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ACORN [Association of Community Organizations for Reform Now]
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Records of the Office of Cabinet Affairs (Clinton Administration)
Jennifer O'Connor's Files
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FOIA Number: 2016-0532-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Cabinet Affairs
Series/Staff Member:
Jennifer O'Connor
Subseries:
OA/ID Number:
7308
FolderID:
Folder Title:
ACORN [Association of Community Organizations for Reform Now]
Stack:
Row:
Section:
Shelf:
Position:
S
24
3
9
1
Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. memo
To: Jennifer O'Connor; From: Jerry Jones; Re: Meeting on October 3;
09/29/1995
b(6)
PII [partial] (1 page)
COLLECTION:
Clinton Presidential Records
Cabinet Affairs
O'Connor, Jennifer
OA/Box Number: 7308
FOLDER TITLE:
ACORN [Association of Community Organizations for Reform Now]
2016-0532-F
sb1150
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
501-376-3952
01/7/95
07:20AM
D2/4
ACORN
523 W 15th Street
Little Rock, Arkansas 72202
(501) 376-7151 phone (501) 376-3952 fax
MEMORANDUM
8/5/95
To:
Jennifer O'Connor
From:
Zach Polott
RE:
Acorn Housing Corporation (AHC) and AmeriCorps
We believe that a grave injustice is being done to Acorn
Housing Corporation (AHC), its AmeriCorps project through
which AmeriCorps volunteers help low-income families become
homeowners, and the low-to-moderate income urban communities
of color that it primarily serves.
Here is the background and timeline information you
requested:
1) AHC's AmeriCorps project has been extremely successful
in producing benefits for the low-to-moderate income
community that it serves. Some numbers:
** AHC's AmeriCorps project has conducted 4932 intakes of
low-to-moderate income tamilies seeking private sector
financing [UI home purchases.
** 757 of these families have already submitted
applications to financial institutions for home mortgages.
** Based on AHC's experience from the first 6 months of the
project that 90% of these mortgage applications will be
approved, 681 of these 757 applications will get loans
* * $34 million of private capital has been re-invested
into low-income communities, financing these home purchases,
as a direct result of the AHC AmeriCorps project.
2) On July 19 Corporation tor National Service (CNS)
director Eli Seyal faxed a letter Lo AHC suspending its
AmeriCorps project effective July 21, bacod upon|a
preliminary report from CNS's inspector-general. (NOTE:
That report slated that the I-G did not find any evidence of
AmeriCorps Members participating in the March 6 demonstration
sponsored by ACORN.)
3) Neither AHC nor its attorneys were able to get a copy of
this preliminary report from the I-G until 5 days after the
suspension, 30 there was no way that AHC could respond.
Zach Polett
501-376-3952
8/7/95
20AM
3/4
1) AHC has until Friday, August 11 to respond to the
suspension. Its attorneys are in the process of preparing
that response.
5) Timeline: It is my understanding that following the
receipt of this response CNS will schedule a hearing.
Because a suspension is for 30 days, CNS needs to hold this
hearing by 8/20. For AHC to prevail in this hearing, which
is conducted by a hearing officer selected by CNS, it would
have to meet the standard of proof that CNS's action was
"arbitrary and capricious" which is legally an extremely
difficult standard to meet.
6) Following this hearing CNS can, if it chooses, terminate
the grant for cause. AHC would undoubtedly challenge such
termination legally, but the negative ramitications would
still be great.
7) If CNS terminates the grant, the losses to AHC, the
clients, and the affected communities will be severe. FOR
example:
* * The clients who have already come to AIIC to get
loan counseling and home mortgages will have no counselor to
help them through the rest of the process until their loan is
ready to close. This is a critical time in the home mortgage
process, especially for lower-income borrowers.
+ + The communities will lose the ability for more
tamilies to get. loan counseling and home loans and for whata
would likely be another $34 million of private financing
invested into those low-to-modcrato income urban communities.
* * AHC will lose the approximately 3450,000 $500,000
of the $950,000 AmeriCorps grant that has not yct bcen
expended.
* * AHC will face the danger of being barred from
seeking any additional federal grants or contracts from any
other federal agencies for the affordable housing, loan
counseling and non-profit housing development work that it
does around the country.
* * If the grant is terminated for cause, AHC will then
have to explain this on every federal -- and any local and
state grant applications it ever makes in the future.
AHC's counsel believes that this is likely to hurt. AHC in
securing any future grants. It would act as an albatross
around AHC's neck, knocking off a fcw points from scores on
grant applications that. would likely be enough ot a negative
factor Lo sink the applications.
8) From the beginnings of the right-wing attacks on AHC's
AmeriCorps project, CNS officials have shown a marked
501-376-3952
8/7/95
07:20AM
4/4
disinterest to communicate with AIIC. For example, both John
Walters, president of The New Citizenship Project and the
Washington Times have consistently gotten more, earlier and
better information from CNS than AIIC has. In a letter to the
Washington Times published on April 10 John Walters wrote
that the CNS board had ordered an investigation of AHC. AHC
had heard nothing about an investigation, 30 on April 11
AHC's executive director called CNS to ask if it was being
investigated. He left 3 messaqes for AHC's program officer
at CNS, but received no return call. He also called her
supervisor, but did not get a return call. He tinally
reached their grants officer al CNS who Lold him that he
didn't know anything about an invostigation. One wook later,
this grants officer called back to say that the 1G was
conducting all investigation.
Similarly, the same day (July 19) that CNS notified AHC of
the suspension of its AmeriCorps project, Eli Segal sent a
letter about the suspension to Congress. AHC was not
informed about this immediate communication to Congress and
only found out about it the next day when a copy of the
letter was gloatingly faxed to AHC by New Citizenship Project
president John Walters.
9) AHC has had to hire outside counsel to represent it. in
this investiqation, at the cost of tens of thousands of
dollars. The officials at CNS with whom AHC's counsel is now
communicating are general counsel Terry Russell and senior
program officer Simon Woodard.
10) Many months ago, AHC submitted its application to CNS
[UI FY95 second year funding [UI its AmeriCorps project. IL
has not yet received an answer as to CNS's approval or
rejection of that application.
CONCLUSION
Frankly, we think that the way that AHC and its AmeriCorps
project have been treated by CNS has been unfriendly and
unprotessional. AHC would like to be able to complete the
work of its first year AmeriCorps grant. In addition, AHC
continues to bc willing to mcct with CNS officials to
constructively discuss any problems and to resolve those
problems in a satisfactory manner.
If such a meeting is to occur, it needs to happen within the
next week or two and certainly not later than August 10,
given the timeline decribed above.
Thank you for your attention to this matter.
Rele Allen >> 565
2784
4
R. Allen
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: SDB DATE: 4/14/16
CONFIDENTIAL
2016-0532-F
May not be released
in any form
CORPORATION
July 17, 1995
FOR NATIONAL
Eli Segal, Chief Executive Officer
SERVICE
Corporation for National Service
Re: ACORN Housing Corporation
Dear Mr. Segal:
My letter to you, dated April 20. 1995, established an understanding hetween the Corporation for
National Service (CNS) and the Office Inspector General (OIG) on the scope of audit work OIG
would undertake at your request regarding ACORN Housing Corporation (AHC). As stated in that
letter, we were to conduct audit work in the following four areas:
Determining whether any of AHC's AmeriCorps Members participated in the
demonstration in Washington. D.C. sponsored by the Association of Community
Organizations for Reform Now (ACORN) on March 6, 1995.
Ascertaining whether AHC and ACORN are separate entities.
Determining whether AHC used AmeriCorps grant funds to benefit ACORN either
directly or indirectly.
Examining costs charged to the AmeriCorps grant to determine if AHC has an
accounting system that supports Federal reporting requirements and properly
accumulates grant charges in the AHC general ledger, and, to the extent possible,
testing the propriety of data maintained in the system.
As you know, during our audit we received a Hotline complaint from a former AHC AmeriCorps
Member. This complaint alleged that AHC AmeriCorps Members were being improperly used to
recruit members for ACORN.
The purpose of this letter is to advise you of the status of our audit. and of the preliminary results
of our investigation into the Hotline complaint. While it is not the normal practice of this office to
reveal the preliminary results of an ongoing investigation, you and your staff asked for regular
briefings on these matters, and for the recommendations of OIG. The evidence we have collected
1100 Vermont Avenue, NW
Washington, DC 20525
Telephone 202-606-5000
Fax 202-606-1928
Gotting Things Done.
AmeriCorps, National Service
Learn and Serve America
National Senior Service Corps
15:15 56. 60 any
202 628
SNC
to date causes me to have serious concerns about the advisability of CNS continuing its relationship
with AHC.
Summary
In regard to the areas included in our audit, we have not found any evidence of AmeriCorps
Members participating in the March 6 demonstration sponsored by ACORN, although we have
determined that (contrary to what CNS had been informed by AHC) the AmeriCorps grant-funded
AHC supervisor in AHC's Washington, D.C. office took an unpaid "personal day" to participate in
the demonstration. The scope of our work in this area has been impeded, however, because AHC
has placed conditions on our interviews that limit our ability to develop reliable information. We
have determined that AHC and ACORN are separate corporate entities, but that they do not always
operate at arm's length. Finally, the documentation and information provided to support
approximately $94 thousand of costs charged to the grant as of April 28, 1995, is inadequate to
establish that the costs are allowable under the grant and applicable regulations.
In regard to the investigation, the evidence we have collected to date indicates that AHC has
directed, condoned, and allowed the use of some of its AmeriCorps Members as conduits for
recruiting new ACORN members. We have issued subpoenas to AHC and ACORN for documents
that will allow us to assess the impact of this practice. Although AHC has agreed to provide the
documents listed in our subpoena, ACORN has stated that, with regard to any nonpublic
information, it will refuse to respond to our subpoena. Nonetheless, we believe that we have
sufficient evidence to conclude that AHC has violated the provisions of the National and Community
Service Act, as amended, CNS regulations, and the AmeriCorps grant agreement prohibiting AHC
from using AmeriCorps positions to benefit advocacy organizations.
Status of OIG Audit Regarding AHC
Regarding AmeriCorps Member participation in the March 6 demonstration, our review of AHC's
financial records found no evidence that AHC used AmeriCorps grant funds to pay for travel
expenses that would have placed AHC staff or AmeriCorps Members in Washington, D.C. on March
6, 1995. In addition, we have interviewed 15 of the 17 grant-funded AHC staff and AmeriCorps
Members who were working in AHC offices in Washington, D.C.; Philadelphia, Pennsylvania; and
Brooklyn, New York (those most likely to have been present at the demonstration without incurring
travel expenses). During these interviews, the grant-funded AHC supervisor in AHC's Washington,
D.C. office stated that she took an unpaid "personal day" to participate in the March 6
demonstration. This employee's time sheet for the month of March reflects that the employee did
not record any time worked on March 6, 1995.
