts in New York upheld the constitutionality of the restrictions on August 13, 2010. In June 2011, the Supreme Court refused to hear ACORN’s appeal of this funding ban.



And yet, a Judicial Watch investigation revealed that on March 1, 2011, despite the ban, HUD announced a $79,819 federal grant to AHCOA to “educate the public and housing providers about their rights and obligations under federal state, and local fair housing laws.”

The Government Accountability Office (GAO) did issue a controversial advisory opinion in September 2010 stating that AHCOA is not an “allied” organization of ACORN and is therefore not subject to the funding ban. But this is ludicrous. The government’s own website listing federal expenditures identifies the organization receiving the $79,819 grant as “ACORN Housing Corporation Inc.,” and lists ACORN’s New Orleans, Louisiana, address. And AHCOA maintains the same board of directors, executive director, and offices as its predecessor, ACORN Housing Corporation, Inc.

The organization, whether known as ACORN Housing Corporation or Affordable Housing Corporation of America is corrupt and has no business receiving taxpayer funds. As recently as one year ago, ACORN/AHCOA was criticized by HUD’s Inspector General in two separate investigations for misappropriating funds from federal grants.

A November 8, 2010, report by the Inspector General, for instance, documented fraudulent activity by ACORN/AHCOA, finding that the ACORN front group “inappropriately expended more than $3.2 million from its fiscal years 2004 and 2005 grants for the elimination of lead poisoning in its housing program.” The misappropriation included the use of funds “not identified in its grant application’s detailed budgets,” including “campaign services” and “grant fundraising activities.”

(The GAO reported in June 2011 that ACORN and its “potentially related organizations” received over $48 million for fiscal years 2005 through 2009. Despite the 2009 ACORN funding bans, the GAO found that 11 government agencies had taken no steps to implement the bans until at least August, 2010.)

Look, there is no practical difference between ACORN Housing and this rebranded spin-off. And it should go without saying that the federal government should not grant taxpayer funds to an organization with a history of misappropriating federal funds. The ACORN groups’ close connections to Obama shouldn’t guarantee them tax money in violation of law. This grant is a violation of the ACORN funding ban law and an embarrassment for the Obama administration.

And unfortunately, here we have yet another instance of the Obama administration stubbornly refusing to respect the Freedom of Information Act and the rule of law. It seems these days that the Obama administration has opened up yet another war – a war on transparency.

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