Justice Dept. IG Uncovers Grants to ACORN Affiliates

ACORN leadersThe Association of Community Organizations for Reform Now, more commonly known as ACORN, has earned its notoriety. The New Orleans-based far-Left nonprofit network has been implicated in embezzlement, tax evasion, voter registration fraud and other criminal activity. In response, Congress, the Census Bureau and the IRS each have decided to cut off ACORN funding. The U.S. Department of Justice (DOJ) may or may not join them, but an audit issued this month by its Office of Inspector General isn’t likely to help the group’s case. The audit, conducted at congressional behest, examined the size and nature of DOJ funding to ACORN and/or affiliated organizations. Researchers concluded that while ACORN received no direct grants during fiscal years 2002-09, one affiliate did receive a direct award and on four other occasions either ACORN or an ACORN affiliate received a subcontractor award from a non-ACORN grantee. The five actual or scheduled disbursements totaled about $200,000. Additionally, ACORN affiliates on five other occasions were denied funding requests.

It’s not as if ACORN can plead poverty. The group and its vast, overlapping network of 360 subsidiary and affiliated organizations, now takes in roughly $100 million annually from all sources. The ACORN combine has received $53 million in federal funds during the last 15 years mainly in the form of grants from the Department of Housing and Urban Development to ACORN Housing Corp. Though the Justice Department appeared to have been a piker in comparison, several members of Congress, led by House Judiciary Committee Ranking Republican Rep. Lamar Smith, R-Tex., wanted no stone unturned. This September, they asked Inspector General Glenn A. Fine to investigate how much DOJ money ACORN received and for what purposes. “It is clear that ACORN has fostered a culture of corruption,” Smith remarked. “With investigations of ACORN now occurring in 20 states, it is time for the FBI to open up a full-scale investigation into possible criminal conduct by ACORN.” Two months earlier, House Oversight and Government Reform Committee staffers, spearheaded by Rep. Darrell Issa, R-Calif., released a report concluding ACORN had been operating as a racketeering enterprise.

The DOJ audit was a top-to-bottom affair. The Inspector General’s Office combed through extensive records of the department’s grant-making agencies. It also conducted searches of outside sources to locate potential “hidden” grants to ACORN or its affiliates, consulting such sources as trademark data, websites, state corporate records, and IRS Form 990 submissions. Researchers came up with five separate cases of indirect ACORN funding:

New York Agency for Community Affairs, Inc. (NYACA). This misnamed New Orleans-based entity for years has served as a financial agent for ACORN. It also has received substantial funds from the Justice Department. The IG audit showed that in fiscal year 2005, NYACA received an earmarked grant of $138,130 to provide youth leadership training to students at selected schools in New York City, form “ACORN Youth Union” chapters, and coordinate student campaigns to address various school-related issues. It’s clear that ACORN is intent on creating a new generation of political activists.

Citizens Committee for New York City (CCNYC). This nonprofit organization during fiscal year 2008 received an earmarked Justice Department grant of $290,663 to run a Crime Stoppers program in New York City. One of its 21 subcontractor organizations was ACORN, which was slated to receive $20,000 to promote neighborhood safety. As of November 12, however, ACORN had not received the money because it had not submitted a reimbursement request for costs that lay outside the scope of the agreement. CCNYC currently is awaiting documentation.

Weed and Seed – St. Louis. An ACORN affiliate, the ACORN Institute, Inc., in FY 2007 received a $13,000 sub-award from a $200,000 Justice Department grant to Operation Weed and Seed – St. Louis, Inc. The purpose of the funding was to canvass designated St. Louis-area neighborhoods to recruit community activists to participate in activities related to Weed and Seed, a nationwide urban crime prevention program begun by the Justice Department in 1991.

Weed and Seed – Phoenix. The City of Phoenix, Arizona in FY 2009 entered into a sub-agreement with the ACORN Institute to provide the institute with $8,539 from a $150,000 Weed and Seed grant. The purpose of the funds is to canvass residents and increase awareness of the Earned Income Tax Credit and free tax preparation services for residents of eligible neighborhoods. As of mid November, however, the city had not disbursed any of the money to the ACORN-related subcontractor because of reporting deficiencies by the institute related to a separate non-DOJ grant. Indeed, the City of Phoenix was planning to convince the program steering committee to terminate the award.

National Training and Information Center (NTIC). This Chicago-based nonprofit group, founded in the Seventies to combat alleged mortgage “redlining” by banks, entered into a $20,000 sub-award agreement in FY 2002 with an ACORN affiliate, the American Institute for Social Justice (AISJ). The grant was part of a program called the Community Justice Empowerment Project. This larger congressional earmark grant to NTIC would provide training, technical assistance and funding to community organizations for crime prevention, substance abuse prevention, and neighborhood revitalization. The AISJ did receive its full share, but neither it nor NTIC was able to account for how the institute used the money. A separate IG audit in 2008 had determined that NTIC did not provide sufficient oversight of its three dozen sub-grantees.

The situation could have been more problematic had five applications by ACORN-related entities not been turned down. Four of the grants had been submitted by the ACORN Institute, Inc. for a combined slightly over $1 million; the other, for an unspecified sum, came from ACORN Housing Corporation. By far the largest of the ACORN Institute grant applications was for $790,087 in FY 2009 through the DOJ’s Office of Justice Programs (OJP) Recovery Act. The money would have gone to combat mortgage foreclosure fraud in Washington State, especially in the Seattle-Tacoma metro area. The documented reason for the denial was that the “competitive process selected other applicants.”

As for the money that has been disbursed by DOJ (if not necessarily spent), nobody will dispute that $200,000 over seven years isn’t that much. In fact, it amounts to chump change compared to what the ACORN nonprofit empire takes in one year. Notwithstanding, the results of the audit should serve notice to all federal agencies that ACORN and its affiliated organizations are less than reliable grantees, directly or indirectly. More broadly, the report should raise questions about the wisdom of entangling government and “independent” community leaders. Those aren’t the sort of questions, unfortunately, that most lawmakers in Congress are likely to address.