House Oversight Report: Follow the Money: ACORN, SEIU and their Political Allies

Feb 18, 2010 by

Rep. Darrell Issa’s committee has released their report on ACORN, SEIU and their cronies.  What follows is the executive summary of the 68 page report, found here. (H/T Clementine) I am sure it will be interesting reading, like this nugget:

ACORN has received $5,609,338.00 dollars from SEIU. Anthony Hill, a State Senator from Florida, was simultaneously employed by SEIU and ACORN.

We all know how fast patriots can read after all the homework we have had in the last 18 months.

U.S. House of Representatives
Committee on Oversight and Government Reform
Darrell Issa (CA-49), Ranking Member

Follow the Money: ACORN, SEIU and their Political Allies Staff Report

U.S. House of Representatives
111th Congress
Committee on Oversight and Government Reform
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: Representative Jim Jordan (R-OH) requested ACORN election documents from the Secretary of State in Ohio,1 Representative Patrick McHenry (R-NC) was the first to dispute the Census Bureau’s relationship with ACORN,2 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,3 and Representative Dan Burton (R-IN) called on Chairman Towns to conduct an investigation of ACORN and its affiliate corporations.4 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. 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.
1 EDITORIAL, Rep. Jordan wants Ohio to probe plan of ACORN, COLUMBUS DISPATCH, Nov. 22, 2009, available at: http://www.dispatch.com/live/content/national_world/stories/2009/11/22/dcjord.html? (last visited Feb. 12, 2010).
2 Congressman Patrick McHenry, How ACORN Got Dumped by the Census, BIGGOVERNMENT.COM, Sept. 17, 2009, available at: http://mchenry.house.gov/News/DocumentSingle.aspx?DocumentID=145479.
3 PRESS RELEASE, Census Should Partner With Post Office, Not ACORN, June 24, 2009, available at: http://chaffetz.house.gov/2009/06/census-should-partner-with-post-office-not-acorn.shtml.

4 PRESS RELEASE, Burton Demands Investigation of ACORN, Sponsors Legislation To Terminate Funds, Sept. 15, 2009, available at: http://burton.house.gov/posts/burton-demands-investigation-of-acorn-sponsors-legislation-to-terminatefunds.

In response to the CR that cut their funding, ACORN sued the United States of America in the Federal District Court in the Eastern District of New York, arguing that the CR constituted an unconstitutional Bill of Attainder, or punishment without the due process guarantees of a judicial trial. Judge Nina Gershon, a federal judge, presided over the case. On December 11, 2009, Judge Gershon issued an injunction against the United States – an order preventing the United State from enforcing the CR – the funding ban against ACORN. However, as the Justice Department argued, the issue was moot because the CR expired December 18, 2009. Fortunately for ACORN, Judge Gershon allowed ACORN to amend its pleadings and challenge all of the anti-ACORN laws, including Public Laws 111-117, 111-88, and 111-118 as unconstitutional bills of attainder. According to the Louisiana Department of Justice, ACORN is nearing financial bankruptcy, as most of its donors have cut ties with the corporation. However, under Judge Gershon’s decision, ACORN will continue to receive taxpayer dollars from the Federal Government. In other words, the American people will have BAILED OUT ACORN.

The first ACORN Report explained how ACORN used a complex organizational structure of overlapping nonprofit community initiatives and political lobbying activities to conceal the partisan political use of taxpayer and private monies originally designated for the public benefit. The report found there was no real separation between ACORN and its affiliates. ACORN is a single corrupt corporate enterprise composed of a series of holding companies and subsidiaries that are financially and operationally dependent upon the main corporation.

This report adds new evidence confirming these previous findings of ACORN’s misconduct in addition to a closer examination of ACORN’s financial transactions and fundraising that define the organization as a political machine.

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. ACORN is well aware of the legal problems its political activities create as its own attorneys have acknowledged and outlined the potential for criminal and civil violations in private documents for senior ACORN officials. 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 following report makes four crucial findings:

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

ACORN CEO Bertha Lewis, Executive Director Steven Kest, and Political Operations Director 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 and ACORN jointly manage SEIU Local 100; SEIU Healthcare Illinois Indiana; SEIU Local 21A; SEIU Local 32BJ; SEIU Local 52BJ; SEIU Local 880; and SEIU Local 1199. 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 activities and SEIU was the willing accomplice. The nexus between SEIU and ACORN constituted 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 activities 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 $5,609,338.00 dollars from SEIU. Anthony Hill, a State Senator from Florida, was simultaneously employed by SEIU and ACORN. Newly reviewed documents show Senator Claire McCaskill (D-MO), former Governor 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 registrations throughout the United States.
Responses from various state election offices show that ACORN’s late filings of 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, paving 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.

6 Comments

  1. Judge Nina Gershon should be tarred and feathered and run out of the country on a rail. Her disgusting ruling enables a crooked organization like ACORN to bleed the taxpayer who is already having a tough time making it in today’s economy.

    It would be interesting to know just what her personal connection to ACORN is.

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