Appeals Court Upholds ACORN Funding Cutoff — For Now

ACORN evidenceWhatever guises the discredited Association of Community Organizations for Reform Now, or ACORN, assumes in the future, taxpayers now have less reason to worry about being conscripted into funding them. This past Friday, a Manhattan federal appeals court ruled that Congress last fall had acted within its authority in deleting funds for the radical nonprofit community network. In overturning a lower court, the Second Circuit Court of Appeals determined the appropriations cutoff had not punished ACORN without trial and thus was not in violation of the constitutional ban on bills of attainder. The decision was partial; the appeals court sent the case back to U.S. District Judge Nina Gershon to decide whether ACORN’s free speech and due process rights also had been violated. Even on those grounds, the plaintiffs’ case looks shaky.

National Legal and Policy Center has provided extensive coverage of the recent travails of the New Orleans-based ACORN, set up in Little Rock, Ark. in 1970 as an anti-poverty project. NLPC has noted repeatedly that the group’s founder and longtime chief organizer, Wade Rathke, was forced to step down in June 2008 following revelations that back in 1999-2000 he’d covered for his brother, Dale, who as ACORN chief financial officer almost certainly had embezzled nearly $950,000 from the organization’s coffers. This wasn’t the only corruption at the community organizing behemoth, which has about 360 subsidiary and affiliated groups. ACORN volunteers in Missouri, Nevada and other states during the last several years were indicted for voter registration fraud, with any number of them pleading guilty. Several affiliates have violated their tax-exempt status by engaging in aggressively partisan political activity. And ACORN and its affiliates, despite taking in a combined $100 million a year, have been tax scofflaws; the IRS and the State of Louisiana each placed liens on their assets.

Critics of the group seized the moment. Last July Rep. Darrell Issa, R-Calif., Ranking Minority Member of the House Committee on Oversight and Government Reform, released an 88-page report prepared by GOP staffers concluding that ACORN was structured as a racketeering enterprise, as defined by RICO statutes. And a pair of young conservative activists, James O’Keefe and Hannah Giles, two months later pulled off a sting operation against ACORN in cities across the nation. Using an undercover video camera, they appeared to catch ACORN office employees giving advice on how to set up illegal business activities. The videos were aired on the Fox News Channel, causing an instant uproar. A gun-shy IRS, Census Bureau and Federal Emergency Management Agency (FEMA), in rapid succession, terminated planned working relationships with ACORN. The Justice Department’s Office of Inspector General launched a full investigation of its grants to the group. The Service Employees International Union announced it had severed its longstanding ties with ACORN. Most damagingly, Congress, led by Rep. Issa and Sen. Mike Johanns, R-Neb., zeroed out all funding for the organization for fiscal year 2010. Though ACORN had been receiving only around 10 percent of its funds from federal sources, the group’s sudden bad reputation triggered a shortfall in private donations that put its existence in jeopardy.

ACORN, whose center of gravity by this time had shifted from New Orleans to New York City, counterattacked. It commissioned former Massachusetts State Attorney General Scott Harshbarger to supervise a full-scale internal audit of the group. After a two-month probe, Harshbarger released a 47-page report concluding that ACORN, though in need of better internal controls, committed no illegal acts. Current ACORN National President Bertha Lewis celebrated the findings as “part vindication, part constructive criticism and 100 percent road map to the future.” Her organization took the legal route as well. It hired the Center for Constitutional Rights, a New York-based nonprofit law firm co-founded more than 40 years ago by the late radical lawyer William Kunstler, to file suit to restore federal funding. Congress, the center alleged, had inflicted punishment without fair trial on ACORN, and in addition, deprived it of its rights to free speech and due process. U.S. District Judge Nina Gershon, a Clinton appointee, examined the case from the standpoint of whether the cutoff represented a bill of attainder. Last December she ruled on behalf of the plaintiff, imposing a temporary injunction against defunding. This past March she made the injunction permanent.

The U.S. Department of Justice appealed, winning a temporary restoration of the funding ban in April. This past Friday a three-judge circuit court panel made its reversal permanent — at least on grounds of potential bill of attainder violation. Its ruling in part rested on the fact that ACORN received only 10 percent of its funding from federal sources. “We doubt that the direct consequences of the appropriations laws temporarily precluding ACORN from federal funds were so disproportionately severe or so inappropriate as to constitute punishment,” concluded the court. Congressman Issa expressed satisfaction: “Hopefully, today’s ruling…puts an end to ACORN’s misguided belief that there exists some right to taxpayer dollars to fund their overtly criminal and partisan political agenda.” Bill Quigley, legal director for the Center for Constitutional Rights, took a different view, stating, “We cannot let Congress be pushed around by the right-wing media machine into becoming prosecutor, judge, jury and executioner of politically unpopular people or organizations.”

The latest decision, as noted earlier, doesn’t provide closure. The Second Circuit Court remanded the case back to Judge Gershon’s court in Brooklyn for a determination if the congressional funding ban had violated ACORN’s free speech and due process rights. It ought to be a tough sell for the plaintiffs. One finds it difficult to justify a constitutional “right” for a private organization, political or otherwise, to receive public money, no matter how noble-sounding its rationale. Whose free speech or due process under law is being violated here? Even if ACORN weren’t aggressively partisan – and that’s exactly how it has operated for 40 years of existence – Congress acted properly. The evidence had become undeniable that ACORN had displayed a long and disturbing pattern of corruption. Even legislators who agree with the group’s political stance should have problems seeing it as deserving of taxpayer support. That President Obama as a litigator some 15 years ago had represented an Illinois chapter of ACORN so as to force the State of Illinois to comply with the federal “Motor Voter” law is all the more reason to be suspicious of further public funding.

ACORN, meanwhile, formally shut down operations on April 1, closing its remaining chapters in order to secure assets and pay off debts. But this has all the appearance of a bait and switch. Even before the shutdown certain local and state chapters nationwide had rebranded themselves. New York ACORN, for example, became New York Communities for Change, while California ACORN morphed into the Alliance for Californians for Community Empowerment. The very continued existence of this court case ought to serve notice that ACORN remains alive in spirit if not in name.


ACORN Formally Disbands; May Reform Under New Name.

Maryland’s ACORN Chapter Closes Operations.

ACORN Local Chapters Declare Independence; Makeover Appears Cosmetic.

Federal Judge in N.Y. Protects ACORN Government Funding.

Harshbarger Whitewashes ACORN Lawbreaking.

SEIU Disavows ACORN, but Long History of Ties Won’t Go Away.