I The two remaining people, one AmeriCorps Members and one AHC supervisor, are no longer working for AHC.
We are continuing our efforts to contact these individuals.
Page 2
13:32 S6. 60 ILL
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to date causes me to have serious concerns about the advisability of CNS continuing its relationship
with AHC.
Summary
In regard to the areas included in our audit, we have not found any evidence of AmeriCorps
Members participating in the March 6 demonstration sponsored by ACORN, although we have
determined that (contrary to what CNS had been informed by AHC) the AmeriCorps grant-funded
AHC supervisor in AHC's Washington, D.C. office took an unpaid "personal day" to participate in
the demonstration. The scope of our work in this area has been impeded, however, because AHC
has placed conditions on our interviews that limit our ability to develop reliable information. We
have determined that AHC and ACORN are separate corporate entities, but that they do not always
operate at arm's length. Finally, the documentation and information provided to support
approximately $94 thousand of costs charged to the grant as of April 28, 1995, is inadequate to
establish that the costs are allowable under the grant and applicable regulations.
In regard to the investigation, the evidence we have collected to date indicates that AHC has
directed, condoned, and allowed the use of some of its AmeriCorps Members as conduits for
recruiting new ACORN members. We have issued subpoenas to AHC and ACORN for documents
that will allow us to assess the impact of this practice. Although AHC has agreed to provide the
documents listed in our subpoena, ACORN has stated that, with regard to any nonpublic
information, it will refuse to respond to our subpoena. Nonetheless, we believe that we have
sufficient evidence to conclude that AHC has violated the provisions of the National and Community
Service Act, as amended, CNS regulations, and the AmeriCorps grant agreement prohibiting AHC
from using AmeriCorps positions to benefit advocacy organizations.
Status of OIG Audit Regarding AHC
Regarding AmeriCorps Member participation in the March 6 demonstration, our review of AHC's
financial records found no evidence that AHC used AmeriCorps grant funds to pay for travel
expenses that would have placed AHC staff or AmeriCorps Members in Washington, D.C. on March
6, 1995. In addition, we have interviewed 15 of the 17 grant-funded AHC staff and AmeriCorps
Members who were working in AHC offices in Washington, D.C.; Philadelphia, Pennsylvania; and
Brooklyn, New York (those most likely to have been present at the demonstration without incurring
travel expenses).¹ During these interviews, the grant-funded AHC supervisor in AHC's Washington,
D.C. office stated that she took an unpaid "personal day" to participate in the March 6
demonstration. This employee's time sheet for the month of March reflects that the employee did
not record any time worked on March 6, 1995.
1 The two remaining people, one AmeriCorps Members and one AHC supervisor, are no longer working for AHC.
We are continuing our efforts to contact these three individuals.
Page 2
13:32 S6. 60 ING
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Our audit notification letter issued on April 26, 1995, advised AHC that our procedures would
include interviewing AmeriCorps Members and AmeriCorps grant-funded AHC staff at each AHC
location participating in the AmeriCorps program. During our audit, we conducted 12 interviews
in private. However, on May 10, 1995, we were contacted by AHC's outside counsel, who stated
that we must make all further requests for information regarding AHC through him. After
discussions with AHC's counsel, we conducted an additional six interviews in the presence of
AHC's counsel. We also advised you as well as AHC's counsel that, under our governing auditing
standards, interviews conducted in the presence of third parties are not considered as reliable as
private interviews. Given this lower level of reliability, I subsequently decided that the expense of
conducting further interviews in AHC's offices in Dallas, Houston, Phocnix, Denver and Chicago
was not warranted and agreed to accept affidavits from the AHC AmcriCorps Members and staff in
those cities. We have received declarations signed under penalty of perjury from 17 current
AmeriCorps Members and AIIC staff in those cities, all of whom state that they did not participate
in the March 6 demonstration. There are three AmeriCorps Members and one AHC supervisor from
these cities that are no longer working for AIIC. We are continuing our efforts to contact these
individuals.
Nonctheless, because of the restrictions on our audit scope, we will not be able to produce a
sufficient amount of independent and creditable evidence to form an independent conclusion on
whether AmeriCorps Members participated in the March 6 demonstration. Our conclusion on this
issue will be limited to a statement of the extent to which the evidence we collected confirms or
contradicts AHC's assertions that AmeriCorps Members and AHC staff did not participate in the
March 6 demonstration, and our final audit report will describe the constraints that AHC has placed
on our interviews.
Regarding whether AHC and ACORN are separate entities, we have established that they are
separately incorporated. AHC is a Louisiana nonprofit corporation incorporated on March 13, 1985.
ACORN is an Arkansas nonprofit corporation chartered on January 5, 1977. However, it appears
that AHC and ACORN do not always operate at-arms-length from one another. Not only have we
found references to ACORN having "created" AHC to serve purposes common to both
organizations, we noted numerous transactions and activities involving AHC and other "fraternal"
ACORN-related corporations. These transactions include some of the questioned costs discussed
below. The coordination of AHC and ACORN activities is also the subject of our investigation
discussed below.
Regarding the final two issues (related to application of AHC's AmeriCorps grant funds), our audit
is incomplete. Of the approximately $460 thousand in AmeriCorps program costs that AHC
recorded from October 1, 1994 to April 28, 1995, we have identified costs of about $94 thousand
which we are questioning because the information provided to us by AHC from its accounting
records and other sources has not established that these costs are allowable under the grant
agreement and applicable regulations. Certain of these costs appear to have been paid to AHC or
ACORN related parties. On June 30, 1995, we advised AHC of our concerns related to these costs,
Page 3
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and advised AHC that without additional documentation or information to support these costs, CNS
may disallow them as charges to the AmeriCorps grant.
Preliminary Results of Investigation of Hotline Complaint
As a direct result of OIG investigators conducting interviews during our initial AHC audit, we
received a Hotline complaint that AmeriCorps Members were being improperly used to benefit
ACORN. Specifically, a former AmeriCorps Member in New Orleans alleged that AHC has
required its AmeriCorps Members to help ACORN recruit of members. We then began an
investigation to find out whether these allegations were true.
The focus of this ongoing investigation is to determine whether AHC has violated the terms of the
National and Community Service Act of 1990, as amended (NCSA), 42 U.S.C. § 12584(a)(5), CNS
regulations, 45 C.F.R. § 2520.30, and the grant agreement between the CNS and AHC. Under these
authorities, AHC may not direct its AmeriCorps Members to provide a direct benefit to any nonprofit
organization that does not comply with the restrictions contained in section 501(c) of the Internal
Revenue Code. Thus, AHC may not direct its AmeriCorps Members to provide a direct benefit to
any organization "[a] substantial part of the activities of which is carrying on propaganda, or
otherwise attempting, to influence legislation," or any organization that "participate[s] in, or
intervene[s] in any political campaign on behalf of (or in opposition to) any candidate for public
office."2
Our review of material describing ACORN's activities during the term of AHC's grant shows that
ACORN has devoted a substantial portion of its activity to attempts to influence legislation. Since
June of 1994, ACORN representatives have engaged in extensive lobbying efforts (including a
March 1995 Legislative and Political Conference) aimed at members of Congress. A recent edition
of ACORN's newsletter, United States of ACORN, urged ACORN members to call a toll-free
legislative hotline. When called, this phone number gives a brief recorded description of "this
month's legislative issue," and then forwards the call to the U.S. Capitol switchboard so that the
operator can connect callers to the appropriate congressional office. ACORN has also been active
in state legislative matters, including obtaining signatures to put a campaign finance proposition on
a statewide ballot in Missouri. Finally, ACORN has been active in campaigns for political office,
including endorsements of specific candidates in the 1993 and 1994 elections.
In our view, these ACORN activities are sufficient to bring direct support of ACORN by
AmeriCorps Members under the prohibition contained in the NCSA, CNS regulation, and grant
agreement on directly benefiting advocacy organizations. Accordingly, our investigative effort has
focused on the extent to which AHC has directed AmeriCorps Members to perform activities that
directly benefited ACORN. From the information obtained from the Hotline complainant, and other
2 See, 26 U.S.C. § 501(c)(3). Although NCSA only refers to "the restrictions contained in section 501(c) of Title
26," 42 U.S.C. § 12584(a)(5), the legislative history of the act specifically refers to the restrictions governing 501(c)(3)
nonprofit organizations, H.R. Conf. Rep. No. 219, 103d Cong, 1st Sess. 149 (1993).
Page 4
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leads and information independently developed by OIG, we have obtained sworn statements or
documentary evidence of the following:
An "ACORN Housing Corporation - Loan Counselors Training Manual" made available to
AmeriCorps Members from various cities provides a detailed description of ACORN's goals
and activities, and encourages loan counselors to advocate membership in ACORN to loan
counseling clients. The manual contains detailed descriptions of how to conduct intake
sessions and informational seminars, including providing specific opportunities for people
interested in obtaining loan counseling to be recruited by ACORN representatives. A sample
handout included in the manual to be given to prospective loan counseling clients describes
the information and documentation needed at "an intake session," and states that clients
"must" bring a $60 check or money order for ACORN membership dues (see attached
copy).
An AHC supervisor in New Orleans threatened two AmeriCorps Members with "immediate
termination" if they failed to follow the "national loan counseling policy" of bringing loan
counseling clients to ACORN organizers to be solicited for membership in ACORN. Bruce
Dorpalen, AHC's AmeriCorps Program Director, was noted as receiving a copy of
memoranda concerning this matter.
A local ACORN official in Dallas stated that the only reason for having the AmeriCorps
program was to gain new ACORN members, and that if AmeriCorps loan counseling clients
did not start becoming ACORN members, she could and would halt the AmeriCorps project.
This ACORN official specifically directed AmeriCorps Members to solicit membership in
ACORN.
AHC officials in Dallas told AmeriCorps Members to give loan counseling clients who
became ACORN members priority scheduling and access to assistance (including some
financial assistance) over the clients that did not join ACORN.
An AHC loan counseling client in New Orleans (who is a retired high school business
teacher) was escorted by an AmeriCorps Member to an ACORN Organizer who solicited
membership in ACORN. The client felt like she was not going to be allowed to leave until
she gave the ACORN Organizer a $60 check, or authorized a $5 per month automatic bank
draft for ACORN membership dues. The client gave the Organizer a postdated check for
$60 and received an ACORN membership card. The client later asked for her check to be
returned. After telling her it could not be returned, and again soliciting membership in
ACORN, the Organizer returned the check.
AHC officials in Phoenix required an AmeriCorps Member, in addition to her loan
counseling duties, to conduct housing committee meetings of all area ACORN members.
She was also told to contact the area ACORN members about an anniversary picnic for
ACORN, which she refused to do.
Page 5
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Although they were told only ACORN representatives should actually collect ACORN
membership dues, several AmeriCorps Members stated that, as part of their training, they
were told to describe to prospective loan counseling clients the accomplishments of ACORN
and the reasons why the prospective clients should join ACORN.
