Special Report

How ACORN Survives — and Thrives

With friends in high places -- even Obama's HUD secretary -- it's free to remain true to its infamous self.

By 10.25.10

The Obama administration is stonewalling efforts on two fronts to investigate the still-operating ACORN and uncover what aid administration officials offered the radical advocacy group infamous for its thug tactics and election fraud.

The Obama administration is sitting on Capital Research Center's Freedom of Information Act (FOIA) request that seeks correspondence between Housing and Urban Development Secretary Shaun Donovan and ACORN. HUD rules state that FOIA requests must be answered within 45 days, but at this writing our request has been pending for just over seven months.

The request was filed because Donovan is a longtime ACORN collaborator. He worked closely with ACORN for five years when he was New York mayor Michael Bloomberg's housing development commissioner.

"Perhaps no administration official has had more interaction with Acorn than" Donovan, the New York Times reported. ACORN chief organizer Bertha Lewis admitted as much. "We grew to respect him, and he grew to respect us."

Ever since hidden-camera videos surfaced last year showing ACORN employees helping undercover conservative activists with financial and tax planning for a brothel for pedophiles, Donovan has remained silent about his relationship with ACORN. It's unclear what Donovan is hiding.

And if you thought conservatives were the only ones urging the Obama administration to conduct a proper federal racketeering investigation of ACORN, you'd be wrong.

The whistleblowers of the left-leaning "ACORN 8" group are learning the hard way that the Obama Department of Justice is just as adept at stonewalling as Rep. Jerrold Nadler (D-N.Y.). Longtime ACORN benefactor Nadler is the chairman of the House Judiciary Committee's subcommittee on the Constitution, civil rights, and civil liberties who refused to initiate a probe even when confronted with powerful evidence of ACORN's wrongdoing. (To make matters worse, in a breathtaking conflict-of-interest Nadler devised a novel legal strategy ACORN used to defend itself.)

ACORN 8 is a group that broke away from ACORN in 2008. It is headed by Marcel Reid, a former member of ACORN's national board. She was expelled from ACORN after demanding to see financial documentation related to a million-dollar embezzlement perpetrated by the brother of ACORN founder Wade Rathke. The brother, Dale Rathke, blew his ill-gotten gains on spending sprees at Neiman Marcus, limousine rentals, and other accoutrements of the Mercedes Marxist set. Big brother Wade and other high-ranking ACORN officials covered up the theft for eight years until it was discovered two years ago.

"I was attracted to the mission of ACORN to help people, to alleviate poverty," Reid said previously. "We asked to see the books because the promissory note indicated a theft had occurred. They played games with us."

At first, in 2009 ACORN 8 filed a legal complaint with U.S. attorneys across America, hoping to spark interest in an ACORN probe of the embezzlement and other crimes Reid and associates claim have been committed by ACORN. The splinter group's pleas that ACORN be investigated for fraud, embezzlement, conspiracy, and criminal civil rights infractions fell on deaf ears.

So in April of this year ACORN 8 tried again, filing a complaint with the DOJ's Office of the Inspector General (OIG). The complainants said DOJ "refused to assign investigators, or bother to formally investigate ACORN 8 criminal allegations, thereby depriving the group of due process and equal protection of the law."

They described ACORN as an "ongoing criminal enterprise that is committing mail fraud, wire fraud, bank fraud, obstruction of justice and possibly extortion" and requested "a formal criminal civil rights investigation of this important matter."

The ACORN 8 said they had "been forced to resort to notifying the OIG because federal law enforcement authorities across the country have refused to investigate these serious criminal allegations, and consequently, violated our civil rights."

So what does the DOJ's internal watchdog do? It punts. Five months after ACORN 8 filed its paperwork, the OIG informed the complainants in a Sept. 16 letter that it was referring the case to the FBI's Inspection Division and the DOJ's Office of Professional Responsibility.

The wheels of justice may turn slowly, but this is ridiculous. All the OIG had to do was send out a form letter saying "you sent this to the wrong office." It's not that hard to do.

Then the paper chase continued. In a Sept. 23 response to the OIG referral the FBI deflected the complaint, sending it to the DOJ's Criminal Investigative Division, Civil Rights Unit -- where it will no doubt gather dust in this election season. The FBI took a pass because "there is no specific evidence of FBI misconduct identified."

Compare the Obama administration's lethargy in the ACORN 8 case with Attorney General Eric Holder's frenzied rush to drop charges against two New Black Panther Party members who were caught on video trying to intimidate voters by brandishing nightsticks outside a Philadelphia polling station in 2008. When members of a valued political constituency like black militants are in legal jeopardy, Obama's DOJ moves at the speed of light.

The same month administration officials were tossing the ACORN 8 complaint around like a Frisbee, the inspector general for the Department of Housing and Urban Development (HUD) found that ACORN Housing could not account for millions of dollars in federal grants and appeared to have committed massive fraud. ACORN Housing, which is the ACORN network's primary vehicle for getting its hands on federal tax dollars, acquired a new name earlier this year: Affordable Housing Centers of America.

Federal investigators recommended that government funding for the ACORN affiliate be cut off immediately.

The investigators must have felt it was necessary to urge a speedy funding cutoff because the federal government's prohibition on funding ACORN is not a permanent ban. Because the ban was attached to annual appropriations bills it ran out at the end of September.

Many Americans -- and some lawmakers -- believe Congress permanently cut off ACORN from funding last year, but this belief is unfounded. Quirks of parliamentary procedure and the complexity of the appropriations process explain the confusion. The funding ban that passed in fall 2009 is contained in legislation that covers only the fiscal year that ended on September 30 (i.e. Public Law 111-68).

That the funding ban is not permanent was first noticed by ACORN's lawyers and by Judge Roger J. Miner. Miner was the appellate court judge who in August overturned Judge Nina Gershon's perverse ruling that Congress's funding ban was unconstitutional because it supposedly punished ACORN without a trial. Miner noticed that all the appropriations laws passed by Congress that prohibited grants to ACORN "or any of its affiliates, subsidiaries, or allied organizations" applied only to federal spending that ended on Sept. 30, 2010.

Stop-gap legislation signed into law by Community Organizer-in-Chief Obama on Sept. 30 of this year (Public Law 111-242) allows the government to continue spending money until new appropriations are passed by Congress. The measure does not contain the ACORN funding ban.

This means that if they dare, lawmakers like Rep. Nadler will have an opportunity to reinstitute funding for what's left of the ACORN network in the "lame duck" session scheduled for after the upcoming election.

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About the Author

Matthew Vadum is an award-winning investigative journalist at a conservative watchdog group in Washington, D.C. Vadum is also author of Subversion Inc: How Obama's ACORN Red Shirts are Still Terrorizing and Ripping Off American Taxpayers.