In recent days, media figures have accused Democrats of attempting to direct millions of dollars in government money to the Association of Community Organizations for Reform Now (ACORN) in the financial bailout bill. The accusation is false. Neither the draft proposal nor the final version of the bill contained any language mentioning ACORN. Those making the false claim were misrepresenting a provision -- since removed -- that would have directed 20 percent of any profits realized on troubled assets purchased under the plan into two previously established funds: the Housing Trust Fund and the Capital Magnet Fund.

Under the now-removed provision, the money going to the Housing Trust Fund would have been distributed by the Department of Housing and Urban Development in the form of block grants to states, which would then award grants to qualified applicants. Money going to the Capital Magnet Fund would have been distributed by the U.S. Treasury Department through a competitive grant application process.

Salon.com's Gabriel Winant reported that ACORN's legislative director said the organization's housing advocacy affiliate, ACORN Housing, is unlikely to seek any grants, and even if it did, it would have to go through the same application process as any other group:

Thursday night, Sen. Lindsey Graham [R-SC] told Fox News' Greta Van Susteren that 20 percent of the funds for “the retired debts” in the Democratic proposal would go to the progressive organizing group ACORN.

[...]

There's not even any reason, at least at this point, to believe that any of the money allocated to the Housing Trust Fund would end up with ACORN.

Brenda Muniz, the organization's legislative director, told Salon that Graham's claim is “just ludicrous.” ACORN itself claims to take no money at all from the government. ACORN Housing, an affiliated but ostensibly autonomous nonprofit that provides free housing counseling, is considering applying for funds from the Housing Trust Fund, but will probably not choose to do so. “It's unlikely that we stand to get anything,” Muniz said. Because ACORN Housing's primary area of expertise is housing counseling -- which is not what the Trust Fund's grants are for -- Muniz said that it's “unlikely that they would take on something like that.”

Even if local ACORN Housing affiliates did choose to apply for money from the Housing Trust Fund, they would have to go through the grant proposal process at the state and/or local level. The fund allocates money to state and local government agencies and trust funds, which in turn grant it to housing development organizations that make it through the application process.

The following media figures have recently falsely claimed or suggested that congressional Democrats have attempted to direct funds to ACORN:

• During the October 1 edition of Fox News' Fox & Friends, host Steve Doocy said: “There was a story out there that the Democrats were trying to give ACORN 20 percent of those almost trillion dollars, so that's extraordinary.” Former Ohio secretary of state and Townhall.com contributing editor Ken Blackwell replied: “It was a classic payoff. It was a classic payoff. It was political graft at its worst.”
• In an October 1 column, syndicated columnist Mona Charen wrote that “Democrats in Congress managed to find time to slip language into the bailout legislation that would provide a dandy little slush fund for ACORN. ... With the whole financial world and possibly the world economy trembling and cracking like a cement building in an earthquake, Democrats continue to try to fund their friends at ACORN?”
• On the September 29 edition of CNN's Lou Dobbs Tonight, host Lou Dobbs claimed: “ACORN stands to reap hundreds of millions of dollars from a government bailout of Wall Street.” Dobbs added later: “This is a straightforward deal for ACORN and other groups, left-wing groups, set up by the Democratic leadership of Congress. They're not interested in the bailout per se. They want to spread this out, and many people believe that this bailout in part is dear to the Democratic leadership because they want to advance a social agenda here as much as much as an economic bailout of Wall Street.”

A draft of the bill included the following -- since removed from the final version the House rejected on September 29:

(d) TRANSFER OF A PERCENTAGE OF PROFITS.

1. DEPOSITS.--Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).

2. USE OF DEPOSITS.--Of the amount referred to in paragraph (1)--

1. 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and

2. 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).

(3) REMAINDER DEPOSITED IN THE TREASURY.--Revenues of, and proceeds from the sale of each troubled asset purchased under this Act that are remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.

From the October 1 edition of Fox News' Fox & Friends:

DOOCY: Before the bailout plan was rejected earlier this week, there were reports of House Democrats trying to funnel money to an organization called ACORN, also known as the Association of Community Organizations for Reform Now. As part of the deal, ACORN has come under scrutiny for its alleged ties to criminal voter fraud in states such as Ohio, a key battleground state. So why is ACORN significant? And what is Senator Obama's connection to this group? Joining us right now from Cincinnati is Ken Blackwell, former Ohio state -- secretary of state. Good morning to you, Ken.