The evidence we have collected indicates that AHC has directed, condoned, and allowed the use of
some of its AmeriCorps Members as conduits for recruiting new ACORN members. Moreover, the
evidence indicates that this practice is not isolated. In New Orleans and Dallas, where AHC has
AmeriCorps loan counselors co-located with ACORN recruiters, the evidence shows that there was
specific pressure placed on AmeriCorps Members to assist in recruiting new ACORN members.
Further, AmeriCorps Members in Phoenix (where there are no ACORN recruiters) specifically
recalled being told in AHC training sessions that they should tell prospective clients about
ACORN's goals and activities.
To determine the impact of this practice has had on actual ACORN membership and fund raising,
we issued subpoenas to both AHC and ACORN on June 20, 1995. The subpoenas require AHC and
ACORN to produce documents which will allow us to identify the prospective AHC loan counseling
clients who were recruited and then joined ACORN, and other people who joined ACORN in part
because of the loan counseling available from AmeriCorps Members. The return date on the
subpoenas was July 7, 1995. AHC has told us that they will comply with the subpoena, but asked
for an extension of the return date. We received AHC's response to the subpoena on July 14, 1995,
and are reviewing those documents. ACORN, however, has asserted that the subpoena is beyond
our authority, and stated that it will only provide information already available to the public.
Conclusion
You requested that we complete our audit in time for CNS to consider the results while reviewing
AHC's request for renewal of its AmeriCorps grant. Regrettably, our work remains incomplete,
largely because of the impediments imposed by AHC and ACORN. Nonetheless, I believe that we
have sufficient evidence from our investigation to conclude that AHC has violated the NCSA, CNS
regulations, and grant agreement by using AmeriCorps positions to benefit ACORN. Because of
your specific request for timely information in this matter, I have decided to provide you with this
interim report of the results of our ongoing audit and investigation. Please advise me of whatever
additional assistance we can offer as we continue our work in these matters.
Yours truly,
Lan.J.Judan
Luise S. Jordan
Inspector General
Page 6
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ACORN Housing
Corporation
Your next step in the Loan Counseling Program is an
intake session which is scheduled for:
Date:
Wednesday, April 13, 1994
Time:
7:00 P.M.
Place:
ACORN Housing Corporation
846 North Main Street
City
To get there by mass transit, take the Blue Line to Main Street, walk
south two blocks, or take the #30 bus and get off at Main and Park.
If you drive, there is a parking lot across the street.
BE SURE TO BRING PHOTOCOPIES of all of
the following documents which apply to you:
three current paystubs for all employment
past two years tax returns and W-2's
award letter or proof of other sources of income
(including public assistance, SSI, worker's compensation)
court order for child support/alimony you receive
last three months bank statements for all accounts
(checking and saving)
You must also bring:
$10 for your credit report
$60 ACORN membership dues
(check or money order)
If you cannot keep your appointment, or you have any
questions, please call 234-5678
Training
Manual
Page
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R. Allen
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: SDB DATE: 4/14/16
CONF: CONFIDENTIAL I DENTIAL
2016-0532-F
May not be released
in any form
CORPORATION
July 17, 1995
FOR NATIONAL
Eli Segal, Chief Executive Officer
*
SERVICE
Corporation for National Service
Re: ACORN Housing Corporation
Dear Mr. Segal:
My letter to you, dated April 20. 1995, established an understanding between the Corporation for
National Service (CNS) and the Office Inspector General (OIG) on the scope of audit work OIG
would undertake at your request regarding ACORN Housing Corporation (AHC). As stated in that
AUDIT
letter, we were to conduct audit work in the following four areas:
OF
Determining whether any of AHC's AmeriCorps Members participated in the
ACORN-
demonstration in Washington. D.C. sponsored by the Association of Community
Organizations for Reform Now (ACORN) on March 6, 1995.
Ascertaining whether AHC and ACORN are separate entities.
Determining whether AHC used AmeriCorps grant funds to benefit ACORN either
directly or indirectly.
Examining costs charged to the AmeriCorps grant to determine if AHC has an
accounting system that supports Federal reporting requirements and properly
accumulates grant charges in the AHC general ledger, and, to the extent possible,
testing the propriety of data maintained in the system.
As you know, during our audit we received a Hotline complaint from a former AHC AmeriCorps
Member. This complaint alleged that AHC AmeriCorps Members were being improperly used to
recruit members for ACORN.
The purpose of this letter is to advise you of the status of our audit. and of the preliminary results
of our investigation into the Hotline complaint. While it is not the normal practice of this office to
reveal the preliminary results of an ongoing investigation, you and your staff asked for regular
briefings on these matters, and for the recommendations of OIG. The evidence we have collected
1100 Vermont Avenue, NW
Washington, DC 20525
Telephone 202-606-5000
Fax 202-606-1928
Getting Things Dune.
AmeriCorps National Service
Learn and Serve America
National Senior Service Corpe
to date causes me to have serious concerns about the advisability of CNS continuing its relationship
with AHC.
Summary
In regard to the areas included in our audit, we have not found any evidence of AmeriCorps
Members participating in the March 6 demonstration sponsored by ACORN, although we have
determined that (contrary to what CNS had been informed by AHC) the AmeriCorps grant-funded
AHC supervisor in AHC's Washington, D.C. office took an unpaid "personal day" to participate in
the demonstration. The scope of our work in this area has been impeded, however, because AHC
has placed conditions on our interviews that limit our ability to develop reliable information. We
have determined that AHC and ACORN are separate corporate entities, but that they do not always
operate at arm's length. Finally, the documentation and information provided to support
approximately $94 thousand of costs charged to the grant as of April 28, 1995, is inadequate to
establish that the costs are allowable under the grant and applicable regulations.
In regard to the investigation, the evidence we have collected to date indicates that AHC has
directed, condoned, and allowed the use of some of its AmeriCorps Members as conduits for
recruiting new ACORN members. We have issued subpoenas to AHC and ACORN for documents
that will allow us to assess the impact of this practice. Although AHC has agreed to provide the
documents listed in our subpoena, ACORN has stated that, with regard to any nonpublic
information, it will refuse to respond to our subpoena. Nonetheless, we believe that we have
sufficient evidence to conclude that AHC has violated the provisions of the National and Community
Service Act, as amended, CNS regulations, and the AmeriCorps grant agreement prohibiting AHC
from using AmeriCorps positions to benefit advocacy organizations.
Status of OIG Audit Regarding AHC
Regarding AmeriCorps Member participation in the March 6 demonstration, our review of AHC's
financial records found no evidence that AHC used AmeriCorps grant funds to pay for travel
expenses that would have placed AHC staff or AmeriCorps Members in Washington, D.C. on March
6, 1995. In addition, we have interviewed 15 of the 17 grant-funded AHC staff and AmeriCorps
Members who were working in AHC offices in Washington, D.C.; Philadelphia, Pennsylvania; and
Brooklyn, New York (those most likely to have been present at the demonstration without incurring
travel expenses). During these interviews, the grant-funded AHC supervisor in AHC's Washington,
D.C. office stated that she took an unpaid "personal day" to participate in the March 6
demonstration. This employee's time sheet for the month of March reflects that the employee did
not record any time worked on March 6, 1995.
I The two remaining people, one AmeriCorps Members and one AHC supervisor, are no longer working for AHC.
We are continuing our efforts to contact these individuals.
Page 2
Our audit notification letter issued on April 26, 1995, advised AHC that our procedures would
include interviewing AmeriCorps Members and AmeriCorps grant-funded AHC staff at each AHC
location participating in the AmeriCorps program. During our audit, we conducted 12 interviews
in private. However, on May 10, 1995, we were contacted by AHC's outside counsel, who stated
that we must make all further requests for information regarding AHC through him. After
discussions with AHC's counsel, we conducted an additional six interviews in the presence of
AHC's counsel. We also advised you as well as AHC's counsel that, under our governing auditing
standards, interviews conducted in the presence of third parties are not considered as reliable as
#1-PART. ISSUE
private interviews. Given this lower level of reliability, I subsequently decided that the expense of
conducting further interviews in AHC's offices in Dallas, Houston, Phocnix, Denver and Chicago
was not warranted and agreed to accept affidavits from the AHC AmcriCorps Members and staff in
IN 3/6 RALLY
those cities. We have received declarations signed under penalty of perjury from 17 current
NO EVID. But
AmeriCorps Members and AIIC staff in those cities, all of whom state that they did not participate
in the March 6 demonstration. There are three AmeriCorps Members and one AHC supervisor from
these cities that are no longer working for AIIC. We are continuing our efforts to contact these
CAN BE
Not ALL
individuals.
Noncthcless, because of the restrictions on our audit scope, we will not be able to produce a
sufficient amount of independent and creditable evidence to form an independent conclusion on
CONFIRMED INDER
whether AmeriCorps Members participated in the March 6 demonstration. Our conclusion on this
issue will be limited to a statement of the extent to which the evidence we collected confirms or
contradicts AHC's assertions that AmeriCorps Members and AHC staff did not participate in the
March 6 demonstration, and our final audit report will describe the constraints that AHC has placed
on our interviews.
Regarding whether AHC and ACORN are separate entities, we have established that they are
SEP
separately incorporated. AHC is a Louisiana nonprofit corporation incorporated on March 13, 1985.
ACORN is an Arkansas nonprofit corporation chartered on January 5, 1977. However, it appears
CORP.
that AHC and ACORN do not always operate at-arms-length from one another. Not only have we
BUT NOT
found references to ACORN having "created" AHC to serve purposes common to both
organizations, we noted numerous transactions and activities involving AHC and other "fraternal"
AT ARMS
ACORN-related corporations. These transactions include some of the questioned costs discussed
LENGTH
below. The coordination of AHC and ACORN activities is also the subject of our investigation
discussed below.
Regarding the final two issues (related to application of AHC's AmeriCorps grant funds), our audit
is incomplete. Of the approximately $460 thousand in AmeriCorps program costs that AHC
recorded from October 1, 1994 to April 28, 1995, we have identified costs of about $94 thousand
which we are questioning because the information provided to us by AHC from its accounting
records and other sources has not established that these costs are allowable under the grant
agreement and applicable regulations. Certain of these costs appear to have been paid to AHC or
ACORN related parties. On June 30, 1995, we advised AHC of our concerns related to these costs,
Page 3
and advised AHC that without additional documentation or information to support these costs, CNS
3+4
may disallow them as charges to the AmeriCorps grant.
Preliminary Results of Investigation of Hotline Complaint
As a direct result of OIG investigators conducting interviews during our initial AHC audit, we
received a Hotline complaint that AmeriCorps Members were being improperly used to benefit
ACORN. Specifically, a former AmeriCorps Member in New Orleans alleged that AHC has
required its AmeriCorps Members to help ACORN recruit of members. We then began an
investigation to find out whether these allegations were true.
