Obama Administration Violating ACORN Funding Ban According to New Audit

ACORN is dead. Isn’t that what we were told after ACORN workers were caught on tape helping undercover reporters evade prostitution laws? In fact, following the media outburst that resulted from the undercover videos, President Obama himself signed into law an ACORN funding ban that included any affiliate and/or subsidiary. And the organization filed bankruptcy.

But as Judicial Watch announced in September with the release of our groundbreaking report, “The Rebranding of ACORN,” rumors of ACORN’s demise were completely fabricated. Far from defunct, the former “community organization” has splintered into difficult-to-track organizations across the country. (Former ACORN CEO Bertha Lewis calls them “bullet-proof community-organizing Frankensteins.”) And, just like their predecessors, these new ACORN spin-offs are prepared to wreak havoc on the 2012 elections.

One of those ACORN offshoots is the Affordable Housing Centers of America (AHCOA), which was previously known as ACORN Housing.

In July 2011 Judicial Watch uncovered a $79,819 grant to AHCOA. The Obama administration claimed this grant did not violate the ban because the two organizations were separate and distinct. We said the two organizations were virtually indistinguishable and the grant was unlawful.

Well, according to The Daily Caller, at least one influential non-profit organization has conducted an audit of AHCOA indicating the Obama administration operated outside the law:

A newly released internal audit appears to indicate that the Government Accountability Office and President Barack Obama’s Department of Housing and Urban Development incorrectly argued that a specific organization wasn’t ACORN-affiliated.

HUD’s office of general counsel and the GAO have both claimed that Affordable Housing Centers of America, or AHCOA, is not affiliated with the Association of Community Organizations for Reform Now, or ACORN. AHCOA formerly called itself ACORN Housing, but changed its name after the 2009 ACORN meltdown.

The Obama administration has awarded more than $700,000 in taxpayer funds to AHCOA despite a 2010 law stipulating that no taxpayer funds could be awarded to ACORN “or any of its affiliates, subsidiaries, or allied organizations.”

You can read the audit, which was uncovered by the group Cause of Action, for yourself, here.

This previously confidential internal audit report was produced by NeighborWorks America, a “congressionally chartered non-profit organization” that doles out taxpayer funds to support “community development.” NeighborWorks is one of those quasi-governmental entities that appears to be outside the scope of the U.S. government but is actually controlled in part by government officials. (The Assistant Secretary of Housing and Urban Development, for example, sits on the organization’s Board of Directors. See the rest of the board here.)

NeighborWorks “reinvested” more than $20 billion in rural, suburban and urban communities between 2005 and 2010. The organization’s network consists of 235 community organizations across the country. And it is of extreme significance that AHCOA will, now, not be among them.

NeighborWorks, unlike Obama’s Department of Housing and Urban Development, decided against distributing cash to AHCOA: “Although AHC and ACORN might be incorporated as separate entities in form and structure, the financial transactions noted below evidence extensive relationships between both organizations that may undermine claims of an ‘arm’s length relationship’ between them,” the NeighborWorks America auditors wrote.

(Of course, this is the precise argument Judicial Watch made when we uncovered the Obama administration’s AHCOA grant.)

Aside from the ACORN funding ban, there are numerous reasons why ACORN Housing/AHCOA should never be the beneficiary of American tax dollars.

Here’s one of them: A September 21, 2010, HUD inspector general report, which notes that ACORN Housing is “now operating as Affordable Housing Centers of America,” indicates the organization misappropriated funds from a $3,252,399 federal grant. The inspector general concluded that ACORN Housing/AHCOA had charged salary expenses to the HUD grant that “were not fully supported.” The organization also continued to pay its counselors even after they were terminated, did not meet federal procurement standards and allegedly destroyed documents to conceal the fraudulent activity.

Here’s another: A separate, November 8, 2010, HUD inspector general report stated that ACORN Housing/AHCOA “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.”

And as if this audit wasn’t enough bad news for ACORN, last Wednesday the press was abuzz about a new report from the Department of Justice Inspector General focusing on a New York community organization that acted as an ACORN front group several years ago. Evidently this group misused a Department of Justice grant in the amount of $138,130. According to GovernmentExecutive.com:

A New York City community organizing group that received a Justice Department grant to teach students leadership skills failed to follow requirements for documenting its spending, according to a report the Justice inspector general’s office released Wednesday….

The report also described the New York group as a “pass-through entity” for ACORN, a politically controversial neighborhood activist group that conservatives believe is a tool of the Democratic Party.

“While NYACA’s OJP-approved budget was for the allocation of grant funds to payroll and fringe benefit charges,” the report said, “we determined NYACA did not have any paid employees at the time it received the grant or at any time during the life of the grant-funded project. All of the individuals who worked on behalf of NYACA were ACORN employees. Further, the former NYACA executive director stated that she served concurrently as the executive director for both NYACA and the New York branch of ACORN.”

(The list of infractions is too long to include here. Feel free to read the full IG report here.)

Again, this is just one state-run organization. Just imagine the corruption and fraud that has occurred across ACORN’s massive national network. (Actually, you don’t have to imagine. Just read our ACORN report.)

As I said in an interview with GovernmentExecutive.com, “the fact that these groups continue to get money in violation of the law screams out for a comprehensive criminal investigation.” But don’t expect it from the Obama administration. Barack Obama’s ties to ACORN are well-documented, which is the principal reason ACORN’s spin-offs are handed tax dollars instead of subpoenas.