Did ACORN get too big for its own good?

By Sharon Theimer and Pete Yost

updated 12:59 a.m. ET Sept. 20, 2009

WASHINGTON - Activist group ACORN started in 1970 to help the poor in Arkansas and quickly went national, growing into a multimillion-dollar conglomerate with a mission so far-flung that schools now bear its name, two radio stations are affiliates and a man it backed is the president. Oh yeah, it's also the unwilling star of a hot Internet video featuring a couple dressed as a hooker and her pimp.

And that last bit is just one of its problems.

The organization praised for its Hurricane Katrina relief efforts and treated by federal, state and local governments as a valuable public resource has had nearly $1 million embezzled by its founder's brother. The openly Democratic-leaning group has seen its employees accused of voter registration fraud, and taking it down has become a cause celebre for Republican lawmakers, activists and pundits.

As if volunteers allegedly signing up cartoon character Mickey Mouse to vote didn't give ACORN enough bad publicity, the public is enthralled with new videos appearing on the Internet and TV news shows showing ACORN employees in Brooklyn, N.Y., advising a couple posing as a prostitute and pimp to lie to get housing aid, and employees in other cities counseling the pair on tax, banking and immigration issues.

Many Democrats used to advertise their ACORN connections. Now, however, the Democratic-led Senate has voted to cut off its grants from the Department of Housing and Urban Development, and the Democrat-dominated House doesn't want it to get any federal money, period.

A distraction from policy agenda?
White House press secretary Robert Gibbs called the conduct in the videos "completely unacceptable" and a prominent ally of President Barack Obama, John Podesta, is on an ACORN advisory panel working to clean up the mess.

Republicans are using ACORN to portray Democrats as corrupt and distract Obama from his policy agenda, the same way Democrats used issues involving Halliburton, the giant government contractor and ex-employer of former Vice President Dick Cheney, against the GOP during the Bush years. Top Republicans from congressional leaders to California Gov. Arnold Schwarzenegger want criminal probes of ACORN and conservative voters are pressuring news organizations for coverage.

The Census Bureau this month cut ties with ACORN for the 2010 census, and a nonpartisan watchdog group, Citizens Against Government Waste, named senators who voted to continue financing ACORN the "September Porkers of the Month."

New York Gov. David Paterson on Friday ordered state agencies to examine contracts with ACORN and place holds on them in the meantime.

ACORN has portrayed its problems as the unfortunate work of a few employees. In the best case, that suggests it made bad hires and gave them poor training and supervision. But when the founder of a national organization admits attempting to keep quiet his brother's theft of more than $900,000, it's a sign that ACORN's problems may rise high and run deep.

How did ACORN wind up in this mess? Did it simply grow too big for its own good?

The scope of government investigations into its activities is unknown. Voter registration fraud cases involving ACORN workers are pending. HUD's inspector general has acknowledged an investigation is under way. ACORN this past week announced it would investigate the video scandal and suspend the admission of new clients into its housing program.

Group wants to ‘establish the public trust’
ACORN chief executive Bertha Lewis has pledged do whatever necessary "to re-establish the public trust." She condemned the actions of the two employees who appeared in the Brooklyn footage, but ACORN also contends segments of the video shot there and elsewhere by the hidden-camera couple were manipulated to make it look bad.

"We understand that the Republican Party is upset, and the right wing is upset because they are out of power now," Lewis said Friday on New York radio station WNYC.

James O'Keefe, one of the two filmmakers, said he went after ACORN because it registers minorities likely to vote against Republicans: "Politicians are getting elected single-handedly due to this organization," O'Keefe told The Washington Post. "No one was holding this organization accountable."

The group is confident it can ride out its troubles.

Full scope of group’s reach unknown
"The majority of our funding comes from our membership and from our supporters," spokesman Brian Kettenring said. "Any attempt to try to limit our access to particular sets of funding is not likely to have much impact on our core operations. It will hurt the individuals that benefit from that particular project. It's pretty clear this sort of attempt to cut off funding is politically motivated more than sort of driven by a high-minded concern for good governance."

ACORN's annual budget is $25 million, Kettenring said. Of that, about 10 percent is federal money and a much smaller share comes from state and local governments, he said. The budget covers ACORN's national office, its state and local chapters and the ACORN Institute, Kettenring said.

ACORN doesn't file a publicly available report with the Internal Revenue Service detailing its finances, spending, relationships and activities. Some of its arms do, but those reports do not reflect the full range of money ACORN gets or all the things it does.

HUD said this past week that it has given ACORN roughly $42 million since the 2000 budget year. A July report by Rep. Darrell Issa, R-Calif., a member of the House Oversight and Government Reform Committee, said ACORN had received more than $53 million in federal money since 1994.

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