The focus of this ongoing investigation is to determine whether AHC has violated the terms of the
National and Community Service Act of 1990, as amended (NCSA), 42 U.S.C. § 12584(a)(5), CNS
regulations, 45 C.F.R. § 2520.30, and the grant agreement between the CNS and AHC. Under these
authorities, AHC may not direct its AmeriCorps Members to provide a direct benefit to any nonprofit
organization that does not comply with the restrictions contained in section 501(c) of the Internal
Revenue Code. Thus, AHC may not direct its AmeriCorps Members to provide a direct benefit to
any organization "[a] substantial part of the activities of which is carrying on propaganda, or
otherwise attempting, to influence legislation," or any organization that "participate[s] in, or
intervene[s] in any political campaign on behalf of (or in opposition to) any candidate for public
office."2
Our review of material describing ACORN's activities during the term of AHC's grant shows that
ACORN has devoted a substantial portion of its activity to attempts to influence legislation. Since
June of 1994, ACORN representatives have engaged in extensive lobbying efforts (including a
March 1995 Legislative and Political Conference) aimed at members of Congress. A recent edition
of ACORN's newsletter, United States of ACORN, urged ACORN members to call a toll-free
legislative hotline. When called, this phone number gives a brief recorded description of "this
month's legislative issue," and then forwards the call to the U.S. Capitol switchboard so that the
operator can connect callers to the appropriate congressional office. ACORN has also been active
in state legislative matters, including obtaining signatures to put a campaign finance proposition on
a statewide ballot in Missouri. Finally, ACORN has been active in campaigns for political office,
including endorsements of specific candidates in the 1993 and 1994 elections.
In our view, these ACORN activities are sufficient to bring direct support of ACORN by
AmeriCorps Members under the prohibition contained in the NCSA, CNS regulation, and grant
agreement on directly benefiting advocacy organizations. Accordingly, our investigative effort has
focused on the extent to which AHC has directed AmeriCorps Members to perform activities that
directly benefited ACORN. From the information obtained from the Hotline complainant, and other
2 See, 26 U.S.C. § 501(c)(3). Although NCSA only refers to "the restrictions contained in section 501(c) of Title
26," 42 U.S.C. § 12584(a)(5), the legislative history of the act specifically refers to the restrictions governing 501(c)(3)
nonprofit organizations, H.R. Conf. Rep. No. 219, 103d Cong, 1st Sess. 149 (1993).
Page 4
leads and information independently developed by OIG, we have obtained sworn statements or
documentary evidence of the following:
An "ACORN Housing Corporation - Loan Counselors Training Manual" made available to
AmeriCorps Members from various cities provides a detailed description of ACORN's goals
and activities, and encourages loan counselors to advocate membership in ACORN to loan
counseling clients. The manual contains detailed descriptions of how to conduct intake
sessions and informational seminars, including providing specific opportunities for people
interested in obtaining loan counseling to be recruited by ACORN representatives. A sample
handout included in the manual to be given to prospective loan counseling clients describes
the information and documentation needed at "an intake session," and states that clients
"must" bring a $60 check or money order for ACORN membership dues (see attached
copy).
An AHC supervisor in New Orleans threatened two AmeriCorps Members with "immediate
termination" if they failed to follow the "national loan counseling policy" of bringing loan
counseling clients to ACORN organizers to be solicited for membership in ACORN. Bruce
Dorpalen, AHC's AmeriCorps Program Director, was noted as receiving a copy of
memoranda concerning this matter.
A local ACORN official in Dallas stated that the only reason for having the AmeriCorps
program was to gain new ACORN members, and that if AmeriCorps loan counseling clients
did not start becoming ACORN members, she could and would halt the AmeriCorps project.
This ACORN official specifically directed AmeriCorps Members to solicit membership in
ACORN.
AHC officials in Dallas told AmeriCorps Members to give loan counseling clients who
became ACORN members priority scheduling and access to assistance (including some
financial assistance) over the clients that did not join ACORN.
An AHC loan counseling client in New Orleans (who is a retired high school business
teacher) was escorted by an AmeriCorps Member to an ACORN Organizer who solicited
membership in ACORN. The client felt like she was not going to be allowed to leave until
she gave the ACORN Organizer a $60 check, or authorized a $5 per month automatic bank
draft for ACORN membership dues. The client gave the Organizer a postdated check for
$60 and received an ACORN membership card. The client later asked for her check to be
returned. After telling her it could not be returned, and again soliciting membership in
ACORN, the Organizer returned the check.
AHC officials in Phoenix required an AmeriCorps Member, in addition to her loan
counseling duties, to conduct housing committee meetings of all area ACORN members.
She was also told to contact the area ACORN members about an anniversary picnic for
ACORN, which she refused to do.
Page 5
Although they were told only ACORN representatives should actually collect ACORN
membership dues, several AmeriCorps Members stated that, as part of their training, they
were told to describe to prospective loan counseling clients the accomplishments of ACORN
and the reasons why the prospective clients should join ACORN.
The evidence we have collected indicates that AHC has directed, condoned, and allowed the use of
some of its AmeriCorps Members as conduits for recruiting new ACORN members. Moreover, the
evidence indicates that this practice is not isolated. In New Orleans and Dallas, where AHC has
AmeriCorps loan counselors co-located with ACORN recruiters, the evidence shows that there was
specific pressure placed on AmeriCorps Members to assist in recruiting new ACORN members.
Further, AmeriCorps Members in Phoenix (where there are no ACORN recruiters) specifically
recalled being told in AHC training sessions that they should tell prospective clients about
ACORN's goals and activities.
To determine the impact of this practice has had on actual ACORN membership and fund raising,
we issued subpoenas to both AHC and ACORN on June 20, 1995. The subpoenas require AHC and
ACORN to produce documents which will allow us to identify the prospective AHC loan counseling
clients who were recruited and then joined ACORN, and other people who joined ACORN in part
because of the loan counseling available from AmeriCorps Members. The return date on the
subpoenas was July 7, 1995. AHC has told us that they will comply with the subpoena, but asked
for an extension of the return date. We received AHC's response to the subpoena on July 14, 1995,
and are reviewing those documents. ACORN, however, has asserted that the subpoena is beyond
our authority, and stated that it will only provide information already available to the public.
Conclusion
You requested that we complete our audit in time for CNS to consider the results while reviewing
AHC's request for renewal of its AmeriCorps grant. Regrettably, our work remains incomplete,
largely because of the impediments imposed by AHC and ACORN. Nonetheless, I believe that we
have sufficient evidence from our investigation to conclude that AHC has violated the NCSA, CNS
regulations, and grant agreement by using AmeriCorps positions to benefit ACORN. Because of
your specific request for timely information in this matter, I have decided to provide you with this
interim report of the results of our ongoing audit and investigation. Please advise me of whatever
additional assistance we can offer as we continue our work in these matters.
Yours truly,
Luise S. Jordan
Inspector General
Page 6
ACORN Housing
Corporation
Your next step in the Loan Counseling Program is an
intake session which is scheduled for:
Date:
Wednesday, April 13, 1994
Time:
7:00 P.M.
Place:
ACORN Housing Corporation
846 North Main Street
City
To get there by mass transit, take the Blue Line to Main Street, walk
south two blocks, or take the #30 bus and get off at Main and Park.
If you drive, there is a parking lot across the street.
BE SURE TO BRING PHOTOCOPIES of all of
the following documents which apply to you:
three current paystubs for all employment
past two years tax returns and W-2's
award letter or proof of other sources of income
(including public assistance, SSI, worker's compensation)
court order for child support/alimony you receive
last three months bank statements for all accounts
(checking and saving)
You must also bring:
$10 for your credit report
$60 ACORN membership dues
(check or money order)
If you cannot keep your appointment, or you have any
questions, please call 234-5678
Training Manual . Page 55
13:35 S6. 60 9ny
60d 628
SNO
Zach Polett
501-376-3952
01/18/95
7:19 AM
1/4
DATE:
Monday, August 7, 1995
MEMO
FAX
TO:
Jennifer O'Connor, The White House
FAX:
(202) 456-7929,99031
FROM: Zach Polett
PAGES: 4
Zach Polett
501-376-3952
108/7/95
07:20AM
2/4
ACORN
523 W 15th Street
Little Rock, Arkansas 72202
(501) 376-7151 phone (501) 376-3952 fax
MEMORANDUM
8/5/95
To:
Jennifer O'Connor
From:
Zach Polctt
RE:
Acorn Housing Corporation (AHC) and AmeriCorps
We believe that a grave injustice is being done to Acorn
Housing Corporation (AHC), its AmeriCorps project through
which AmeriCorps volunteers help low-income families become
homeowners, and the low-to-moderate income urban communities
of color that it primarily serves.
Here is the background and timeline information you
requested:
1) AHC's AmeriCorps project has been extremely successful
in producing benefits for the low-to-moderate income
community that it. serves. Some numbers:
* * AHC's AmeriCorps project has conducted 4932 intakes of
low-to-moderate income tamilies seeking private sector
financing for home purchases.
* * 757 of these families have already submitted
applications to financial institutions for home mortgages.
** Based on AHC's experience from the first 6 months of the
project that 90% of these mortgage applications will be
approved, 681 of these 757 applications will get loans
* * $34 million of private capital has been re-invested
into low-income communities, financing these home purchases,
as a direct result of the AHC AmeriCorps project.
2) On July 19 Corporation for National Service (CNS)
director Eli Seyal faxed a letter Lo AHC suspending its
AmeriCorps project offective July 21, bacod upon|a
preliminary report from CNS's inspector-general. (NOTE:
That report slated that the I-G did not find any evidence of
AmeriCorps Members participating in the March 6 demonstration
sponsored by ACORN.)
3) Neither AHC nor its attorneys were able to get a copy of
this preliminary report from the I-G until 6 days after the
suspension, 30 there was no way that AHC could respond.
Zach Polett
501-376-3952
18/7/95
07:20 AM
3/4
1) AHC has until Friday, August 11 to respond to the
suspension. Its attorneys are in the process of preparing
that response.
5) Timeline: It is my understanding that following the
receipt of this response CNS will schedule a hearing.
Because a suspension is for 30 days, CNS needs to hold this
hearing by 8/20. For AHC to prevail in this hearing, which
is conducted by a hearing officer selected by CNS, it would
have to meet the standard of proof that CNS's action was
"arbitrary and capricious" which is legally an extremely
difficult standard to meet.
6) Following this hearing CNS can, if it chooses, terminate
the grant for cause. AHC would undoubtedly challenge such
termination legally, but the negative ramitications would
still be great.
7) If CNS terminates the grant, the losses to AHC, the
clients, and the affected communities will be severe. For
example:
* * The clients who have already come to AIIC to get
loan counseling and home mortgages will have no counselor to
help them through the rest of the process until their loan is
ready to close. This is a critical time in the home mortgage
process, especially for lower-income borrowers.
