What is ACORN’s Trade Secret of Corruption?

Posted by Bridgette

“GOP Lawmakers Hit ACORN With New Report Alleging Misconduct. The Republicans’ latest report contains documents that they say confirms previous findings that ACORN is responsible for thousands of fraudulent voter registrations across the country and has used taxpayer money to support a partisan political agenda.”  FOXNews.com

A second report issued by Representative Darrell Issa (R-CA) and his fellow Republicans on the US House Oversight Committee further accuses ACORN, a non-profit organization, and its partner SEIU of multiple crimes. Among them are voter-registration fraud, using taxpayers’ money for political purposes, and violating election laws by having an unlawful partnership between a major labor union and ACORN and its many affiliates. The report says ACORN operates as a “Criminal Conspiracy” in conjunction with SEIU. Not only do they share the same the same office space in many cases, they also co-mingle monies that transfer from one arm to another. According to an audit, one organization, American Institute for Social Justice transfers federal funds to ACORN’s national organization for political purposes. The report also states that the Department of Justice (Eric Holder, Attorney General) and the FBI should be investigated for not delving into this issue of corruption and criminal activity. This is a 68 page report and the following are some of the salient points.

“Follow the Money: ACORN, SEIU and their Political Allies”

Staff Report
US House of Representatives
111th Congress
Committee on Oversight and Government Reform

Released February 18, 2010

I. Executive Summary
Since the first ACORN Report issued on July 23, 2009, the Oversight and Government Reform Committee staff has reviewed over 50,000 pages of documents: from ACORN offices in California and Oklahoma, from ACORN insiders in Missouri, Colorado, New York and Louisiana, and from Secretary of State investigations in nearly every state in the continental United States.

Ranking Member Darrell Issa’s leadership of the Committee’s ACORN investigation has been enhanced by the efforts of several Members of the Committee:

1. Representative Jim Jordan (R-OH) requested ACORN election documents from the Secretary of State in Ohio. 2. Representative Patrick McHenry (R-NC) was the first to dispute the Census Bureau’s relationship with ACORN
3. Representative Jason Chaffetz (R-UT) used the example of ACORN’s corruption to propose legislation requiring the Census Bureau to partner with the U.S. Post Office.
4. Representative Dan Burton (R-IN) called on Chairman Towns to conduct an investigation of ACORN and its affiliate corporations.
5. Additionally, Committee staff has worked with investigators from several federal Inspector General Offices, the Government Accountability Office (GAO), the Office of Legislative Affairs at the United States Department of Justice, the Louisiana Department of Justice and several local and state-level prosecutor’s offices. 6. Attorneys from the Kings County District Attorneys office, which is currently investigating ACORN in New York, told the Committee staff that the first ACORN Report had been “invaluable” to their investigation. David Caldwell, the Assistant Attorney General of Louisiana, stated that his office was able to develop probable cause in its investigation in large part due to the findings of the Oversight and Government Reform Committee Minority Staff.

Since the publication of the first ACORN Report, the House of Representatives passed Congressman Darrell Issa’s Motion to Recommit (MTR) to end the federal funding of ACORN, now known as the Defund ACORN Act. Thereafter, Congress passed and the President signed Section 163 of the Continuing Appropriations Resolution of 2010, Division B of Public Law No. 111-68, which cut federal funds to ACORN.

After the Continuing Resolution (CR), Congress passed and the President signed the following laws ending ACORN funding: FY 2010 Consolidated Appropriation Act, Pub. Law 111-117, §§ 418, 534, & 511; Section 427 of the Department of the Interior, Environmental and Related Agencies Appropriations Act of 2010, Pub. Law 111-88; and Section 8013 of the Department of Defense Appropriations Act of 2010, Pub. Law 111-118.

Since release of the first report, Committee staff met with insiders from both ACORN and the Service Employees International Union (“SEIU”) in addition to obtaining and reviewing documents from virtually every state, including California, Missouri and Oklahoma.

THE REPORT MAKES FOUR CRUCIAL FINDING:

First, ACORN and SEIU’s illegal agreements and the crimes committed in furtherance of these agreements, constitutes a criminal conspiracy.

ACORN CEO Bertha Lewis, Exec. Dir. Steven Kest, and Political Operations Dir. Zach Polett have actual or apparent authority for ACORN’s illegal acts. The Committee’s investigation has confirmed previous findings as well as identified a method behind ACORN’s criminal activities.

Second, there is a pattern, signature or “trade secret” of corruption common to all ACORN affiliates called “Muscle for the Money.”

Muscle for the Money involves using non-profit corporations for electioneering activities and an SEIU strategy to threaten corporations and banks into brokering deals for ACORN’s financial benefit SEIU and Project Vote used litigation to force demands from government officials. ACORN, through Project Vote, threatened State Secretary of State offices with lawsuits, thus forcing political compromises at the expense of taxpayers.

