Judicial Watch: Obama Administration Issues $79,819 Grant to ACORN Offshoot in Apparent Violation of ACORN Funding Ban

WASHINGTON, DC--(Marketwire - Jul 5, 2011) - Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that that the Obama Department of Housing and Urban Development (HUD) has issued a $79,819 grant to the Association of Community Organizations for Reform Now (ACORN)-offshoot Affordable Housing Centers of America (AHCOA) in apparent violation of an ACORN funding ban passed by Congress and signed into law by President Obama in 2009. Moreover, this grant was provided to the organization less than a year after ACORN/ACHOA was criticized by HUD's inspector general in two separate investigations for misappropriating funds from federal grants.

On October 1, 2009, President Obama signed into law legislation known as the Defund ACORN Act that effectively prohibited the federal government from funding "ACORN and any ACORN-related affiliate." Following a lawsuit filed by ACORN challenging the law, which passed both branches of Congress by wide margins, the federal courts in New York upheld the constitutionality of the funding ban on August 13, 2010. The Supreme Court last month refused to hear ACORN's appeal of this funding ban.

But a Judicial Watch investigation revealed that on March 1, 2011, HUD announced a $79,819 federal grant to ACHOA to "educate the public and housing providers about their rights and obligations under federal, state, and local fair housing laws."

Although the Government Accountability Office issued a controversial advisory opinion in September 2010 stating that ACHOA is a separate entity from ACORN and is therefore not subject to the funding ban, the government's website listing federal expenditures identifies the organization receiving the $79,819 grant as "ACORN Housing Corporation Inc," and lists ACORN's New Orleans, Louisiana, address. Moreover ACHOA maintains the same board of directors, executive director and offices as its predecessor, ACORN Housing Corporation, Inc.

Federal investigators have documented fraudulent activity on the part of ACORN Housing/ACHOA. For example, according to a September 21, 2010, HUD inspector general report, which notes that ACORN Housing is "now operating as Affordable Housing Centers of America," the organization misappropriated funds from a $3,252,399 federal grant. The inspector general concluded that ACORN Housing/ACHOA had charged salary expenses to the HUD grant that "were not fully supported." The organization also continued to pay its counselors even after they were terminated, did not meet federal procurement standards and allegedly destroyed documents to conceal the fraudulent activity.

The inspector general articulated a number of benchmarks that must first be met by ACHOA before the organization could begin receiving any future federal funds, including reimbursing the government the misappropriated funds.

A separate November 8, 2010, HUD inspector general report documented additional fraudulent activity by ACORN/ACHOA. The ACORN group "inappropriately expended more than $3.2 million from its fiscal years 2004 and 2005 grants for the elimination of lead poisoning in its housing program," the report concluded. The misappropriation included the use of funds "not identified in its grant application's detailed budgets," including "campaign services" and "grant fundraising activities."

In November 2007, then-Senator Obama addressed ACORN and thanked the organization for its work. While Obama has denied that he had any involvement with ACORN other than some legal work he did for them in 1995, his statements in 2007 suggest otherwise. In Senator Obama's own words, "I've been fighting alongside Acorn [sic] on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, Acorn [sic] was smack dab in the middle of it, and we appreciate your work." Barack Obama served as the Illinois executive director of Project Vote in 1992. His campaign paid more than $800,000 to an ACORN organization to help "get out the vote" in his successful primary campaign against then-Sen. Hillary Clinton.

The New York Times reported in 2009 that "perhaps no administration official has had more interaction with Acorn [sic] than Mr. [Shaun] Donovan," who is Obama's Secretary of Housing and Urban Development. The Times notes that Donovan "worked closely" with ACORN's politically-powerful New York housing affiliate when he was a New York City housing official.

"President Obama is truly the president from ACORN. So it is no surprise that his administration would continue to dole out tax dollars to an ACORN affiliate with a documented history of fraudulent activity," said Judicial Watch President Tom Fitton. "This is another instance of President Obama's appointees stubbornly refusing to follow the law and deny this crooked organization funds. Is the Obama gang ensuring that ACORN is around to help them again in 2012?"

(This year, HUD provided $40 million in grants to 108 "fair housing" organizations, representing a $13.2 million increase over the 2010 award. According to HUD's press announcement, the general purpose of these grants is "to educate the public and combat housing and lending discrimination.")

For further information, visit www.judicialwatch.org.