* * The communities will lose the ability for more
tamilies to get. loan counseling and home loans and tor whata
would likely be another $34 million of private financing
invosted into those low-to-modcrato income urban communities.
* * AHC will lose the approximately 3450,000 - $500,000
of the $950,000 AmeriCorps grant that has not yct boon
expended.
* * AHC will face the danger of being barred from
seeking any additional federal grants or contracts from any
other federal agencies for the affordable housing, loan
counseling and non-profit housing development work that it
does around the country.
* *
If the grant is terminated for cause, AHC will then
have to explain this on every federal . and any local and
state -- grant applications it ever makes in the future.
AHC's counsel believes that this is likely to hurt. AHC in
securing any future grants. It would act as an albatross
around AHC's nock, knocking off a fcw points from scores on
grant. applications that. would likely be enough of a negative
factor Lo sink the applications.
8) From the beginnings of the right-wing attacks on AHC's
AmeriCorps project, CNS officials have shown a marked
Zach Polett
501-376-3952
18/7/95
07:20 AM
4/4
disinterest to communicate with AIIC. For example, both John
Walters, president of The New Citizenship Project and the
Washington Times have consistently gotten more, earlier and
better information from CNS than AIIC has. In a letter to the
Washington Times published on April 10 John Walters wrote
that the CNS board had ordered an investigation of AHC. AHC
had heard nothing about an investigation, 30 on April 11
AHC's executive director called CNS to ask if it was being
investigated. He left 3 messaqes for AHC's program officer
at CNS, but received no return call. He also called her
supervisor, but did not. get. a return call. He tinally
reached their grants officer al CNS who Lold him that he
didn't know anything about an investigation. Onc wook later,
this grants officer called back to say that the 1G was
conducting an investigation.
Similarly, the same day (July 19) that CNS notified AHC of
the suspension of its AmeriCorps project, Eli Segal sent a
letter about the suspension to Congress. AHC was not
informed about this immediate communication to Congress and
only found out about it the next day when a copy of the
letter was gloatingly faxed to AHC by New Citizenship Project
president John Walters.
9) AHC has had to hire outside counsel to represent it. in
this investigation, at the cost of tens of thousands of
dollars. The officials at CNS with whom AHC's counsel is now
communicating are general counsel Terry Russell and senior
program officer Simon Woodard.
10) Many months ago, AHC submitted its application to CNS
for FY95 second year funding for its AmeriCorps project. IL
has not yet received an answer as to CNS's approval or
rejection of that application.
CONCLUSION
Frankly, we think that the way that AHC and its AmeriCorps
project have boon treated by CNS has boon unfriendly and
unprotessional. AHC would like to be able to complete the
work of its first year AmeriCorps grant. In addition, AHC
continues to bc willing to mcct with CNS officials to
constructively discuss any problems and to resolve those
problems in a satisfactory manner.
If such a meeting is to occur, it needs to happen within the
next week or two and certainly not later than August 10,
given the timeline decribed above.
Thank you for your attention to this matter.
Conditional consent
Acorn Honsing
Law Offices
HOLLAND & KNIGHT
A Partnership Including Professional Corporations
2100 Pennsylvania Avenue, N.W.
Atlanta
Orlando
Suite 400
Fort Lauderdale
St. Petersburg
Washington, D.C. 20037-3202
Jacksonville
Tallahassee
202-955-3000
Lakeland
Tampa
FAX 202-955-5564
Miami
West Palm Beach
STEVEN D. GORDON
DIRECT DIAL
(202) 457-7038
August 18, 1995
VIA MESSENGER
Simon G. Woodard
Grants Officer
Corporation for National Service
1201 New York Avenue, N.W.
Washington, D.C. 20525
Re: ACORN Housing Corporation
Proposed Termination of Grant #94ADNIL001
Dear Mr. Woodard:
On behalf of this firm's client, ACORN Housing Corporation
("AHC"), we submit these materials to the Corporation for National
Service ("CNS" or the "Corporation") in opposition to the proposed
termination of the above-referenced grant.
I. Procedural Background
The basis for the proposed termination, as set forth in your
letter of July 18, 1995 to AHC's President, George Butts (the
"Termination Notice"), is that:
Based on information provided by the Corporation's Office
of the Inspector General, the Corporation has determined
that ACORN Housing Corporation directed AmeriCorps
members to engage in activities, and that pursuant to
those directions AmeriCorps members did engage in
activities that directly benefit the Association of
Community Organizations for Reform Now, (ACORN), a non-
profit organization whose activities substantially
involve the attempt to influence legislation and
political activity. Such activities are specifically
prohibited by the National and Community Service Act of
1990, as amended, the Corporation's regulations and the
Grant Provisions, and is a basis for this suspension and
intent to terminate action.
Simon G. Woodard
August 18, 1995
Page 2
The Termination Notice does not provide any specification of
the prohibited activities in which AHC allegedly engaged.
Subsequently, the Corporation has advised us that the information
provided by the Inspector General ("IG"), upon which it relies in
proposing the termination, is set forth in a letter of July 17,
1995 from Luise S. Jordan to Eli Segal (the "IG Report"). More
specifically, the Corporation has informed us that the proposed
termination is based on those portions of the IG Report regarding
the investigation of a so-called "Hotline" complaint, and not on
those portions of the Report relating to the Inspector General's
audit of AHC.
We note that the IG Report was not provided to us until the
evening of July 24, 1995, nearly a full week after the issuance of
the Termination Notice. The IG report lists seven items that it
contends "indicate[] that AHC has directed, condoned, and allowed
the use of some of its AmeriCorps Members as conduits for
recruiting new ACORN members." (IG Report at 5-6). The IG Report
asserts that these seven incidents are established by sworn
statements or documentary evidence. However, despite our repeated
requests, this supporting evidence was not furnished to us until
the evening of August 7, 1995, two full weeks after the provision
of the IG Report and less than one week before our response then
was due. This forced us to request an extension of time for the
submission of our response. Initially, you proposed to give us
only two additional business days, but ultimately you agreed to
extend the due date until August 18, 1995 (which was a mere eleven
days after the supporting evidence was furnished to us). AHC's
ability to respond to the Termination Notice has been hampered
significantly by the Corporation's repeated delays in providing AHC
adequate notice of the allegations and evidence against it.
II. Termination of AHC's Grant is Unwarranted
The termination of AHC's grant is unwarranted, both factually
and legally. As set forth below, the allegations made by the IG
Report are erroneous and misleading in key respects because they
are based upon an incomplete investigation and/or allegations that
are simply untrue. Upon a careful review of the facts, there is no
evidence that AHC directed its AmeriCorps Members to provide direct
benefits to ACORN or that the AmeriCorps Members did SO. Moreover,
as a matter of law, it does not constitute a material violation of
the grant even if AmeriCorps Members, at AHC's direction, did
provide a direct benefit to ACORN.
Law Offices
HOLLAND & KNIGHT
Simon G. Woodard
August 18, 1995
Page 3
A. The IG's Allegations are Inaccurate and Misleading in Key
Respects
It is very disturbing that the suspension and proposed
termination of AHC's grant are based upon the "preliminary results"
of an IG investigation that is admittedly incomplete. (IG Report
at 1). In many instances, the IG has relied upon statements
obtained from disgruntled former AHC employees whose motivations
and credibility are highly suspect. More fundamentally, the IG has
not sought or obtained input from AHC with respect to any of the
allegations that it makes. The IG did advise AHC that it had
launched an investigation of a Hotline complaint, and the IG served
a broad subpoena for documents upon AHC in connection with that
investigation. However, despite repeated requests by AHC counsel
that the IG put its specific concerns on the table so that AHC
could address them, the IG refused to do SO. The result has been
a one-sided and half-cocked assault upon AHC.
The allegations made in the IG Report portray the AHC
AmeriCorps loan counseling program as nothing more than a
recruiting vehicle for ACORN, with (i) AmeriCorps Members being
required to help recruit ACORN members upon pain of termination;
(ii) loan counseling clients being virtually compelled to join
ACORN; and (iii) ACORN members being given priority for loan
counseling assistance over non-members. In fact, none of these
implications is true.
Unquestionably, there are certain links between AHC and ACORN.
AHC was established in 1985 by ACORN as a vehicle for assisting
poor people's groups throughout the United States to develop home
ownership and community reinvestment programs. AHC and ACORN have
worked together to support AHC's various home ownership programs
for many years. Likewise, AHC and ACORN historically have
cooperated on certain outreach or recruitment efforts. For
example, AHC and ACORN have jointly sponsored community "bank
fairs." Similarly, AHC and ACORN have cooperated in setting up,
advertising, and conducting "intake sessions" at which members of
both organizations speak.
Certain of these cooperative practices, which have been very
beneficial to AHC, have continued in some (but not all) AmeriCorps
program cities since the inception of the grant. However, AHC has
repeatedly instructed AmeriCorps Members that (i) AHC and ACORN are
distinct organizations; (ii) participation in the AHC loan
counseling program is not in any way tied to or conditional upon
membership in ACORN; and (iii) AmeriCorps Members are not to engage
in any actual recruitment of members for ACORN -- soliciting or
accepting dues, etc. See Declaration of Marilyn Ashley,
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Page 4
Attachment 1; Declaration of Bruce Dorpalen, Attachment 2;
Statement of Robert X. Mendez (acknowledging that Ms. Ashley told
AmeriCorps members during training that they should not ask clients
to join ACORN) ; Statement of Myrtle L. Cleveland (Ms. Ashley told
her that "it was not [her] place to ask for ACORN membership
because [she] had nothing to do with ACORN").
The allegations in the IG Report, however, severely distort
the actual relationship between AHC and ACORN. We shall address
each of those allegations below.
Allegation #1:
An "ACORN Housing Corporation - Loan Counselors Training
Manual" made available to AmeriCorps Members from various
cities provides a detailed description of ACORN'S goals
and activities, and encourages loan counselors to
advocate membership in ACORN to loan counseling clients.
The manual contains detailed descriptions of how to
conduct intake sessions and informational seminars,
including providing specific opportunities for people
interested in obtaining loan counseling to be recruited
by ACORN representatives. A sample handout included in
the manual to be given to prospective loan counseling
clients describes the information and documentation
needed at "an intake session," and states that clients
"must" bring a $60 check or money order for ACORN
membership dues.
The training manual identified in the IG Report was produced
before the advent of the AmeriCorps program and was not revised
specifically for use in connection with the AmeriCorps program.
