ACORN Whitewash: ACORN Report Is Dishonest Legal Hair-Splitting

I participated in listen-only mode in the teleconference call Monday in which ACORN’s allegedly independent “audit” was released.

I regret it was difficult to make out what the players were saying.

That’s because as the left ferociously circled the wagons, all the creaking wheel noises in the background drowned out much of what was said.

One the main points that ACORN ally and former Massachusetts Attorney General Scott Harshbarger and ACORN CEO/chief organizer Bertha Lewis were trying to make was that ACORN, i.e. the lead entity that controls the ACORN network, and ACORN Housing, are separate entities.

Because ACORN Housing and ACORN are different organizations neither is responsible for the other, they argued. In other words, ACORN is not responsible for ACORN Housing employees caught on video encouraging illegal behavior, and vice versa, they reasoned.

Harshbarger said on the conference call

ACORN Housing is a separate organization. They consider themselves to be separate…They operate in a method that is legally and physically and in terms of services, separate from, so that for that purpose, whether they at various times have affiliated or been [involved in] partnerships those are working relationships that are separate from that.

This is, of course, patent nonsense and rhetorical misdirection. It is also a convenient legal fiction. So said Elizabeth Kingsley, ACORN’s lawyer, in an internal legal memo last year.

ACORN Housing might want to be independent of top-down control by the ACORN headquarters but that lead entity refuses to let it function on its own. Kingsley noted that ACORN Housing (AHC) has complained about being dominated by ACORN headquarters. “AHC specifically objected to what it saw presented as an appointment of someone to supervise its staff without delegated authority from its board, a position it does not accede to,” she wrote at page 3 of the confidential memo last June.

Kingsley also faulted ACORN for “thinking of all these different corporations as part of the family.” ACORN affiliates “have wanted to maintain that they are not ‘affiliated,’ ‘related,’ or ‘controlled’ by or with each other, for various legal purposes, while allowing actual control to be exercised in a highly coordinated manner.”

She criticized ACORN for “trying to pretend that these groups are not connected to one another.” She also noted in a passage about political activity that “ACORN lacks the protective walls needed to ensure that various types of activity are kept sufficiently separate.”

So much for the notion that ACORN’s affiliates, including ACORN Housing, are free of interference from above.

Tax liens pending against ACORN Housing provide more proof that it is run by ACORN headquarters.

Currently, 25 tax liens pending against ACORN Housing list the organization’s address as 1024 Elysian Fields Avenue, New Orleans, Louisiana, the former funeral home that until recently served as ACORN headquarters. Those 25 tax liens were issued by California, Indiana, New Mexico, New York, Pennsylvania, and Texas.

Yet ACORN Housing says its home address is 209 West Jackson Boulevard in Chicago, Illinois. Perhaps all six states have it wrong.

ACORN Housing is the ACORN network’s largest affiliate. As such, it functions as ACORN’s ATM funneling both grants and loans through the ACORN empire.

The gigantic cash machine that is ACORN Housing has taken in the bulk of the $53 million in federal funding that the ACORN network has received since 1993.

ACORN Housing (AHC) has also been in trouble in the past for using government money for partisan activities.

“AmeriCorps members of AHC raised funds for ACORN, performed voter registration activities, and gave partisan speeches. In one instance, an AmeriCorps member was directed by ACORN staff to assist the [Clinton] White House in preparing a press conference in support of legislation.” (“Report on the Activities of the Committee on Economic and Educational Opportunities During the 104th Congress,” Report 104-875, January 2, 1997)

And while ACORN Housing may have helped some poor people obtain mortgages they otherwise wouldn’t have qualified, that help came at an enormous social cost.

That’s because it helped to convince banks to loosen underwriting standards for mortgages. ACORN Housing even bragged about strongarming banks into accepting food stamps as income on loan applications.

Financial tomfoolery like including food stamps on loan applications was encouraged by the Carter-era Community Reinvestment Act (CRA), which opened banking to ACORN-style agitation that over time weakened underwriting criteria and helped to alter the culture of financial institutions in the U.S. This 1977 law, whose enactment ACORN lobbied for, punishes lenders for limiting loans to wealthier, more creditworthy markets, a practice called “redlining.” It gives banking regulators discretionary authority to make trouble for banks that fail to lend enough money to “underserved” minority communities.

After the CRA went into effect, Saul Alinsky-inspired groups such as ACORN used the law to get into the shakedown business. Rev. Jesse Jackson egged them on at an ACORN “banking summit” in 1992, asking rhetorically, “Why did Jesse James rob banks? Because that’s where the money was.”

The shaking down of lenders intensified when then-Treasury Secretary Robert Rubin presided over the Clinton administration’s effort to put the CRA on steroids. Banks began to make risky subprime loans and Fannie Mae and Freddie Mac aggregated them for sale in the secondary market as mortgage-backed securities. These practices made it easier for banks to give in to ACORN’s demands to originate more and more doomed mortgages because they knew they could offload their high-risk debt on quasi-governmental suckers Fannie and Freddie, which were under intense political pressure to service the subprime market.

In other words, ACORN Housing, which ACORN supporters now defend as a well-intentioned branch of the ACORN empire, bears partial responsibility for the subprime mortgage meltdown.

Don’t expect ACORN or Congress to actually investigate the activities shown in the undercover videos or the group’s culpability in the nation’s economic woes anytime soon.