ACORN sliding toward bankruptcy?

Embattled housing advocacy group ACORN could announce bankruptcy, officials say, after a raft of state chapters disbanded.

The indelible images of ACORN workers helping a faux pimp and prostitute set up a tax shelter for a brothel certainly played into the advocacy group’s slide toward bankruptcy, though its problems began long before last year’s scandal.

The New York Times is reporting that officials at the housing advocacy group will hold a teleconference this weekend to announce a bankruptcy filing. The group is reeling from a disbanding of at least 15 of its 30 state chapters in recent weeks, including the one in Maryland that served as the set for one of the most outrageous videos produced by conservative reporters James O’Keefe and Hannah Giles, and led to government agencies like the Census Bureau severing ties to ACORN.

The Monitor explains last year's ACORN controversy here.

To be sure, many conservatives, who have long viewed ACORN as representative of liberal voter fraud, are cheering the news. That includes St. Louis talk show host Mark Reardon, who twittered this morning: “Just heard ACORN is bankrupt! There's a little pick me up.”

Left-leaning observers took the news differently, of course. "Right Wing Downs Another Empowerment Group for the Poor: ACORN Near Bankruptcy," Buzzflash tweeted.

But a looming question now will be whether the Obama administration can save the organization. reports that the administration has quietly begun replacing payments to ACORN after a New York judge ruled that the Congressional de-funding of the organization was not constitutional.

ACORN was founded in Little Rock, Ark., in 1970 by community organizer Wade Rathke to help welfare recipients cover basic needs. Its original mission statement was to “unite welfare recipients with needy working people around issues such as school lunches, unempoyment, Vietnam veterans’ rights, and emergency room care.”

ACORN grew to 400,000 members who it could lean on to lobby for liberal causes, including pressuring banks to offer more favorable loans to the poor. But its successful voter registration programs were also marred by fraud allegations after some workers submitted forms signed by “Mickey Mouse” and other fictional characters.

Writes the New York Times this morning:

[L]ong before the activist videos delivered what may become the final blow, the organization was dogged for years by financial problems and accusations of fraud. In the summer of 2008, infighting erupted over embezzlement of Acorn funds by the brother of the organization’s founder. Some chapters were also found to have submitted voter application forms with incorrect information on them during the lead-up to the 2008 presidential election, leading to blistering charges from conservative organizations linking Acorn’s errors to the Obama campaign.

… “[I]f the organization had confronted its own internal problems, it might not have been taken down so easily,” said Sonja Merchant-Jones, former co-chairwoman of Acorn’s Maryland chapter.

To some, ACORN has itself to blame for its problems. “ACORN was not a group that politely sought redress … it was loud and brash and conveyed an attitude that the righteousness of its mission justified whatever tactics were expedient in the battle of The People vs. The Man,” writes the Baltimore Sun in a recent editorial titled, "Good riddance, ACORN."

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