However, AmeriCorps Members are trained by AHC that membership in
ACORN is not a prerequisite to loan counseling services and that
they should not recruit or accept dues for ACORN. AHC instructs
the AmeriCorps Members that the reference to ACORN dues on the form
cited by the IG Report does not apply to them. Furthermore, each
AmeriCorps trainee prepares a folder of forms that he/she will use
in his/her local office. The group intake form cited by the IG
Report is not part of this folder. See Declaration of Marilyn
Ashley, Attachment 1. Indeed, the statements obtained by OIG
demonstrate that AmeriCorps members refused to use the form in
issue or else changed it to delete the reference to ACORN
membership dues. See Statement of Monica Y. Craig (she never used
this form because she knew she was not supposed to solicit ACORN
membership; her supervisor in the Phoenix office, Sabrina Garcia,
changed the form to delete the portion about the $60 membership in
ACORN) ; Statement of Annie R. Carter (AmeriCorps members in Phoenix
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Page 5
did not use the form because they questioned it); Statement of
Unnamed Individual in New Orleans office (form was changed to
delete $60 requirement).
Allegation #2:
An AHC supervisor in New Orleans threatened two
AmeriCorps Members with "immediate termination" if they
failed to follow the "national loan counseling policy" of
bringing loan counseling clients to ACORN organizers to
be solicited for membership in ACORN. Bruce Dorpalen,
AHC's AmeriCorps Program Director, was noted as receiving
a copy of memoranda concerning this matter.
This incident began on March 30, 1995, when an ACORN staffer
in New Orleans wrote a memo to Pat Simon, the AmeriCorps supervisor
in the AHC office there, complaining that two AmeriCorps Members
were not referring their loan counseling clients to ACORN Fair
Housing outreach coordinators. The memo contended that this was "a
violation of national loan counseling policy." In response, Ms.
Simon wrote a memo to the two AmeriCorps Members the following day
which stated, in part:
In the future, I expect you to fully cooperate and work
closely with our outreach coordinators at all our events.
These events include all in-house intakes, all outreach
intakes, and all one-on-one interviews.
Future violation of this ACORN national loan counseling
policy or any other violation will call for your
immediate termination from ACORN Loan Counseling/New
Orleans.
Ms. Simon sent a copy of this memo to Mr. Dorpalen. Significantly,
however, she did not contact Mr. Dorpalen, who was her supervisor,
before writing this memo.
The two AmeriCorps Members were upset by Ms. Simon's memo and
prepared a written response to it, which they sent to Ms. Simon and
to Mr. Dorpalen. Upon receiving these memos, Mr. Dorpalen
contacted Ms. Simon to inquire about the matter. He informed her
that no such "national loan counseling policy" existed. Mr.
Dorpalen emphasized that AHC's activities were separate from ACORN,
and that AHC would not terminate an AmeriCorps Member for failure
to refer clients to ACORN. Ms. Simon promptly held a conference
with the two AmeriCorps members to straighten the matter out. It
was agreed that her March 31 memo would be withdrawn. See the
declarations of Patricia Simon, Bruce Dorpalen, Antoinette Davis
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Page 6
and Dorethea C. Allmon, Attachments 2, 3, 4, and 5. Thus, the
March 31 memo was a mistake that was promptly corrected by AHC.
It is worth noting that the ACORN staffer's initial complaint,
which triggered this incident, effectively demonstrates the absence
of any "national loan counseling policy" of bringing loan
counseling clients to ACORN organizers so that they could be
solicited for ACORN membership. Had there been any such policy,
all AmeriCorps members presumably would have been indoctrinated
about it during their initial training period in Philadelphia.
Accordingly, the very fact that the incident arose in the first
place is telling evidence that there never was any such policy as
part of the AmeriCorps loan counseling program.
Allegation #3:
A local ACORN official in Dallas stated that the only
reason for having the AmeriCorps program was to gain new
ACORN members, and that if AmeriCorps loan counseling
clients did not start becoming ACORN members, she could
and would halt the AmeriCorps project. This ACORN
official specifically directed AmeriCorps Members to
solicit membership in ACORN.
This allegation evidently derives from a statement made by
Myrtle Cleveland, an AmeriCorps member in Dallas who was terminated
because she was caught engaging in partisan political activities
during work hours. See Declaration of Bruce Dorpalen,
Attachment 2. Ms. Cleveland's actual allegation was as follows:
Q: How do you know that ACORN dues were being
collected by AmeriCorps members?
A: I never actually saw it happen. But one day we had
a meeting held by Liz WOLFE [the ACORN official].
The meeting was for AmeriCorps members, ACORN
Housing people and ACORN people. Liz WOLFE said
she didn't care if they closed up AmeriCorps, if
they closed it down. She said she was interested
in membership only and that she had been there long
enough to do something about it. We also had a
meeting every now and then, the morning following
an intake session, where Pamela WICK and Gwen JONES
would be angry because their intake sessions were
taken over by ACORN organizers. This was why Liz
WOLFE called her meeting I just told you about; she
wanted to tell us why her ACORN folks were there.
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Page 7
They were there at the client intake sessions, Liz
WOLFE said, to get the clients to join ACORN.
(Statement of Myrtle L. Cleveland at 3). Even taken at face value,
Ms. Wolfe's alleged statement is hardly a threat to halt the
AmeriCorps project if loan counseling clients did not start joining
ACORN. Rather, it appears to be a candid acknowledgment that
ACORN's goal when it participated in joint intake sessions with AHC
was to secure new members. This is not startling.
Furthermore, Ms. Cleveland recounts a telephone conversation
that she had while Marilyn Ashley, the AHC official in charge of
training for the AmeriCorps program.
I called Marilyn ASHLEY, the person who was my instructor
in Philadelphia, and told her about what we were required
to charge clients for credit checks. I told her I guess
we should ask clients for $110.00; $50.00 for the credit
check and $60.00 for the ACORN membership. She told me
that it was not my place to have to ask for ACORN
membership because I had nothing to do with ACORN. She
said she wanted to speak to Liz WOLFE, the head ACORN
organizer.
(Statement of Myrtle L. Cleveland at 1). In fact, Ms. Ashley spoke
to Ms. Wolfe to ensure that she understood that AmeriCorps Members
cannot solicit for ACORN. Ms. Ashley asked Ms. Wolfe to ensure
that the other ACORN organizers in Dallas understood this. See
Declaration of Marilyn Ashley, Attachment 1.
In sum, the alleged statements in issue here were made by an
ACORN "official," not an AHC official. Those statements were not
condoned or adopted by AHC. To the contrary, AHC made clear to the
AmeriCorps Members and to the ACORN official that AmeriCorps
Members were not to participate in the recruitment of members for
ACORN. See also Declaration of Gwendolyn S. Jones, Attachment 6.
Allegation #4:
AHC officials in Dallas told AmeriCorps Members to give
loan counseling clients who became ACORN members priority
scheduling and access to assistance (including some
financial assistance) over the clients that did not join
ACORN.
The particulars underlying this allegation were supplied by
Tavius Jones, the former director of the AHC Dallas office, who was
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Page 8
removed from that post by Mr. Dorpalen. She made the following
claim:
Q: Were you ever told to tell loan counseling clients
that membership in ACORN was required in order for
them to receive loan counseling?
A: Yes. Liz WOLFE told us that if we had any clients
that did not want to join, we were to put them on
the "back burner" and to show a difference in the
way we scheduled them versus the way we scheduled
the clients who joined ACORN. The clients who did
not join ACORN were to be scheduled later. Also,
Nations Bank gave us a grant that could be used to
pay client closing costs. I was supposed to be
making the decision as to which clients were to
receive this grant, but WOLFE and DORPALEN made the
decision. They would wait until all the clients
who paid to join ACORN received their grants before
giving anything that was left to the clients that
refused to join ACORN.
(Statement of Tavius T. Jones at 4).
It appears that Ms. Wolfe may have made a remark to the AHC
staff suggesting that preference be given to ACORN members.
However, the AHC loan counselors who evidently heard this remark
were upset by it, both because they knew it is impermissible to
give any preference to ACORN members and because Ms. Wolfe, as an
ACORN staffer, had no business telling AHC staff what to do.
Significantly, no AHC loan counselor in Dallas ever gave any
preference to ACORN members. See Declaration of Gwendolyn S.
Jones, Attachment 6.
The further allegation that Bruce Dorpalen and Ms. Wolfe
allocated benefits under a NationsBank grant so as to favor ACORN
members is absolutely false. The grant funds were allocated in
1994, prior to the inception of the AmeriCorps program in Dallas.
Thus, Tavius Jones never was to have had a role in allocating those
funds. Moreover, the funds were allocated by AHC staff in Dallas
(not by Mr. Dorpalen) on essentially a first come-first served
basis, with no preference given to ACORN members. See Declaration
of Bruce Dorpalen, Attachment 2.
It is not and has never been the policy of the AHC AmeriCorps
program to provide preferential treatment to ACORN members or those
becoming ACORN members.
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Page 9
Allegation #5:
An AHC loan counseling client in New Orleans (who is a
retired high school business teacher) was escorted by an
AmeriCorps Member to an ACORN Organizer who solicited
membership in ACORN. The client felt like she was not
going to be allowed to leave until she gave the ACORN
Organizer a $60 check, or authorized a $5 per month
automatic bank draft for ACORN membership dues. The
client gave the Organizer a postdated check for $60 and
received an ACORN membership card. The client later
asked for her check to be returned. After telling her it
could not be returned, and again soliciting membership in
ACORN, the Organizer returned the check.
The redacted statement of this unidentified client states that
the AmeriCorps loan counselor was "very proficient and
professional." Upon the conclusion of the counselling session,
She [the AmeriCorps member] told me [the client] that
after we finished our session she would take me up front
to speak with someone about ACORN. But she said nothing
to me about joining. She didn't state it, but I felt
that this was the next step. She did not imply that I
had to join ACORN.
The client relates that the ACORN organizer aggressively solicited
her membership in ACORN and that she ultimately gave him a check
"against [her] better judgment." However, she acknowledges that
the ACORN organizer did not tell her that she was required to join
ACORN if she wished to participate in the loan counseling program.
Moreover, she does not allege that the AmeriCorps member was
present during the solicitation or in any way privy to it.
Another New Orleans loan counseling client had no complaints
about her solicitation by an ACORN representative. She told OIG
that, at the end of her counselling session, the AmeriCorps member
explained to me that I didn't have to join [ACORN]. She
took me to the man from ACORN. The interview was on May
2, 1995. The man from ACORN told me about the
organization, that it was non-profit, and that I could
have $5.00 each month automatically deducted from my
checking account to pay the dues. I signed the form
allowing them to do this.
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Page 10
(Statement of Linda York at 1). She further stated that no one
ever told her that she had to join ACORN in order to receive loan
counseling.
There is no dispute that AHC loan counseling clients in New
Orleans were referred to ACORN representatives for possible
solicitation to join ACORN. As discussed above, historically there
have been cooperative recruiting efforts by AHC and ACORN that have
been mutually beneficial. Mable Pierre, who evidently was the
AmeriCorps Member involved in both of the above-described
incidents, told OIG that
I was instructed by Pat Simon to bring all my AHC clients
who were not referred by the ACORN organizers through the
ACORN office so that the organizers could talk with them
about ACORN--the purpose was to get the individual to
join ACORN.
