A spinoff of the controversial community organizing group ACORN has failed to comply with federal grant requirements and should be placed on "inactive status," asserts a report by the inspector general of the Department of Housing and Urban Development.
ACORN, convicted in multiple voter-fraud cases, may have concealed fraud by destroying or failing to produce records, the investigation concluded.
The Office of the Inspector General found the group received $3.25 million in housing counseling grants from HUD between 2008 and 2009. More than $2,544,000, nearly 80 percent, of the HUD grants were used to pay ACORN's salaries.
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HUD has awarded ACORN more than $19 million in housing counseling grants since 1995, the report points out.
The report was released in response to a Sept. 16, 2009, request by Rep. Darrell Issa, R-Calif., the ranking member of the House Committee on Oversight and Government Reform, and Sen. Susan Collins, R-Maine, ranking member of the Senate Committee on Homeland Security and Government Affairs.
It details the results of an investigation by HUD's Office of Inspector General of grant funds awarded under the agency's Housing Counseling Program to ACORN Housing Corporation Inc. of Chicago, now operating as "Affordable Housing Centers of America."
Affordable Housing Centers' communications director in Washington, D.C., was asked by WND to respond to the report but has not replied.
The HUD office said that for Affordable Housing Centers "to continue as a HUD-approved housing counseling agency and for future awards consideration," it "must bring its operations into full compliance with applicable laws, regulators and policies governing HUD's Housing Counseling Program."
The report said the organization was unable to properly account for its allocation of salary expenses, which raised "serious concerns," "particularly given the millions of federal and nonfederal dollars" allocated. It also found "services procured from ACORN 'associated' organizations failed to meet the required tests of 'open and free competition.'"
The inspector general recommends that HUD's Office of Single Family Housing consider placing Affordable Housing Centers in inactive status while it "initiates corrective actions to address the exceptions and recommendations in this report."
Issa said any organization that applies for and accepts taxpayer dollars has a responsibility to act consistently with federal law.
"It doesn't matter if it's $10 or $10,000," he said. "There is no acceptable amount of abuse or mismanagement that the federal government should tolerate when it comes to the taxpayer's dollars."
The inspector concluded ACORN may have concealed fraud by destroying or failing to produce records.
"A determination could not be made as to what activities the employees performed or which grant to charge for those activities," the report says. "Consequently, HUD had no assurance that it did not bear more than its fair share of the costs incurred for salary expenses of [Affordable Housing Centers] counselors."
ACORN Housing also received more than $27,269,000 from other federal and nonfederal sources, according to the report.
Among the report's other conclusions was that ACORN charged the government salary costs for employees after they were terminated and charged 2008 salary expenses to a 2009 grant in violation of the HUD grant agreement.
"Unfortunately," the report said, "ACORN's money laundering is impossible to track.
"Further, cost or price analysis and documentation to support the basis and justification for the services was not readily available," the office concluded.
A Republican oversight committee report in April 2010 was titled "ACORN Political Machine Tries to Reinvent Itself" and a July 2009 report asked "Is ACORN Intentionally Structured as a Criminal Enterprise?"
During the 2008 presidential campaign, Obama insisted he had nothing to do with ACORN after the inner-city advocacy group became engulfed in controversy over voter-registration fraud.
But in August 2008, the Pittsburgh Tribune-Review reported the Obama campaign paid $832,598.29 to ACORN "offshoot" Citizens Services Inc. for "get out the vote" projects from Feb. 25 to May 17.
Obama also was captured on video during the campaign telling ACORN "you have a friend in me."
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