Economy  
comments_image Comments

ACORN: The Most Cost-Effective Investment the Government (and Foundations) Have Ever Made

The real purpose of the right's attacks on ACORN is to destroy a remarkably successful 50-year-old grassroots model for defending the poor and workers.

Continued from previous page

 
 
Share
 
 
 

ACORN has reportedly received about $53 million since 1994 from the federal government, about $3.5 million a year. If so, it must be the most cost-effective investment the federal government has ever made, assuming the investment was made to help the poor.

In 2005, ACORN did an analysis of how much money its activities had generated for low- and moderate-income households in the 10-year period from 1995 to 2004.

One should, of course, approach the findings of an internal report cautiously. But its methodology is transparent and sound. It counts, for example, only those campaigns in which it played the lead role.

The conclusion? Over 10 years, ACORN's direct services and local and state campaigns generated monetary benefits for lower-income households totaling some $15 billion, or $1.5 billion a year. This includes the impact of enacting living-wage or minimum-wage or predatory-lending ordinances or statutes.

The recent video of an ACORN employee giving tax advice to a make-believe prostitute and her "pimp" to engage in a make-believe crime is certainly damning.

But we should compare the swift punitive reaction by Congress and the media to that video with their reactions to real-world tax advice given by huge accounting firms to the richest of us that resulted in real-world millions of foreclosures and millions more plunging into poverty.

We don't have the tape of executives at the giant accounting firm KPMG dreaming up a new intangible asset that would save its client WorldCom millions in state taxes.

The new asset was called "foresight of top management." Shortly thereafter, the foresight of WorldCom's top management resulted in a 25-year prison sentence for WorldCom's CEO and five years for its CFO.

On the anniversary of the September 2008 financial meltdown, a plaintive CNN headline asks, "Will any Wall Streeters go to jail for this? … Why vengeance over the financial crisis is so elusive."

Or consider the reaction by Congress and the media to cases where the misdeeds of profit-making businesses actually kill people.

There have been four documented fatalities of soldiers from electrocution while showering in Iraqi barracks whose electrical wiring was installed by KBR.

Until 2007, KBR was a subsidiary of Halliburton. Unlike in the case of ACORN, after the allegations became public, the federal government didn't rush to cancel KBR contracts.

Instead, the Republicans stayed mum, and the Pentagon paid KBR huge bonuses. In early 2009, the Pentagon awarded KBR a $35 million contract for more electrical work even while the company was under a criminal investigation for two electrocution deaths, according to Pratap Chatterjee, former executive director of CorpWatch and the author of Halliburton's Army .

If the misdeeds of individuals at ACORN are the problem, ACORN's swift action in bringing on an independent board to conduct an internal audit is the answer, not cutting off funds or pillorying the organization.

But improving internal controls isn't the right wing's end game. Destroying a remarkably successful 50-year-old grassroots model for defending the poor and workers is.

An improved management structure may well be necessary.

But the desperate situation facing tens of millions of households in the country, and the reticence of Congress and the White House to act firmly on their behalf, makes this a time when foundations, for example, should expand, not contract, their financial support to ACORN.

And perhaps Congress and the federal government could pull a Halliburton and double ACORN's contracts after its missteps became known.

David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis andis director of its New Rules project.

 
See more stories tagged with: