In Sept. 2010, GAO Found That Housing Group “Is Not An Affiliate, Subsidiary, Or Allied Organization Of ACORN”

GAO: “The Record Does Not Show AHCOA To Be Directly Or Indirectly Under The Control Of ACORN.” From a September 2010 letter from Lynn H. Gibson, then the GAO's acting general counsel, to NeighborWorks, which had inquired whether it was “barred from granting federal funds to AHCOA”:

This letter responds to your request for our views on whether NeighborWorks's appropriations are available for grants to Affordable Housing Centers of America (AHCOA). Letter from General Counsel, NeighborWorks, to Acting General Counsel, GAO, Re: Request for an Appropriations Decision, related to funding Affordable Housing Centers of America (formerly known as ACORN Housing Corporation, Inc.), Aug. 2, 2010 (Request Letter). Specifically, you asked whether NeighborWorks is barred from granting federal funds to AHCOA under section 418 of the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2010: “None of the funds made available under this Act or any prior Act may be provided to the Association of Community Organizations for Reform Now (ACORN), or any of its affiliates, subsidiaries, or allied organizations.” Pub. L. No. 111-117, div. A, title IV, 123 Stat. 3034, 3112 (Dec. 16, 2009). After reviewing the record, it is our view that AHCOA, as presently configured, does not fall with in the scope of section 418 because it is not an affiliate, subsidiary, or allied organization of ACORN.

In reaching our conclusion, we developed our record by soliciting and receiving factual information and legal views from NeighborWorks, AHCOA, and the Department of Housing and Urban Development (HUD). Because section 418 applies to HUD's appropriations as well, HUD previously addressed the applicability of the prohibition to AHCOA. HUD determined that AHCOA is not an affiliate, subsidiary, or allied organization of ACORN. We also reviewed AHCOA's consolidated financial statements and a letter from the Internal Revenue Service (IRS) regarding AHCOA's tax-exempt status.

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The record does not show AHCOA to be directly or indirectly under the control of ACORN. AHCOA is not related to ACORN by shareholdings. Because AHCOA is organized as a nonstock corporation, ACORN cannot own shares in AHCOA. AHCOA Amended Articles of Incorporation, at 2. AHCOA also does not own any shares of ACORN. E-mail from General Counsel, AHCOA, to Staff Attorney, GAO, Re: AHCOA Statement, Sept. 20, 2010. Further, AHCOA certifies the following facts:

• Neither ACORN nor any other organization has the authority to control the makeup of the AHCOA Board of Directors.

• No member of the AHCOA Board is also a member of the ACORN Board.

• While AHCOA and ACORN previously occupied offices in the same building, the two corporations no longer share the same facility.

• No employee of AHCOA is also an employee of ACORN.

The Executive Director of AHCOA “declare[d] under penalty of perjury” that these certifications were “true and correct.” AHCOA Certifications, at 5. We see no reason, therefore, to disregard or discount them, and conclude that AHCOA is not an “affiliate” of ACORN. We note that HUD, relying on these certifications as well as information in its possession as a result of its grant relationship with AHCOA, found no basis to contradict these certifications either.

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In the past, after AHCOA received grant funds, it contracted with various offices of ACORN to provide outreach services for AHCOA. AHCOA Certifications, at No. 24. AHCOA and ACORN also used the same entity -- CCI -- for financial, accounting, legal, and human resources services. AHCOA Certifications, at No. 15. In fact, ACORN itself listed AHCOA as an “allied organization” on an earlier iteration of its Web site. ACORN, Allied Organizations, available at http://web.archive.org/web/20080822090025/www.acorn.org/index.php?id=12375 (archived on Aug. 22, 2009). However, for purposes of the question at issue in this opinion, it is not necessary to determine whether AHCOA, when formerly operating as ACORN Housing, may have been financially or organizationally related to ACORN.