BLACKWELL: Good morning. Good to be with you, Steve.

DOOCY: OK, there in Ohio right now, you've got this deal where, for the next six days or so, you can register and vote on the spot, and we've heard all sorts of things that community organizers are going out to get as many people as they possibly can to get them to register and vote immediately, even though oftentimes they don't have any proof that they can legally vote in your state.

BLACKWELL: Oh, absolutely. And the backdrop there, though, and the safeguard is that those votes won't be counted until Election Day, which means that the bipartisan boards of election in our 88 counties have ample time to validate whether or not the person who cast that ballot was a legal voter. But it really does speak to what I consider to be a fallacy in our system. Here's an organization, ACORN, that believes in the doctrine of “voters without borders.” Here is an organization that from coast to coast has been embroiled in controversy around voter fraud, and we had the Congress -- the Democrats in Congress-- attempting a midnight gift to them in the bailout, or the rescue plan regarding -- depending on your perspective.

DOOCY: Yeah. There was a story out there that the Democrats were trying to give ACORN 20 percent of those almost trillion dollars, so that's extraordinary. Now, Barack - Barack --

BLACKWELL: It was a classic payoff. It was a classic payoff. It was political graft at its worst.

DOOCY: All right. Now, Barack Obama worked for ACORN for a while -- that's where he was a community organizer, and he was a trainer. He was one of these guys who showed guys how to do exactly this. Are you suggesting today, Ken, that ACORN is trying to steal the election?

BLACKWELL: Well, let's put it this way. This is an organization whose -- has a disturbing pattern of voter fraud, and they were, this time, going to do it with more of our tax dollars. These guys already get taxpayer dollars. We should be outraged -- we should be outraged that Congress is attempting to give them more at a time when one of their trainers is on the ballot.

DOOCY: It's something to think about. All right, Ken Blackwell, former Ohio secretary of state and chairman of Coalition for a Conservative Majority, we thank you very much, sir, for joining us live today from Cincinnati.

BLACKWELL: Glad to be with you.

From the September 29 edition of CNN's Lou Dobbs Tonight:

DOBBS: Well, one of the groups at the center of this financial crisis is a so-called community activist group known as ACORN. In point of fact, ACORN is a left-wing special interest group now under investigation for embezzlement, voter fraud and providing mortgages to illegal aliens, among other things.

The group ACORN lobbied Congress for years to allow more of those risky mortgages that in part led to this crisis. And now, ACORN stands to reap hundreds of millions of dollars from a government bailout of Wall Street. Lisa Sylvester has our report.

[...]

SYLVESTER: And ACORN, which calls itself the nation's largest grassroots organization of low and moderate income families, has come under fire for other issues. At least five states have opened investigations into its voter registration drives, and ACORN employees have been convicted of voter fraud. Still, this group, as you mentioned, stood to benefit from the bailout deal and part of any profit realized from the sale of troubled assets were to go into a fund, and that money would be distributed to low income housing advocacy groups including ACORN, Lou.

DOBBS: Now, and think about this. In the midst of this -- you know, everyone talking about a clean bill and the Democratic leadership, let's be clear. This is a straightforward deal for ACORN and other groups, left-wing groups, set up by the Democratic leadership of Congress. They're not interested in the bailout per se. They want to spread this out, and many people believe that this bailout in part is dear to the Democratic leadership because they want to advance a social agenda here as much as much as an economic bailout of Wall Street.

SYLVESTER: Yeah, Lou, in fact what they did is in prior legislation they actually created these two funds. And now essentially what they were going to do is try to use this bailout to fund and put money in those funds in order to benefit groups like ACORN and in order to advance some other causes, as you mentioned, including their voter registration drives, Lou.

DOBBS: It's -- this is pitiful in the fact that, of course, this Congress is fully supportive of this nonsense is all the more disgusting, so voters right now, all of us as citizens have a lot to be disgusted with on Capitol Hill. Thank you very much, Lisa -- Lisa Sylvester reporting.

*Name corrected.