ACORN: Taxpayer Seed Money Underwriting Corruption and Voter Fraud? | Citizens Against Government Waste

ACORN: Taxpayer Seed Money Underwriting Corruption and Voter Fraud?

The WasteWatcher

Voter registration and vote fraud is once again front and center as November 4 approaches.  As in previous elections, the Association of Community Organization for Reform Now, or ACORN, is at the center of political and legal storms. 

Along with one of its partners, Project Vote, ACORN claimed on October 6, 2008 that it had registered 1.3 million new voters.  But, according to an October 24, 2008 New York Times article, Project Vote’s executive director has been forced to publicly downgrade that number to closer to 450,000.  Roughly 400,000 of the ballyhooed 1.3 million new registrants turned out to have been bogus, duplicative, incomplete, and just out-and-out absurd, such as registrants named Mickey Mouse and the starting lineup of the Dallas Cowboys football team.  As a result of its controversial activities, ACORN has come under intense scrutiny.    

The New York Times also reported on October 22, 2008 that an internal investigation related to ACORN’s use of charitable donations by a lawyer hired by ACORN itself has raised questions about whether the organization and its impenetrable web of 174 interconnected affiliates have violated federal law.  Since ACORN had little in the way of documentation for its expenditures, the internal report speculates that some of its charitable donations may have been using for lobbying, a violation of federal law. 

House Republican Leader John Boehner’s (R-Ohio) office searched the Federal Register and reported on October 16, 2008 that between 1998 and 2008 ACORN received $31 million in federal grants through 54 different grant programs and 11 federal agencies.  That figure does not include monies received from state and local entities, financial support going back decades from the now-defunct Fannie Mae Foundation, and other nonprofit groups such as the Tides Foundation and Catholic charities. 

All of these disclosures have created doubts about ACORN.  For example, the Catholic Campaign for Human Development (CCHD) announced in mid-October that it had suspended its funding for the group entirely over concerns about “financial irregularities.”  CCHD had budgeted $1.13 million for ACORN during its funding cycle beginning July 1, 2008 and has underwritten more than 320 ACORN projects costing more than $7.3 million during the last 10 years.  

After hearing reports of widespread voter registration fraud across the country, on October 14, 2008, Sen. John Cornyn (R-Texas), a member of the Senate Judiciary Committee, drafted a letter to U.S. Attorney General Michael Mukasey requesting that he launch a full investigation into ACORN’s activities under the RICO statutes to determine if it engaged in fraud as a “criminal enterprise.”   

According to the Associated Press, ACORN has the Federal Bureau of Investigation on its case to determine if the dozens of state investigations on voter registration currently underway indicate a “coordinated national scam.”   

In addition, reports surfaced in July 2008 that Dale Rathke, the brother of ACORN’s founder Wade Rathke, had embezzled $1 million from the organization in 1999 and 2000.  At the time, ACORN officials kept the crime a secret from its own board members and law enforcement officials.  Instead, a small group of ACORN officials decided to make repayment arrangements with the Rathke family.  Dale Rathke remained on the group’s board until the matter was exposed publicly.  The New York Times also reported on October 22, 2008 that ACORN is being dunned for back taxes by the Internal Revenue Service and other state tax enforcement agencies. 

An early version of the massive housing bailout package signed into law in September contained a provision that would have siphoned off a percent of any proceeds the government received from reselling foreclosed homes for groups like ACORN.  That language did not survive in the final bill.  However, there is still an affordable housing fund contained in the Fannie Mae/Freddie Mac bailout bill that President Bush signed into law on July 30, 2008 that could, beginning in 2010, redirect a certain percentage of the two companies’ future profits to groups like ACORN.

Congress must immediately canvas all federal agencies, issue a report on how much the group has received in taxpayer funds and immediately bar ACORN from receiving another penny of the taxpayers’ money pending the results of a full-blown probe. 

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