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ACORN Is Up to Its Old Tricks
A federal law is no match for creative accounting.

By Charles C. W. Cooke


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There is an old claim, oft-repeated as gospel truth, that the only living thing that would survive a nuclear attack is the cockroach. The power of modern weaponry has likely rendered this false, but in its place we might well put the disgraced “community organizing” organization, ACORN. Reports of ACORN’s demise are greatly exaggerated, a fact by which nobody with even a cursory familiarity with their practices should be surprised. The evidence suggests that the group has weathered the fallout from its scandals with a remarkable fortitude — it is not just surviving, but thriving; and it is doing so with thousands of those federal dollars that it is explicitly banned from receiving.

Since it was ignominiously stripped of all federal funding in 2009, ACORN has steadily maintained its extensive network of “affiliates” — more specifically, tax-exempt progressive 501(c)3 and 501(c)4 organizations, most of which have been renamed since the scandal hit. For 40 years, it appears, ACORN employed many of these groups to funnel millions of federal dollars its way — and it continues to do so today. It appears to be getting away with it. When somebody buys a gun for a convicted felon, it is called a “straw purchase,” and it is prosecuted to the fullest extent of the law. When ACORN takes money prohibited to it by employing others as collection agents, it is called “accounting.” This is the financial equivalent of being dishonorably discharged, but continuing to serve, and anyone who respects congressional authority should be outraged.

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The system ACORN has developed is ingenious. A 501(c)3 is defined by the IRS as a “Religious, Educational, Charitable, Scientific, Literary . . . Public Safety . . . National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organization.” 501(c)3 groups are prohibited from electioneering or endorsing candidates by virtue of their tax-exempt status, and are severely limited in their capacity to lobby. They are also explicitly barred from using any federal funds to support what little lobbying they are permitted to do. Prima facie, they are useless to those with overtly political aims.

But while 501(c)3 organizations — such as ACORN’s new (i.e., renamed) groups, the Affordable Housing Center of America (AHCOA) and the New York Agency for Community Affairs (NYACA) — are heavily restricted in the political sphere, such impediments can be easily circumvented. This is generally achieved via a mechanism known as “fiscal sponsorship.” Fiscal sponsorship works pretty much how it sounds: In order to help out third-party organizations (“fiscal agents”) that either do not qualify for 501(c)3 status or are waiting for certification, established 501(c)3 groups are permitted to underwrite certain “projects” that they consider to be vital to their mission. In theory at least, this can be a useful and positive tool, one that allows the easy funding of temporary ventures and the sharing of administrative costs, expertise, and infrastructure. (Think, for example, of a college wishing to fund a student documentary.)

But fiscal sponsorship also presents 501(c)3 groups with a highly efficient and sophisticated means of laundering money. Indeed, a leading nonprofit tax attorney, John Edie, suggests that the mechanism is predominantly used for that purpose: “If you’re going to use a fiscal agent, to me you’re saying, ‘Well, I’m going to launder the money through somebody.’” In this particular case, that “I” is any one of the 501(c)3 groups that ACORN has established to do its dirty work, and that “somebody” is ACORN central.

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COMMENTS   10

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   02/06/12 12:31

Is anyone really surprised that once the big dog and pony show of going after ACORN ended and the cameras were turned off, most of the law and order Republicans lost interest? For most of these guys it's about appearances, not accomplishment, and now that the hard work of rooting out the last of the ACORN cockroaches is at hand, they have moved on to other things.

Unfortunately, ACORN is still focused on it's core task of voter fraud and stealing elections, and is now filling its coffers with taxpayer dollars and gearing up for another run at stuffing the ballot boxes in November. Issa remains steadfast - thank goodness - but he can't handle it all single-handed. If anyone expects Holder's DOJ to do its job, or the Boehner / McConnell faction of the Republican party to step up and, you know, DO SOMETHING, I have some nice oceanfront property in Florida I'd like to sell them. Cheap! Really! Anyone?

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Marlene Klim
   02/07/12 09:04

And, everyone knows they are strongly supported by the Cockroach in Chief. The Communist community organizer in chief.