Significantly, what Ms. Pierre describes is a cross-referral
practice whereby each organization referred its clients/members to
the other. As a result of this reciprocal practice, AHC's ability
to recruit additional clients was enhanced.
Allegation #6:
AHC officials in Phoenix required an AmeriCorps Member,
in addition to her loan counseling duties, to conduct
housing committee meetings of all area ACORN members.
She was also told to contact the area ACORN members about
an anniversary picnic for ACORN, which she refused to do.
This allegation was made by Monica Craig, a former AmeriCorps
Member in Phoenix. The fundamental error in this allegation
appears to stem from Ms. Craig's mistaken conception that an AHC
housing development program in Phoenix, which is distinct from its
loan counseling program, somehow equates to ACORN.
The housing development program involves AHC purchasing and
rehabilitating houses that are then made available to tenant-
homebuyers through a "lease to own" homeownership program. This
program is specifically designed to assist low-income persons who
would be unable to obtain a loan from a mortgage lender due to
minor credit problems or lack of a downpayment. AHC monitors the
tenants' payment performance during the lease period.
The goal of the "development" program is the same as the loan
counseling program -- to assist low-income persons to become
homeowners. Many of the services AHC provides to clients in the
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development program are similar or identical to those provided in
the loan counseling program. Development program services include
providing financial evaluations and counseling to persons on the
waiting list for housing; review of applicants' files for
completeness of financial information; conducting intake meetings
to explain the program to persons in the community; and conducting
training classes in budgeting and home maintenance. As with the
AHC loan counseling program, the development program is open to all
low income persons; there is no requirement that clients be members
of ACORN. (Formerly, there was such a requirement, but it was
dropped several years ago when the development program began to
receive federal funding through a HUD grant).
Under AHC's AmeriCorps grant, the conduct of work for the
development program is equally permissible as the loan counseling
work. Thus, Monica Craig was asked to perform work in support of
both the development program and the loan counseling program. She
raised a concern with her supervisor, Sabrina Garcia, that this
dual role was a violation of AmeriCorps requirements. Ms. Garcia,
in turn, raised this issue with Bruce Dorpalen, who confirmed that
it was permissible for an AmeriCorps member to perform work in
support of the AHC development program. See Declaration of Sabrina
Garcia, Attachment 7; Declaration of Bruce Dorpalen, Attachment 2.
Contrary to Ms. Craig's allegation, the housing meetings that
she helped to conduct were meetings for persons on the waiting list
or in developed AHC houses; they were not meetings of ACORN
members. The purpose of the monthly housing meeting is to announce
the upcoming calendar of events, any new houses that would be
becoming available, and to provide a participation status report.
See Declaration of Martin Shalloo, Attachment 8.
It is the practice of the AHC Phoenix Office to hold a
"potluck" dinner on a monthly basis that is open to all
participants in the development program and the loan counseling
program. This practice began long before the advent of the
AmeriCorps project. The dinners are sponsored by AHC, not ACORN.
AmeriCorps Members are not required to attend these dinners.
Sometimes, the potluck dinners are designated with a "theme." The
potluck dinner held on June 25, 1995, was denoted a "25th
Anniversary Potluck" in honor of the twenty-fifth anniversary of
ACORN, but was an event held and attended by AHC staff and program
participants. See Declaration of Sabrina Garcia, Attachment 7;
Declaration of Martin Shalloo, Attachment 8.
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Allegation #7:
Although they were told only ACORN representatives should
actually collect ACORN membership dues, several
AmeriCorps Members stated that, as part of their
training, they were told to describe to prospective loan
counseling clients the accomplishments of ACORN and the
reasons why the prospective clients should join ACORN.
In assessing this allegation, it is useful to understand
exactly what the former AmeriCorps members related to OIG. For
example, Annie Carter, a former AmeriCorps members in the Phoenix
office, stated:
Q: Did anyone ever direct you to ask loan counseling
clients to join ACORN?
A: During training we were told we should tell them
about ACORN and tell them why it was important to
be an ACORN member, and how, without ACORN, there
wouldn't have been ACORN Housing.
Q: What were you told to tell members regarding why it
was important to be an ACORN member?
A: Because being an ACORN member they could go out and
enforce the prohibition against red lining and how
ACORN helped the lending process and made sure
people were not being discriminated against when it
came to insurance and mortgages, and how ACORN went
out and overturned different issues.
(Statement of Annie R. Carter at 2).
Similarly, Monica Craig, another former AmeriCorps member in
the Phoenix office, stated:
Q: Have you ever been directed to solicit membership
in ACORN?
A: In training we were told to tell our clients about
the ACORN organization, but we were told that we
cannot force them to become members; just make them
aware of ACORN. This was told to us by Sylvanna,
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Page 13
the head ACORN organizer in Philadelphia. I have
never solicited membership.
(Statement of Monica Y. Craig at 2-3).
AHC acknowledges that, during training, AmeriCorps members are
taught about ACORN's role in founding AHC, and how ACORN and AHC
work together to support AHC's various home ownership programs.
They also are taught about some of ACORN's other activities,
particularly its efforts to combat illegal discrimination in
mortgage lending and insurance. In some cases, AmeriCorps members
may have been encouraged to make clients aware of ACORN. However,
AHC consistently emphasizes that AmeriCorps Members are not to
solicit members for ACORN or to encourage them to join ACORN.
After carefully reviewing the allegations made in the IG
Report, it becomes clear that the picture of AHC's activities
painted by the IG Report is inaccurate and misleading. AHC and
ACORN have historical links and ongoing shared goals in terms of
promoting home ownership by low income individuals and families.
They cooperate, in some cities, in certain community outreach and
recruitment activities because it is mutually beneficial. However,
AHC is well aware that it is a separate organization from ACORN.
AHC has trained its AmeriCorps Members that they are separate from
ACORN; that they must not recruit for ACORN; and that the provision
of loan counseling services is not in any way tied to membership in
ACORN.
Moreover, the IG Report fails (indeed, it does not even
attempt) to analyze the activities that it criticizes in the
context of AHC's performance under the grant. Since the inception
of its AmeriCorps loan counseling program, AHC AmeriCorps
counselors in nine cities have spoken with approximately 4,942
prospective clients participating in "intake" sessions. of that
number, it is estimated that approximately 757 persons have been
"prequalified" and referred to mortgage lenders for loans. An
estimated 681 out of the 757 qualified individuals have actually
received mortgage loans, totalling approximately $34 million. The
cities in which AmeriCorps Members "prequalified" the most
counseling clients are Philadelphia (219), Chicago (111), Houston
(190) and Denver (74). The Washington, D.C. Office has
prequalified 42 persons; Dallas, 40; New Orleans, 15; Phoenix, 10;
and New York City, 56. To a certain extent, the variation in
numbers reflects the various dates on which the AmeriCorps program
operations commenced in the various Offices. Also reflected,
however, is the varying volume of intake done in each office.
Philadelphia, for example, has screened an estimated 1, 605 persons,
of which 219 were ultimately referred to lenders.
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These numbers demonstrate that the AHC AmeriCorps program has
succeeded in providing the services called for under the Grant. In
addition, it is noteworthy that the activities criticized in the IG
Report essentially are predicated upon the allegations of
disaffected, former AmeriCorps Members from only three cities
(Dallas, Phoenix and New Orleans), and that those are the three
cities in which the AmeriCorps operations have been the least
productive so far. This suggests that the allegations reflect
local factors rather than nationwide, programmatic issues.
It also is significant that the AHC AmeriCorps program is
still in its infancy. Most of the AmeriCorps Members been trained
and started work within the last six months, and most of the
AmeriCorps programs have commenced operations during that time
span. (The New Orleans program started in late January 1995. The
programs in Dallas, Washington, Phoenix and Brooklyn started in
February or March). As with any new program, it is only reasonable
to expect that there will be an initial "shakedown" period for the
AHC AmeriCorps program, during which mistakes will be made and
corrected.
A proper sense of perspective is essential so that "shakedown"
period activities are not mistaken for something far more serious.
AHC does not contend that no mistakes have been made, or than no
glitches have occurred, as its AmeriCorps loan counseling program
has gotten underway. (For example, there were problems in the
Dallas office for the initial two months of the AmeriCorps program
operation there, until Tavius Jones was replaced as the director.
See Declaration of Gwendolyn S. Jones, Attachment 6). AHC, like
any organization, is composed of fallible humans. AHC adamantly
denies, however, that it has attempted to flout or circumvent Grant
requirements.
B. AHC's Activities Are Not a Material Violation of Its
Grant
The Corporation can suspend or terminate payments under a
grant only if there is a material failure to comply with any
applicable statutory or grant condition. 42 U.S.C. § 12636 (a) (1).
A grant recipient is entitled to a full and fair hearing, on the
record, before a decision is made to terminate a grant. 42 U.S.C.
§ 12636 (a) (2) (B) and (d). This hearing is governed by the
requirements of the Administrative Procedure Act, 5 U.S.C. §§ 554-
557. The burden of proof will be on the Corporation to establish
the existence of a material violation by the preponderance of the
evidence. Steadman V. SEC, 450 U.S. 91 (1981) ; Director, OWCP V.
Greenwich Collieries,
U.S.
,
114 s.ct. 2251 (1994).
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1. AHC did not provide a direct benefit to ACORN
As discussed above, AHC neither requires nor permits its
AmeriCorps members to recruit for ACORN. Nor does AHC give any
preference to ACORN members in the provision of loan counseling
services under the AmeriCorps grant. AHC has cooperated with ACORN
in certain outreach or recruitment activities that are mutually
beneficial. And, in some cases, AmeriCorps Members have made loan
counseling clients aware of ACORN. AHC submits that none of these
actions constitute the provision of a "direct benefit" to ACORN.
They may benefit ACORN, but only indirectly.
What constitutes a "direct benefit" is nowhere defined in the
National and Community Service Act of 1990, as amended ("NCSA"), in
the Corporation's regulations, or in the grant itself. The term
potentially is quite elastic in meaning, depending on how "direct"
and "benefit" are construed. However, the most reasonable
construction of "direct" in this context would appear to be "with
nothing intervening : immediate." Likewise, the most reasonable
construction of "benefit" would seem to be "an advantage."
WEBSTER'S II NEW RIVERSIDE DICTIONARY (1984). AHC's actions do not
directly produce new members for ACORN. ACORN garners new members
only because of the intervening activities of its own recruiters.
Moreover, AHC does not bestow any advantage (direct or indirect)
unilaterally upon ACORN. To the contrary, AHC's actions are
undertaken pursuant to cooperative, reciprocal arrangements with
ACORN that are mutually beneficial.
