Judicial Watch Obtains Documents Revealing ACORN Spin-Off Received HUD Grant Despite Federal Funding Ban

Top HUD official transferred more than $200,000 from ACORN spin-off AHCOA for activities of “former AHCOA affiliates”

(Washington, DC) – Judicial Watch, announced today that it has obtained documents from the Department of Housing and Urban Development (HUD) revealing that on February 12, 2013, HUD Assistant Secretary for Office of Housing Counseling Sarah Gerecke may have violated federal law by requesting that $201,222.07 be transferred from the account of the defunct Affordable Housing Centers of America (AHCOA), an ACORN spin-off, to HUD intermediary Mission for Peace “to specifically pay for the activities of former AHCOA affiliates.”

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According to the documents, obtained pursuant to a Judicial Watch Freedom of Information Act (FOIA) request filed on May 16, 2013, the Gerecke memo requesting the transfer appears to have been in violation of the first continuing resolution of FY 13. That resolution continued funding levels under the FY 2012 appropriations bills, which provided that no HUD funds “made available under this Act may be distributed to the Association of Community Organizations for Reform Now (ACORN) or its subsidiaries.”

The Gerecke memo sent to Assistant Secretary for Housing-Federal Housing Commissioner Carol J. Galante, an Obama appointee, through Acting General Deputy Assistant Secretary of Housing Laura M. Marin stated:

In March 2012, HUD’s Program Support Division (PSD) received notice that Affordable Housing Centers of American (AHCOA) had closed and would no longer participate in the HUD Housing Counseling Program. Upon closing, AHCOA had a balance of $201,222.07 in its account.

The Office of Housing Counseling (OHC) is requesting to transfer, under the ‘replacement grant” rule, the AHCOA balance of $201,222.07 to MOP to specifically pay for the activities of the former AHCOA affiliates. PSD met with the Office of the General Counsel and the Office of Budget and Field Resources to confirm transfer was allowable.

According to records obtained by Judicial Watch dated February 19, 2013, the funds were to be transferred to Mission of Peace President and CEO Reverend Elmira Smith-Vincent in Flint, Michigan. A Line of Credit Control System Treasury Detail memo obtained by Judicial Watch confirmed that the transfer had been made on February 25, 2013.

After a series of scandals triggered the collapse of ACORN in late 2009, what was previously called ACORN Housing was renamed Affordable Housing Centers of America in early 2010. Former ACORN Housing president Alton Bennett retained the same position with AHCOA, as did executive director Mike Shea and vice president Dorothy Amadi. Public affairs director Bruce Dorpalen was formerly ACORN Housing’s loan director.

Months later, in April 2010, California Rep. Darrell Issa, then the ranking Republican on the House Committee on Oversight and Government Reform, issued a Committee investigative report stating, “Committee investigators have discovered that Affordable Housing Centers of America, Inc. maintains the same Tax Identification Number as ACORN Housing, Inc., its predecessor. This means that, for tax purposes, Affordable Housing Centers of America and ACORN Housing are the same.” According to Fox News, Issa later said, “Just as criminals change their aliases, ACORN is changing its name. But make no mistake about it, just because they change their name, doesn’t mean anything has really changed at all.”

In a September 21, 2010, a HUD Inspector General report noted that ACORN Housing, “now operating as Affordable Housing Centers of America misappropriated funds from a $3,252,399 federal grant.” Despite this finding, the GAO issued a conflicting advisory opinion saying that AHCOA was not, for the purposes of the funding ban, a subsidiary of ACORN. NeighborWorks America, a taxpayer-funded private/public entity, concluded that giving taxpayer funds to the ACORN-front would be in violation of federal law.

“Barack Obama is truly the president from ACORN – as this illegal funding by his administration of these ACORN fronts shows,” said Judicial Watch President Tom Fitton. “And at the same time we learn that the Obama administration is unleashing a vast new federal program to force ‘low-income’ housing into every single community in America, we find out that HUD is continuing illegally to fund ACORN spin-offs committed to carrying out Obama’s dictums. This is not a coincidence.”

In August 2011, Judicial Watch released a special report on ACORN spin-offs entitled “The Rebranding of ACORN.” The report concluded, “What was previously called ACORN Housing was renamed Affordable Housing Centers of America … New and existing ACORN ‘spin-offs’ are alive and well and will surely continue to flaunt state and federal laws … In the words of [former chief executive officer of ACORN] Bertha Lewis, ‘[We have created] 18 bulletproof community-organizing Frankensteins that they’re going to have a very hard time attacking.’”