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CraigO
   02/06/12 13:27

To me this case is the canary in the American coal mine. If an organization such as this that promoted fraud, criminal activity and far left political beliefs, paid for with our dollars, can’t be defeated, even after being caught red handed ,than the fact is our side has already lost. Nobody knows how many NPO and NGOs take tax money to promote far left philosophy. I read the platform of ACORN. They promoted unlimited immigration, welfare and big government. They wanted laws that would not allow utility companies to turn off their services to poor people simply because the poor never paid their bills. They had groups of paid activist in every large city in America going door to door promoting Democrat candidates and leftist polices and our tax dollars paid for it all. We are forced to pay for our own demise.

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   02/06/12 15:10

Everything will become clear when one translates the following;
1) Mullah Obama is in fact our Community Organizer-in-Chief; and
2) In Russian "community organization" translates as "soviet".

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   02/06/12 16:53

It's going to be a tough job rooting out all those little groups, it may not even be possible to stop them all. In a lot of ways ACORN is far more dangerous then in was in 2008. It's mostly "underground" with a web of confusing little groups doing who knows what. Bush's Justice department was mostly uninterested in going after these groups, the Obama one will actively support them and block those trying to stop them. There will be even more voter fraud in 2012. ACORN was very busy in my area (Indiana), so I can imagine what they were doing in blue states. I believe voter fraud made Obama's win in Indiana possible, by less then 4,000 votes. (I know of no poll with him winning Indiana)

The best solution to this problem may be what we really want anyway, so maybe this is the way to do it. We must stop the federal government from funding ANY private group, charity or whatever. The government needs to be removed from charity "work". All of it. The feds should have never had that money to begin with.

Think about it. If helping the poor is important, why are we allowing the federal government to try doing so? Its going to fail, no matter how well intended those government people are. It clear in the case of ACORN it is stealing from the poor to fund radical left wing causes.

Before the federal government got involved in "charity" there were millions of privately funded and run charity groups doing all kinds of things. Many don't exist anymore because the government stole their jobs from them.

It time for charity money to not be run though Washington DC. Charity begins at home, and all charity should be done by the private sector. It would be far better for the poor, and far better for taxpayers pocketbooks.

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   02/06/12 17:06

The solution is actually simple in form and nearly impossible in substance. Don't worry about rooting out all the little phantom groups.

Make it illegal for the GOVERNMENT to give ANY funds to ANY "group".

The feds are supposed to be responsible for security, internal order and a stable currency. They are NOT responsible for supporting community groups of any ilk, honest or otherwise.

If these people succceed in voter fraud and get Dumbama elected we should march on Washington and surround the White House and the Capital for the next four years. Instead of Occupy DC we could be SHUTDOWNDC.

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Alex D.
   02/06/12 21:33

The left loves to throw tax payer money at groups like Acorn, because almost all of it will end up going towards the Democrats come election day. The tax payers are being told its "to help the poor", but the reality is that the money is either stolen, mismanaged or give to left wing political campaigns.

This is an ingenious way for the Democrats to raise additonal money, outside of the usual methods. Why haven't the Republicans even tried a scheme like this?

On the other hand, when the government gets involved, things get worse.

I hope the next GOP President stands up to these thugs and says "no funding for you". The left would likely bring out all the attack ads and smear campaigns, but I think its worth the risk.

The first step to reclaiming the Republic, is having the courage to stand up to the big government statists. The second step, is having the courage to actually enforce and defend the United States Constitution.

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dan harrington, jr.
   02/06/12 22:14

ACORN is not a "little group" and has been very powerful in certain urban areas for decades. Its unscrupulous tactics almost ruined me financiallly over twenty years ago in a real estate situation; ACORN is very dangerous and should not be underestimated.

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   02/07/12 13:41

I pray to God that next year at this time no one can say - Do not ask for whom the bell tolls, it tolls for Thee.

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sabertooth
   02/07/12 15:05

could this be another holder SNAFU....I believe it is, of course he might have been left of the email list here as well........yeah right.....LIAR

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