The ACORN canard

Republicans are attacking the bailout proposal by falsely claiming that a substantial amount of money could go to a progressive community organizing group that's unpopular on the right.

Published September 26, 2008 9:35PM (EDT)

After the mockery directed at community organizers during the Republican convention, it may come as little surprise that in order to justify their opposition to the bailout proposal as currently structured, some Republicans are pointing to a provision intended to support the development of low-income housing. But the basis for their criticism is, at best, misinformed. At worst, it's an outright lie.

Thursday night, Sen. Lindsey Graham told Fox News' Greta Van Susteren that 20 percent of the funds for "the retired debts" in the Democratic proposal would go to the progressive organizing group ACORN (see the last 30 seconds of the video at the bottom of this post).

If that seems like an implausibly gigantic amount of money, it's because there's nothing true about Graham's statement. That, however, did not keep various parts of the conservative blogosphere from echoing him. The ever-reliable Michelle Malkin says the bill provides "funding for the left-wing housing entitlement thugs and heavily tax-subsidized fraudsters at ACORN." At the Corner, one of the National Review's blogs, Jack Fowler wrote that Democrats want to sprinkle the organization with "pixie dust," while Jonah Goldberg called the measure an effort "to funnel more shmundo to left wing shock troops."

There are a few different problems with this claim. First of all, the math cited by Graham and the rest is off. The language in question was added to the proposal by Sen. Chris Dodd, D-Conn., who chairs the Senate Banking Committee. It requires the federal government to set aside a certain portion of any profits realized on the eventual sale of the distressed assets that the Treasury would purchase under the plan. Thirteen percent of the profits would go to the Housing Trust Fund, which allocates money to state and local governments to support affordable housing development. Another 7 percent would go to the Capital Magnet Fund, a program operated by the Treasury that supports efforts to attract capital to poor areas.

There's not even any reason, at least at this point, to believe that any of the money allocated to the Housing Trust Fund would end up with ACORN.

Brenda Muniz, the organization's legislative director, told Salon that Graham's claim is "just ludicrous." ACORN itself claims to take no money at all from the government. ACORN Housing, an affiliated but ostensibly autonomous nonprofit that provides free housing counseling, is considering applying for funds from the Housing Trust Fund, but will probably not choose to do so. "It's unlikely that we stand to get anything," Muniz said. Because ACORN Housing's primary area of expertise is housing counseling -- which is not what the Trust Fund's grants are for -- Muniz said that it's "unlikely that they would take on something like that."

Even if local ACORN Housing affiliates did choose to apply for money from the Housing Trust Fund, they would have to go through the grant proposal process at the state and/or local level. The fund allocates money to state and local government agencies and trust funds, which in turn grant it to housing development organizations that make it through the application process.

By Gabriel Winant

Gabriel Winant is a graduate student in American history at Yale.

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2008 Elections Christopher Dodd D-conn.