ACORN
& TAXPAYER FUNDING
(June 2013) Three decades before
Congress voted to defund1
Originally
Relied on Private Funds
The irony is that Arkansas Community Organizations
for Reform Now (ACORN) originally relied on private donations, while avoiding
taxpayer funding after it was established in Pulaski County in 1970. Steven Wade Rathke, then a 21-year-old
organizer for the National Welfare Rights Organization (NWRO), arrived in
Arkansas in 1970 to organize new chapters to aid welfare recipients. Rathke, a New Orleans native, decided to form
ACORN, “an agency that would serve as a catalyst for the operation of all of
the chapters.” ACORN “served as coordinating body” for NWRO chapters until
April 1971,” when it severed ties with the group.2
ACORN originally relied on private
funds. The Arkansas Gazette noted:
“ACORN
is funded almost solely from membership dues.
A family is counted as one member, and pays $1 to join and $1 a month
for dues. “We get a couple of dollars
here and there from churches and individuals, but we don’t get any money from
foundations and the government,” Rathke said.
The (ACORN) Board refuses to accept federal funds. “They are 100 percent against it because it
doesn’t want our flexibility curtailed,” Rathke said. “We have the right to do what we want.”3
But the group’s approach to
fundraising later devolved.
Government
as Community Activist, Not Umpire
Legislators create bias in the public
policy arena when they use tax dollars to subsidize pet groups whose policies
they support. Government, in such
circumstances, devolves from neutral umpire to partisan community activist.
ACORN is an example. The group evolved
from Rathke’s 1973 proclamation of independence to a 2011 Government
Accountability Office (GAO) report illustrating the group’s state of dependence
on government. The GAO found ACORN
received more than $48 million in taxpayer-funding in fiscal years 2005 through
2009 alone. According to the report:
GAO identified awards to ACORN or
potentially related organizations by 31 federal agencies and audits of such
awards; documentation of related investigations and cases; and actions to
implement funding restrictions by the 27 agencies in our review subject to them.
Seventeen of the 31 agencies identified more than $48 million--$44.6 million in
federal grants and at least $3.8 million in subawards (grants and contracts
awarded by federal grantees)--to ACORN or potentially related organizations,
primarily for housing-related purposes, during fiscal years 2005 through 2009.
Agencies were not required to collect data on subawards; consequently, agencies
were limited in their ability to identify all funding they provided to ACORN or
potentially related organizations through subawards.”4
The GAO report was not the first to
note taxpayer funding for ACORN. Government auditors told a 1979 House panel the
group “violated federal guidelines for the Volunteers in Service to America
contract by using VISTA trainees in political activity in 1977 and 1978.” Auditors said officials canceled the federal
grant to ACORN after Rathke “refused to change political language in manuals
used to train Vista workers.”5
Conclusion:
The Cost of Selling Out
The lesson for policymakers is that
pet groups of the left and right should never be subsidized with tax
dollars. The lesson for welfare lobbies
and their camp followers is that playing the insiders’ game also exacts a cost.6
1 Congress voted to eliminate federal funding to
ACORN after undercover videos produced by youth activist James O’Keefe received
widespread media coverage. O’Keefe’s
2013 book, Breakthrough (Threshold
Editions) discusses the episode.
2 Arkansas
Gazette, July 22, 1973
3 Ibid.
4 GAO, “ACORN-Federal Funding and Monitoring,”
June 17, 2011, http://gao.gov/products/GAO-11-484
5 Arkansas
Gazette, June 22, 1979
6 ACORN filed for Chapter 7 bankruptcy in
November 2010