ACORN Political Money Laundering in Texas
By Matthew Vadum
The taxpayer watchdog group Cause of Action is accusing the former Texas branch of ACORN of illegally diverting charitable funds for political activity benefiting Democrats.
ACORN’s Texas chapter may have changed its name but it still appears to be involved in the same kinds of financial shenanigans that made the radical group synonymous with corruption and sleaze. President Obama used to work for ACORN and represented it in court as an attorney.
There are two ACORN spinoff groups allegedly involved in the scheme.
They are the Texas Organizing Project (TOP), classified by the IRS as a 501c4 “social welfare” organization, and its sister group, the Texas Organizing Project Education Fund, a 501c3 charitable organization. The two legally separate nonprofit corporations were both created in December 2009, around the time Congress banned federal taxpayer funding of ACORN. ACORN was infamous for its embrace of the brutal in-your-face political tactics espoused by Rules for Radicals author Saul Alinsky.
Cause of Action says TOP used funds transferred to it by TOP Education Fund for political activity – a huge no-no according to federal tax law. This kind of accounting sleight-of-hand was standard operating procedure for the racketeers who ran the relentlessly corrupt ACORN network.
TOP and TOP Education Fund are engaging “in improper political activities under the radar of the IRS,” said Dan Epstein, executive director of Cause of Action. Epstein’s group is asking the IRS “to investigate these groups for potential abuses of their tax-exempt status, and to hold them accountable for any violations they find.”
In a letter to Treasury Inspector General for Tax Administration J. Russell George, Cause of Action states that the TOP Education Fund handed over about $640,000 –almost 80 percent of its revenues— to TOP in 2010. Among other things TOP has been promoting the candidacy of Mary Ann Perez, a Democrat seeking office as the state representative for House District 144 (Houston).
The reason this could be a big deal is because donors to 501c3 charities like the TOP Education Fund are entitled to deduct donations from their taxes on the theory that their money is being used to benefit society. Groups like TOP that are recognized under section 501c4 of the tax code are allowed to be a bit more nakedly political. The thinking is that political activities don’t benefit society as a whole so donors do not get to deduct donations to such groups from their taxes.
Using tax-exempt money for non-tax-exempt purposes amounts to partisan money-laundering, something ACORN routinely practiced.
With its 370-plus affiliated organizations, ACORN participated in what congressional investigators called a “shell-game of corporate financing” that enabled ACORN “to commingle funds and potentially divert federal monies into partisan activities in violation of federal law.”
As I reported in my book, Subversion Inc.: How Obama’s ACORN Red Shirts are Still Terrorizing and Ripping Off American Taxpayers, one progressive movement insider described ACORN as possibly “the most brilliantly orchestrated criminal organization set up in many a year.” TOP and the TOP Education Fund are two ACORN successor groups that were created in anticipation of the November 2010 bankruptcy filing of ACORN Inc. (the lead corporate entity that controlled the ACORN activist network). The two Texas nonprofits are part of a new network created to carry on ACORN’s work under other names. That new network consists of at least 25 new groups. Many of ACORN’s state-level chapters that incorporated as new nonprofit corporations are controlled by ACORN personnel. In some cases they operate out of the same office space that ACORN occupied.
TOP and the TOP Education Fund have extensive ties to the old ACORN network.
TOP is run by Ginny Goldman, who headed Texas ACORN. Former ACORN employee Allison Brim is an organizing director at TOP.
TOP’s president is Charlie (Carlos) Rodriguez, a veteran ACORN activist in El Paso who was previously a chief shop steward in a local of the International Brotherhood of Electrical Workers (IBEW). TOP’s treasurer is Steve Halvorson, an ACORN activist from Pasadena. Former ACORN member Melba Williams of Dallas is a member of TOP’s board of directors.
The TOP Education Fund’s deputy director is Michelle McClelen, who was head organizer for Texas ACORN and that group’s legislative director.
The Fund’s three most generous institutional donors in 2010 also underwrote the old ACORN network. Those philanthropies are George Soros’s Open Society Institute ($150,000), Marguerite Casey Foundation ($100,000), and the extremist Tides Foundation ($20,000).
Texas Organizing Project officials are practically salivating at the prospect of getting their hands on federal relief funds related to damage caused in 2008 by Hurricane Ike.
In May of this year Houston Mayor Annise Parker, the U.S. Department of Housing and Urban Development (HUD), and the Texas Organizing Project jointly announced that the city of Houston was expected to receive $151 million in “Hurricane Ike Disaster Recovery Round 2” funds held by the state’s General Land Office.
TOP helped to select which neighborhoods in Houston would receive the money. HUD Assistant Secretary Mercedes Marquez even commended Mayor Parker “for working together with TOP and other housing stake-holders and advocates to advance an initiative reflecting the community’s desire for comprehensive, targeted community development.”
Last year TOP’s Ginny Goldman returned the compliment, calling HUD’s Marquez a “true believer” in taxpayer-funded neighborhood revitalization schemes.
“We’re very confident that with HUD’s commitment and investment that we’re going to start to see things turn around not just with the hurricane recovery money, but with future federal housing dollars that come into this city,” Goldman said at the time.
Of course HUD Secretary Shaun Donovan is a longtime ACORN ally. Under his leadership HUD continued to shovel taxpayer money at ACORN even after Congress banned the practice.
No one should be surprised when the new Texas ACORN spinoff groups chow down on still more taxpayer dollars.
After all, that’s what these parasitic left-wing groups were organized to do.