SEIU and ACORN are substantially intertwined.

SEIU aided and encouraged ACORN to put pressure on banks to use its federally-funded affiliates to target political candidates, and to threaten public officials with litigation. ACORN took the lead in these activites and SEIU was the willing accomplice. The nexus between SEIU and ACORN constitued an agreement between both organizations to engage in fraudulent activities which ACORN perpetuated through the use of its affiliates.

The Committee investigation found ACORN prepared for these fraudulent activies by issuing membership letters documenting which banks caved-in to ACORN’s pressure; through political plans targeting congressional districts to get sympathetic candidates elected, and via emails and legal complaints reflecting ACORN’s ability to coerce and compel public officials to meet certain demands. These findings reflect a pattern, signature or trade secret COMMON to all ACORN affiliates. This signature crime is known as Muscle for the Money.

ACORN has received $5,609,338. from SEIU. Anthony Hill, a State Senator from Florida, was simultaneously employed by SEIU and ACORN. Newly reviewed documents show Senator Clair McCaskill (D-MO), former Gov. Rod Blagojevich (D-IL), and Congressman Gerry Connolly (D-VA), have received the support of SEIU’s ACORN affiliates. Insiders claim that despite SEIU Treasurer Anna Burger’s statement to the contrary, SEIU has never cut ties to ACORN.

Third, ACORN, as a corporation, is responsible for thousands of fraudulent voter registration cards and the sheer amount of fraudulent cards obstructed election administration efforts in many states.

Fraudulent voter registrations are not isolated incidents; they reflect ACORN’s criminal motive to compromise the system of free and fair elections promised in the Constitution of the United States.

Fourth, ACORN contributed to the risky lending that led to the financial collapse.

ACORN drafted language to loosen underwriting standards and decrease down payments in the housing industry, pavying the way for the high rate of subprime loans millions of Americans eventually defaulted on.

ACORN used provisions in the Community Reinvestment Act of 1977 that allowed community groups to challenge bank mergers and acquisitions if a bank did not adequately invest in its own community. These challenges, which featured ACORN’s standard intimidation tactics, successfully forced banks to make lending agreements with ACORN Housing. If banks refused ACORN’s demands, they jeopardized approval of mergers in a timely manner. ACORN Housing moved to become a conventional service provider for the loans. ACORN reaped profits from over a billion dollars in loans to low- income neighborhoods. Because of the policies and financial instruments developed, in part through ACORN’s lobbying activities, borrowers eventually defaulted on the loans. The end result was the bursting of the housing bubble.

ACORN Housing received a total of $39,925,620.13 from Bank of America, JPMorgan Chase & Co., CitiBank, HSBC, CapitalOne, and SunTrust. These lenders and banks also provided ACORN with grants, address and bank account information of at-risk homeowners so ACORN could provide free counseling services. Instead, ACORN used the address and bank account information to target struggling Americans who would be signed up as dues-paying members of ACORN. ACORN’s membership recruiting brought in $48 million a year for ACORN—a boon for their Muscle for Money program.

II. Findings

• There is no distinction between ACORN and any of its affiliates. Affiliates share staff, funds, office space, responsibilities, and common controls–there is no real separation between the parts, making it impossible to consider them as truly separate organizations. All of ACORN’s non-profit affiliates give substantial amounts of money to Citizens’ Consulting, Inc., an arm of ACORN that commingles funds from ACORN’s nonprofit organizations and transfers this money to organizations to use for political purposes. ACORN receives large amounts of money from its nonprofit affiliates without making substantial returns to the affiliates. An examination of the accounting documents shows the American Institute for Social Justice (AISJ) transfers a particularly large amount of its funds, which come in part from the federal government and other ACORN affiliates receiving federal money, to ACORN’s national organization, presumably for political purposes.

• There is a pattern, method or “trade secret” of corruption common to all ACORN affiliates called “Muscle for the Money.” One method is the use of litigation and commingled funds to engage in prohibited electioneering activities. The other method is an SEIU-funded enterprise involving threats and litigation aimed to secure ACORN’s corporate financing. ACORN filed corporate income tax with the Internal Revenue Service and failed to file a Form 990, a requirement for non-profit status in several states where ACORN does business. In some states, ACORN fraudulently informed state Secretary of States that it was tax-exempt in order to avoid state corporate taxes.

• SEIU and ACORN are not only financially but also politically codependent. ACORN directly runs two of the most prominent SEIU locals. ACORN has received several million dollars from SEIU. SEIU shares offices with ACORN in nine cities across the United States, utilizing SEIU staff and resources to advance both organizing and political goals.

