Republicans on the House Committee on Oversight and Government Reform, led by Rep. Darrell Issa, have issued a scalding report on ACORN and the SEIU. The main thesis — that ACORN and SEIU are, operationally, in effect the same organization, an organization that illegally channels restricted money into political activity — is argued persuasively, but the authors slopped the report up with tangential complaints and grossly exaggerated claims about ACORN’s role in the housing bubble.
The odds are vanishingly small that Eric Holder’s Justice Department, which could not be bothered to prosecute armed New Black Panther–party thugs brandishing weapons to scare off would-be voters, is going to do much about an organization at the heart of its boss’s political coalition and fundraising operation. Issa’s report may be the closest thing to an indictment ACORN ever sees — which makes its flaws all the more of a shame.
Let’s trim the fat and gristle before proceeding to the meat of the matter. The report complains about the organization’s political tactics; these tactics are obviously the work of goons, but not obviously the work of criminals. Also, the report claims: “ACORN contributed to the risky lending that led to the financial collapse.” That’s probably true, and maybe even more than trivially true. But you know who else contributed to the risky lending that led to the financial collapse? Congress — Republicans no less than Democrats. Also practically every presidential administration and congressional majority from FDR forward. Other big contributors to the risky lending: banks, securitizers, financial markets, greedy real-estate gamblers with dollar-green dreams of six-figure flips, and people who stupidly bought houses they could not afford, many of whom lied about their financial resources when applying for mortgages.
ACORN’s role in all of this was unquestionably rapacious and self-serving and distasteful, but it was pink cotton candy compared with your average congressional appropriations session. Issa does himself no favors by using the legitimate case against ACORN to rewrite the history of the financial crisis as a fable of lefty fiendishness. There’s plenty of housing-bubble blame to go around, and for Congress to try to shift its share onto riff-raff like ACORN is unseemly, as are Issa’s complaints about ACORN’s habit of staging rowdy protests and threatening to sue banks and others under laws passed and sustained by Issa’s colleagues in Congress. Don’t like ACORN’s threatening to sue every banker on earth under the Community Reinvestment Act? Republicans had from 1994 to 2006 to repeal it.
As for his primary argument, Issa pulls no punches, writing: “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. . . . ACORN and SEIU’s illegal agreements, and the crimes committed in furtherance of these agreements, constitute a criminal conspiracy.”
Issa’s staff did a lot of legwork, collecting ACORN-related documents from almost every state — lots of state law-enforcement agencies have an interest in ACORN — and interviewing ACORN and SEIU insiders who were able to offer some real insights into the workings of those organizations. The report is full of interesting details, such as which SEIU locals are directly run by ACORN — they include SEIU Healthcare Illinois Indiana and SEIU Local 100 (which claims to have left SEIU in October; Issa claims that separation is purely cosmetic). The report documents millions of dollars in transactions across dozens of bank accounts linking ACORN to the labor giant. Among Issa’s findings: “ACORN has received $5,609,338 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., Ill.) 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.” It has been widely noted that SEIU and ACORN often share mailing addresses, office space, and employees.
At the heart of the enterprise is something called Citizens Consulting, an accounting firm controlled by ACORN. It is, the report finds, “an arm of ACORN that commingles funds from ACORN’s nonprofit organizations and transfers this money to organizations to use for political purposes. ACORN receives large amounts of money from its nonprofit affiliates without making substantial returns to the affiliates. An examination of the accounting documents shows the American Institute for Social Justice (AISJ) transfers a particularly large amount of its funds, which come in part from the federal government and other ACORN affiliates receiving federal money, to ACORN’s national organization, presumably for political purposes.”
AISJ appears to be a shell organization, one of many ACORN employs in its intentionally rococo corporate structure. More than 95 percent of AISJ’s gifts and grants from 2000 to 2004 were paid out to ACORN subsidiaries. ACORN’s major affiliates — Project Vote, ACORN Housing Corp., and AISJ — conduct a mind-boggling array of complex financial transactions with dozens of other affiliated organizations. The arrangement is something less than perfectly transparent. Indeed, Issa’s last report on the organization was titled, “Is ACORN Intentionally Structured as a Criminal Enterprise?” (Issa’s answer, in short: Yeah, basically.)
ACORN also owns substantial stock in Whitney Bank, which, the report finds, “inexplicably wired several million dollars to an ACORN Bank of America account in San Francisco” in 2006.
ACORN tried to cover up nearly a million dollars’ worth of embezzlement from the organization by the brother of its founder, a theft that involved a series of transactions with SEIU Local 100. ACORN’s own general counsel wonders in one memo how aware SEIU leaders were of the “perfidy of their Chief Organizer,” and he calls their legal filings “hokey.” The Democratic attorney general of Louisiana, David Caldwell, thinks the figure may really be as high as $5 million. He’s issued subpoenas in the case, and his office says that there seems to be a kind of “civil war” within the organization, with its New York City, Washington, and New Orleans factions fighting for control. Caldwell has testified that ACORN CEO Bertha Lewis has “forcefully taken control over all ACORN accounts and is trying to consolidate whatever assets exist.” He says there’s $20 million in cash, scattered across 800 bank accounts, along with $10 million worth of real estate.
Apparently there’s a lot of money in poverty, and ACORN has found some interesting ways to raise revenues: After Katrina, the City of New Orleans gave ACORN 121 properties, which were to be given to poor families affected by the storm. ACORN rented them out for profit instead. Internal ACORN memos suggest that the organization regards SEIU union dues as a regular part of its own revenue stream.
Not to mention that ACORN is still eligible to receive money from taxpayers: Enforcement of the Defund ACORN Act was blocked by federal injunction, and the legislation would have expired in December of 2009, anyway. Representative Issa, along with Rep. Lamar Smith, has called for a full federal criminal probe of the organization. Good luck with that. They should bear in mind the words of another of President Obama’s remarkable associations, the terrorist bomber Bill Ayers: “Guilty as sin, free as a bird: What a country, America.”
– Kevin Williamson is a deputy managing editor of National Review.