At issue here is whether AHCOA is presently an allied organization of ACORN. AHCOA has terminated its vendor contract with ACORN and certifies that the contract will not be renewed. AHCOA Letter to ACORN; AHCOA Certifications, at No. 24. ACORN recently returned to AHCOA the unpaid balance of an advance it received under the vendor contract. Letter from Director of Operations, AHCOA, to Chief Executive Officer, ACORN, Re: Past Due balances owed to Acorn Housing Corporation, May 14, 2010; E-mail from CEO, ACORN, to Executive Director, AHCOA, Re: Debt Invoice, May 21, 2010. AHCOA also no longer acquires services from CCI. AHCOA Certifications, at Nos. 15.-23. For these reasons, we do not believe AHCOA is presently an allied organization of ACORN. [Government Accountability Office, “NeighborWorks America -- Availability of Appropriations for Grants to Affordable Housing Centers of America,” 9/29/10]

In Nov. 2010, ACORN Filed For Bankruptcy And “Clos[ed] Up Shop”

CNN: “Chapter 7 Means Liquidating And Selling Off All Remaining Assets And Closing Up Shop.” From a post on the CNN blog Political Ticker:

ACORN, the community group from which a mighty oak of political controversy grew, announced it is filing for Chapter 7 bankruptcy by the close of business Tuesday. In March, it began bringing its national operations to a close.

“For over 40 years ACORN has fought the good fight,” said CEO Bertha Lewis, today, in a statement on the group's website. “The ongoing political onslaught caused irreparable harm.”

[...]

Filing for Chapter 7 means liquidating and selling off all remaining assets and closing up shop. [Political Ticker, CNN.com, 11/2/10]

Yet Fox & Friends, Daily Caller Insist “ACORN” Is Receiving “Taxpayer Money” -- Even While Noting GAO Opinion

Daily Caller: ACORN “Is Still Receiving Taxpayer Money Through An Offshoot Group.” A Daily Caller article noted that the GAO “considers AHCOA an entity sufficiently removed from ACORN that the funding ban shouldn't apply to it” and quoted HUD spokesman Jereon Brown saying that HUD's Office of General Counsel also “determined that Affordable Housing Centers of America (AHCOA) is not a subsidiary, affiliate, or allied organization of ACORN.” Nonetheless, the article's first paragraph read:

In spite of a law aimed at de-funding the controversial organization, the Association of Community Organizations for Reform Now (ACORN) is still receiving taxpayer money through an offshoot group. [Daily Caller, 7/6/11]

Fox & Friends: ACORN Is “Getting Dough From Uncle Sam.” From the July 7 edition of Fox & Friends:

STEVE DOOCY (co-host): Meanwhile, remember this? Back in 2009, the president of the United States authorized the defunding of ACORN after that embarrassment, that hidden-camera stuff that showed that a lot of shady stuff was going on there. Under the defunding deal, ACORN not supposed to receive any federal money. And yet, it has been discovered that they are getting dough from Uncle Sam.

GRETCHEN CARLSON: (co-host): “Say it isn't so,” I guess some people would say after they thought that there was a lot of corruption going on in 2008, but there's the check -- $79,819 in a grant to the ACORN Housing group. Now, it's an offshoot of ACORN called Affordable Housing Centers of America, so maybe that's how they can disguise it a little bit better.

ERIC BOLLING (guest co-host): We need to point out ACORN was defunded by Congress because of several scandals, not just the, you know, the undercover thing. There was a 2008 voter fraud scandal, there was a 2009 embezzlement scandal by Wade Rathke, the founder's brother. So they had a long history -- look, Congress defunded them. Now there's -- by the way, should we just call them B-CORN now and continue to pay -- we're broke, we need to stop doing things like this.

DOOCY: Right. And the GAO came out with an opinion last year that said they considered this offshoot completely separate, even though it's the same people in the same places now getting the same kind of money. [Fox News, Fox & Friends, 7/7/11]