Preliminary Observations on Funding, Oversight, and Investigations and Prosecutions of ACORN or Potentially Related Organizations

Nonprofit organizations, such as the Association of Community Organizations for Reform Now (ACORN), play an important role in providing a wide range of public services. To provide these services, these organizations rely on funding through federal grants and contracts, among other sources. Just as it is important for federal agencies to be held accountable for the efficient and effective use of taxpayer dollars, it is also important for these nonprofit organizations to be held accountable for their use of federal funds. ACORN was established in 1970 as a grassroots organization to advocate for low-income families. By 2009, ACORN reportedly had 500,000 members and had expanded into a national network of organizations involved in the development of affordable housing, foreclosure counseling, voter registration, and political mobilization, among other things. ACORN organizations relied on membership dues and on federal and private foundation funding to support various activities. Voter registration fraud allegations in a number of states and widely distributed videotapes depicting what appeared to be inappropriate behavior by employees of several local ACORN chapters spurred calls to identify federal funding provided to ACORN and ACORN-related organizations and for legislation to restrict or eliminate funding. Congress passed provisions restricting the funding of ACORN or any of its affiliates, subsidiaries, or allied organizations in the fiscal year 2010 continuing resolutions, which were followed by several fiscal year 2010 appropriations acts that prohibited any appropriated funds from being awarded to various ACORN or ACORN-related organizations. ACORN officials reported similar cuts in private foundation funding. In March 2010 ACORN officials stated that the national ACORN organization would be terminating its field operations and closing all of its field offices because of the loss of federal and other funding, although some of its related organizations were to remain open. The Consolidated Appropriations Act, 2010, directed us to issue a report on ACORN within 180 days (by June 14, 2010). We also received three request letters from a total of 23 members of Congress asking that we provide information on federal funding provided to ACORN and oversight of the use of this funding. We have combined our work for the mandate and requests to report on the following objectives for fiscal years 2005 through 2009: (1) How much funding did federal agencies award to ACORN or potentially related organizations, and what was the source and purpose of the funding? (2) To what extent did federal agencies apply oversight mechanisms when monitoring awards to ACORN or potentially related organizations to ensure funding was spent appropriately, and how were problems, if any, addressed? (3) To what extent were federal investigations or prosecutions conducted of ACORN or potentially related organizations, and what were the nature and results of these investigations and prosecutions?