Scandal woes lead ACORN to brink of bankruptcy

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From Ian Urbina, The New York Times:

BALTIMORE – The community organizing group ACORN, battered politically from the right and suffering from mismanagement along with a severe loss of government and other funds, is on the verge of filing for bankruptcy, officials of the group said Friday.

ACORN is holding a teleconference this weekend to discuss plans for a bankruptcy filing, two officials of the group said. They asked not to be identified because they were not authorized to speak to the news media.

Over the last six months, at least 15 of the group’s 30 state chapters have disbanded and have no plans of re-forming, ACORN officials said. The California and New York chapters, two of the largest, have severed their ties to the national group and have independently reconstituted themselves with new names. Several other state groups are also re-forming outside the ACORN umbrella, and will not be affected if the national organization files for bankruptcy.

This week, the Maryland chapter announced that it would not reopen its offices, which were shuttered in September in the wake of a widely publicized series of video recordings made by two conservative activists, posing as a prostitute and a pimp, who secretly filmed ACORN workers providing them tax advice. In the videos, ACORN workers told one of the activists, James E. O’Keefe, III, how to hide prostitution activities from the authorities and avoid taxes, raising no objections to his proposed criminal activities.

After the activists’ videos came to light and swiftly became fodder for 24-hour cable news coverage, private donations from foundations to Acorn all but evaporated and the federal government quickly distanced itself from the group.

The Census Bureau ended its partnership with the organization for this year’s census, the Internal Revenue Service dropped Acorn from its Voluntary Income Tax Assistance program, and Congress voted to cut off all grants to the group.

A network that once included more than 1,000 grass-roots groups, ACORN, which stands for Association of Community Organizations for Reform Now, was created in 1970 and has fought for liberal causes like raising the minimum wage, registering the poor to vote, stopping predatory lending and expanding affordable housing. The organization helped roughly 150,000 lower-income families prepare their tax returns and obtain $190 million in tax refunds between 2004 and 2009, ACORN officials said.

But long before the activist videos delivered what may become the final blow, the organization was dogged for years by financial problems and accusations of fraud. In the summer of 2008, infighting erupted over embezzlement of ACORN funds by the brother of the organization’s founder. Some chapters were also found to have submitted voter application forms with incorrect information on them during the lead-up to the 2008 presidential election, leading to blistering charges from conservative organizations linking Acorn’s errors to the Obama campaign.

“That 20-minute video ruined 40 years of good work,” said Sonja Merchant-Jones, former co-chairwoman of ACORN’s Maryland chapter. “But if the organization had confronted its own internal problems, it might not have been taken down so easily.”

Continue to the full article on The New York Times website.