• SEIU/ACORN has leveraged its size, influence, and wealth to advance its policies and agendas through a complicated web of political connections, backroom negotiations, public relations, intimidation and litigation. SEIU/ACORN has spent millions of dollars and man hours supporting union friendly federal and state candidates and legislation. These connections are then used to entice employers into neutrality agreements with offers of government subsidies and union concessions.

• ACORN Housing Corporation (AHC) used agreements with banks to provide a variety of benefits for their organization, creating policies that were not necessarily beneficial to and sometimes exploited, the low-income citizens they claim to help.

• The AHC used the Community Reinvestment Act to force banks into lowering loan underwriting agreements that funneled profits to ACORN.
III. Timeline of the House Oversight Committee ACORN Investigation

On December 1, 2009, Ranking Members Issa and Smith co-chaired a forum on ACORN which included the following witnesses: Assistant Attorney General David Caldwell of Louisiana, Indiana Secretary of State Todd Rokita, former ACORN employee Anita MonCrief, and former Department of Justice and FEC official Hans A. von Spakovsky. The following findings were made at the December 1 hearing:

• There needs to be oversight over the Department of Justice and Federal Bureau of Investigation for failing to address and put an end to ACORN’s illegal activities.
• Indiana Secretary of State Todd Rokita informed the U.S. Attorneys Office of the Northern District of Indiana as well as the FEC about violations of federal law in Indiana, neither office took any action against ACORN.
• There are 691 bank accounts of ACORN and ACORN affiliates at Whitney Bank in New Orleans, Louisiana. • ACORN owns stock at Whitney Bank.
• In 2006, Whitney Bank inexplicably wired several million dollars to an ACORN Bank of America account in San Francisco.
• The City of New Orleans, after Hurricane Katrina, gave ACORN 121 pieces of property which ACORN was to give to low-income families but, instead, ACORN rented out these properties for a profit.
• ACORN Housing owns millions of dollars worth of property.
• ACORN uses its membership drives to raise revenue and build political power.

VII. Conclusion

Information about ACORN’s funding sources and secretive financial infrastructure provides critical insight into the organization’s true purpose: political activity and increasing the power of ACORN’s top officials. Committee investigators have identified hundreds of ACORN bank accounts, shell organizations incorporated under different sections of the internal revenue code, and even an ACORN controlled accounting firm (Citizens Consulting Inc.) that helps ACORN obscure the true use of charitable donations and taxpayer funds.

Documents and testimony from ACORN whistleblowers reveal that ACORN activities – despite contentions that they are intended to help the poor – fulfill a more self-serving and political purpose for ACORN.

Until recently, ACORN has largely been able to hide the extent of its most serious legal problems from scrutiny by media and public prosecutors. Nevertheless, ACORN is well aware of these problems as ACORN’s own attorneys have acknowledged and outlined the potential for criminal and civil violations in private documents for senior ACORN officials.

In the past, the reluctance of prosecutors and other public officials to challenge ACORN’s illegal activities may have stemmed from concern about the perception of bringing legal action against an organization that purports to serve the poor.

More disturbingly, it could also be the fear of challenging an organization that has waged savage public campaigns and delivered subtle private threats to large banking institutions for its own financial gain, defeated former political allies who lost the senior leadership’s favor, and formed powerful alliances with the SEIU, state officials like former Illinois Governor Rod Blagojevich, and the Barack Obama White House.

Now, however, as official investigations of ACORN have begun to begun to expose wrongdoing, more ACORN whistleblowers are coming forward with documented accounts of ACORN’s criminal conduct and partisan political aims. A much clearer picture of ACORN has emerged that is changing public perception of the organization. ACORN is a not a bumbling and disorganized non-profit whose employees made mistakes during voter registration drives, but rather a complicated and sophisticated conglomerate of for-profit and non-profit entities with ties to and allegiance from key public figures. Its senior leadership uses low level employees and the poor it purports to serve to fill the organization’s coffers and empowers the senior leadership to sit at the same table as the political candidates it helps elect.

This should be very troubling to all Americans. Political campaigns, taxpayer funds, and charitable donations are subject to regulations designed to protect their integrity. By abusing the rules of all three in furtherance of a political agenda, ACORN exploits the poor and vulnerable who are intended to derive benefit from public and private aid by diverting these resources to corrupt the democratic electoral process. Only by investigating and exposing the extent of this wrongdoing can prosecutorial officials across the United States understand the full scope of ACORN’s crimes – not as isolated misdeeds but as part of a coordinated effort to violate Federal, State, and local statutes designed to protect Americans from machine politics and cronyism in government.

Read the full Report:
http://republicans.oversight.house.gov/images/stories/Reports/20100218followthemoneyacornseiuandtheirpoliticalallies.pdf