In December a federal judge in Brooklyn ruled that it was unconstitutional for Congress to cut funds for ACORN without conducting a formal investigation into the low-income community activist group. At the time, ACORN was still reeling from hidden camera videos which seemed to show ACORN employees advising a pimp and prostitute on tax evasion. These carefully edited videos were eventually found to show no criminality, but ACORN's funding was never restored. (The group also came under fire because some workers had written false names like "Mickey Mouse" on voter registration drives in 2008.)

In asking Judge Nina Gershon to reconsider her ruling, the government cited a Dec. 7 report written by a former attorney general for Massachusetts which "reinforces Congress' purpose in preventing fraud, waste and abuse." But the AP reports that Judge Gershon ruled again that it was "unmistakable that Congress determined ACORN's guilt before defunding it." She said Congress can investigate ACORN but cannot "rely on the negative results of a congressional or executive report as a rationale to impose a broad, punitive funding ban on a specific, named organization."

Specifically, Gershon ruled that the Code of Federal Regulations establishes a formal process for deciding when federal contractors can be suspended or debarred, and "the existence of these regulations militates against the need for draconian, emergency action by Congress." She then ordered the government to alert federal agencies that they're now allowed to fund ACORN, which has since dissolved in some cities, including New York, where the group is now performing a similar role as New York Communities for Change. Lawyers for the government are considering appealing the ruling.