- The Washington Times - Saturday, November 21, 2009

A report Friday by the Justice Department’s independent inspector general revealed that ACORN won approval for nearly $200,000 in Justice grants since 2002 and mismanaged some of the money.

The grant tally, though only from a single department, provides a glimpse of the taxpayer dollars the embattled liberal activist group is fighting to reclaim after Congress canceled its federal funding.

The report showed the Association of Community Organizations for Reform Now (ACORN) or affiliated groups were authorized to collect five grant awards from the Justice Department since 2002, including two in New York City: a $138,130 grant in fiscal 2005 to provide youth leadership training and set up an “ACORN Youth Union” and $20,000 in fiscal 2009 to help run a Crime Stoppers Program.

“It’s ironic that the Justice Department provided ACORN affiliates with funding to help prevent crime when many of ACORN’s own employees have come under criticism for possible criminal conduct,” said Rep. Lamar Smith of Texas, ranking Republican on the Judiciary Committee, who requested the grant review.

He said he was not surprised the review found that ACORN - a group under intense scrutiny since hidden-camera videos showed its workers advising a woman posing as a prostitute how to cheat on taxes and loan applications - failed to adhere to proper procedures and adequately account for grant funds.

“Because the Justice Department’s review found only small amounts of taxpayer dollars going to ACORN, it is imperative that the Inspectors General from [other] federal agencies that have provided millions to ACORN undertake the same kind of review,” he said. “The Justice Department IG’s report may prove to be just the tip of an iceberg-sized fraud.”

ACORN did not immediately respond to a request for comment.

The organization touts itself as the nation’s largest community organization of low- and moderate-income families, campaigning since 1970 on issues such as living wages, better public schools and expanding homeownership.

It did not object to the Justice Department audit when it was announced in September.

ACORN last week filed a federal lawsuit challenging a law Congress passed that prohibits federal funding to the group or its affiliated organizations.

The law was passed in response to the sting videos and followed several rebukes of ACORN, including the previously ACORN-allied Obama administration canceling plans for the group to help on the 2010 census.

ACORN supposedly rakes in millions of dollars in federal taxpayer dollars a year, including at least $53 million since 1994 for its housing programs alone. However, it is difficult to determine exactly how much federal funding ACORN collects because the organization and its more than 300 affiliated groups, which often use the same accounting firm and the same address in New Orleans, can vie for myriad federal grants.

For instance, ACORN and its affiliates are eligible for millions of dollars in economic stimulus funds.

The inspector general report showed Justice approved grants to ACORN for $13,000 in fiscal 2007 to canvas neighborhoods in St. Louis, $8,539 in fiscal 2009 to canvas neighborhoods in Phoenix, and $20,000 in fiscal 2002 to canvas neighborhoods in Washington.

The more than $138,000 grant for youth leadership training in New York City was the only direct Justice grant to ACORN. The other four were sub-grants, in which another organization was the primary grant recipient and subcontracted a portion of the funding to ACORN.

ACORN did not always receive the grant money that was approved.

In the case of the $20,000 grant to help run the Crime Stoppers Program in New York City, the inspector general said ACORN submitted reimbursement requests outside the scope of the agreement and additional documentation from ACORN was required before the funds would be disbursed.

The report showed that another Justice grantee, the Neighborhood Services Department in Phoenix, entered into a sub-award agreement with the ACORN Institute to receive $8,539 to increase awareness of the Earned Income Tax Credit and free tax preparation in low-income communities.

But the payment was withheld by Neighborhood Services because it said ACORN had a record of poor reporting on another project not related to the Justice grant, according to the report.

Justice said the city of Phoenix was planning to seek approval from its steering committee to terminate the sub-award with the ACORN Institute and use the funds for other program needs.

The videos that sparked the long, hard look at ACORN’s funding were shot by conservative activist James O’Keefe, who appeared in the footage posing as a pimp and was accompanied by a female colleague, Hannah Giles, posing as a prostitute.

The pair got counseling at ACORN offices in Baltimore, Washington, New York and San Bernardino, Calif., to obtain a home loan for property where they could conduct a prostitution business, which they said also would employ girls from El Salvador.

At the Baltimore ACORN office, a female worker advised them to conceal their illegal activities when applying for a loan or filing taxes. The ACORN counselor also told Mr. O’Keefe that he could claim the girls from El Salvador as dependents on his tax return.

• S.A. Miller can be reached at smiller@washingtontimes.com.

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