Similarly, AHC's loan counseling activities clearly "benefit"
the private mortgage lenders who gain customers from AHC's
clientele. AHC educates its clients about those lenders and their
requirements, and steers its clients to certain cooperating
lenders. But these actions, assuredly, are not deemed a forbidden
direct benefit. The reason why is either because further action
between the client and the lender is necessary to consummate the
loan, or else because the relationship between AHC and the lender
is deemed a two-way, commercial relationship whereby both parties
benefit, rather than a unilateral bestowing of benefits. Both of
these rationales are equally applicable to AHC's relationship with
ACORN.
Moreover, the ties between AHC and ACORN are no secret to the
Corporation. The Corporation was aware from the outset that AHC
and ACORN have worked together to support AHC's various home
ownership programs for many years prior to AHC's application for an
award under the AmeriCorps program. The Corporation also was
advised that ACORN was expected to play a role in connection with
the AHC AmeriCorps program.
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The AmeriCorps grant proposal submitted by AHC dated April 25,
1994 makes numerous references to ACORN. In the Application
Summary section, page 3, AHC states that it was "established in
1985 by the Association of Community Organizations for Reform Now
as a vehicle for assisting poor people's groups throughout the
United States to develop home ownership and community reinvestment
programs." On page 20 of the Program Narrative section of the
proposal, AHC indicates that it intends to rely upon the ACORN
national newsmagazine as one means of "high quality outreach" in
its recruitment of AmeriCorps participants. The section of the
grant proposal entitled "Institutional and Personnel Information"
describes the programs of service and technical assistance already
being offered by AHC. One of the programs described involves the
acquisition, rehabilitation and resale of single-family homes to
very low-income persons. The grant proposal recites, on page 27,
that AHC has carried out this program, involving the resale of over
400 properties, "[w]orking closely with the Association of
Community Organizations for Reform Now network of neighborhood
associations.
In addition, a meeting was held in June, 1994 between
representatives of the Corporation (including the Corporation's
general counsel) and officials of AHC. The purpose of this
meeting, held at the Corporation's offices in Washington, D.C., was
to "interview" AHC as a "finalist" in the application process. At
this meeting, AHC representatives described the ways in which AHC
has worked with ACORN since it was spun off as a separate
corporation in 1985. They talked about how AHC encourages its
clients to become involved in civic affairs by becoming active in
community groups such as ACORN. They also said that AHC works with
ACORN and other groups on community outreach, and that ACORN is a
very valuable source of client referrals to AHC. The AHC
representatives specifically asked whether AHC's relationship to
ACORN presented a problem. In response, the Corporation reviewed
the AmeriCorps program prohibitions against demonstrating,
protesting, and lobbying. The Corporation asked whether or not AHC
worked with ACORN on those sorts of activities. The AHC
representatives assured the Corporation that AHC would ensure that
AmeriCorps members did not participate in those activities.
However, at no time during this exchange did any of the
Corporation's representatives indicate that AHC would be required
to sever its relationship with ACORN. See Declaration of Michael
Shea, Attachment 9.
The position taken by the Corporation during this June 1994
meeting was consistent with the position it announced in a set of
written "Questions and Answers" published on April 18, 1994, which
was provided to AHC. In that publication, the Corporation stated
Law Offices
HOLLAND & KNIGHT
Simon G. Woodard
August 18, 1995
Page 17
that a nonprofit lobbying organization could be an AmeriCorps
service and/or program sponsor so long as AmeriCorps participants
did not engage in any effort to influence legislation.
(Attachment 10).
Traditional concepts of due process incorporated into
administrative law preclude an agency from penalizing a private
party for violating a rule without first providing adequate notice
of the substance of the rule. Satellite Broadcasting Co. V. FCC,
824 F.2d 1, 3 (D.C. Cir. 1987). In this case, it assuredly was not
made clear to AHC that the "direct benefit" prohibition would
preclude it from engaging in any mutual outreach or recruitment
efforts with ACORN, and even from making its clients aware of
ACORN. If the Corporation chooses to adopt and promulgate this
definition of "direct benefit" prospectively, then it is free to do
so and AHC will be on notice of that definition. However, a
prohibition "cannot be construed to mean what an agency intended
but did not adequately express." Gates & Fox Co. V. OSHRC, 790
F.2d 154, 156 (D.C. Cir. 1986), quoting Diamond Roofing Co. V.
OSHRC, 528 F.2d 645, 649 (5th Cir. 1976).
2. It is not a violation of AHC's grant even if it did
provide direct benefits to ACORN
Even if AHC did provide a direct benefit to ACORN, it did not
thereby violate its grant conditions. The Corporation alleges that
AHC was prohibited from providing a direct benefit to ACORN because
ACORN's activities "substantially involve the attempt to influence
legislation and political activity." However, this contention is
at odds with the relevant statutory, regulatory and grant
provisions.
NCSA prohibits the use of grant funds or AmeriCorps positions
to perform service that provides a direct benefit to any
nonprofit organization that fails to comply with the
restrictions contained in section 501 (c) of Title 26,
except that nothing in this section shall be construed to
prevent participants from engaging in advocacy activities
undertaken at their own initiative.
42 U.S.C. § 12584 (a) (5). The Corporations's regulations reiterate
this prohibition, 45 CFR § 2520.30 (g) (4), and so do the Grant
Provisions, § 5.g.
26 U.S.C. § 501 (c), in turn, lists 25 separate categories of
tax-exempt organizations. The prohibition against attempting to
influence legislation or participating in political campaigns
Law Offices
HOLLAND & KNIGHT
Simon G. Woodard
August 18, 1995
Page 18
applies only to one of those categories -- religious, charitable,
scientific, educational and similar organizations covered by §
501 (c) (3). No such limitation applies to the remaining 24
categories, including § 501 (c) (4), which covers civic leagues and
social welfare organizations. Such well-known organizations as the
National Organization of Women (NOW), American Association of
Retired Persons (AARP), National Rifle Association (NRA), Sierra
Club, Planned Parenthood, and National Association for the
Advancement of Colored People (NAACP) all are (c) (4) organizations.
The IG Report attempts to rewrite the statutory prohibition so
that it would preclude the provision of direct benefits to any
nonprofit organization that fails to comply with the restrictions
of § 501 (c) (3). (IG Report at 4 & n.2). In so doing, the IG cites
the legislative history of NCSA, in particular, a portion of the
House Conference report which states:
The Senate bill, but not the House bill, prohibits
programs to be operated by entities that spend more than
20 percent of their budgets, or aim primarily, to
influence public policy or lobby the government. The
Senate bill also states that these provisions are not
designed to discourage individuals from engaging in
advocacy undertaken at their own initiative. The House
recedes, with an amendment conforming prohibitions to the
tax code governing 501 (c) (3) nonprofit organizations.
H.R. Conf. Rep. No. 219, 103d Cong., 1st Sess. 149 (1993).
However, notwithstanding this report, the actual text of the
statute is not limited to 501 (c) (3) and the IG's attempt to rewrite
the statutory text must be rejected. One "do[es] not resort to
legislative history to cloud a statutory text that is clear."
Ratzlaff V. United States, U.S. , 114 s.ct. 655, 662 (1994).
If a conflict exists between a statute and its legislative history,
the statute prevails. Matter of Sinclair, 870 F.2d 1340 (7th Cir.
1989). "The mere fact that statutory provisions conflict with
language in the legislative history is not an exceptional
circumstance permitting a court to apply the legislative history
rather than the statute." United States V. South Half of Lot 7 and
Lot 8, 910 F.2d 488, 489 (8th Cir. 1990) (en banc). Thus, the
statute must be construed as it was written -- encompassing all 25
categories listed in § 501 (c) -- and not confined solely to
category (c) (3) as the IG contends.
Moreover, in implementing NCSA, the Corporation itself has
promulgated a regulation that follows the statutory text and
prohibits direct benefits to "[a] nonprofit organization that fails
Law Offices
HOLLAND & KNIGHT
Simon G. Woodard
August 18, 1995
Page 19
to comply with the restrictions contained in section 501 (c) of the
Internal Revenue Code " 45 CFR § 2520.30 (g) (4). Likewise, the
Grant Provision (§ 5.g) prohibiting direct benefits refers only to
nonprofit organizations that fail to comply with § 501 (c). In
contrast, the Grant Provision (§ 5.a) prohibiting any effort by the
grantee to influence legislation does expressly refer to §
501 (c) (3), thus demonstrating that the Corporation knows how to
specify that one category when it chooses to do so.
That is not all. As noted above, the Corporation published a
set of "Questions and Answers" on April 18, 1994, to "clarify and
discuss frequently asked questions and address issues raised during
the course of technical assistance workshops and conference calls
held over the past few months." One of the questions addressed
therein was: "May a nonprofit lobbying organization be an
AmeriCorps service and program sponsor?" The Corporation provided
the following answer:
A nonprofit lobbying organization is eligible to be an
AmeriCorps service and/or program sponsor.
...
Under no
circumstances, however, may a participant in the course
of his/her duties, at the request of program staff, or in
any manner that would associate the activities with the
Corporation or the national service program engage in any
effort to influence legislation, as prohibited under §
501 (c) of the Internal Revenue Code of 1986 (26 U.S.C.
501 (c) ) or provide a direct benefit to any nonprofit
that fails to comply with the restrictions contained in
§ 501 (c) of the IRS Code.
(Attachment 10). Thus, the Corporation consistently has advised
grantees that direct benefits may be provided to nonprofit
organizations that qualify under any of the § 501 (c) categories.
Therefore, unless the Corporation can establish that ACORN
fails to comply with the restrictions applicable to any and all of
the 25 categories of nonprofit organizations covered by § 501 (c) --
a task that it has not even attempted to undertake, and at which it
cannot succeed -- then it cannot establish that AHC has violated
its grant conditions even assuming arguendo that AHC provided a
direct benefit to ACORN.
Accordingly, for all of the reasons set forth above and for
such additional reasons as may be adduced at the hearing that AHC
has requested on this matter, we respectfully submit that there is
no basis to terminate AHC's grant. AHC requests that the grant be
reinstated promptly.
Law Offices
HOLLAND & KNIGHT
Simon G. Woodard
August 18, 1995
Page 20
Sincerely,
Steven D. Gordon
SDG:jmw
Attachments
44935-1
WAS-118114
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1
Declaration of Marilyn Ashley
I, Marilyn Ashley, do hereby declare as follows:
I am the Director of Training for the loan counseling program of ACORN Housing
Corporation. I live at, 220 South Ithan Street, Phila., Pa. 19139.
I am in charge of training for the AHC loan counseling program including the
training of all AmeriCorps members. During the training, all AmeriCorps members are
clearly instructed that they cannot solicit members for ACORN and are not to collect dues
for ACORN. I realize that there is a form in the AHC loan counseling training manual that
instructs clients to bring with them $60 for ACORN dues when they come to a loan
counseling intake session. The training manual was produced before the advent of the
AmeriCorps program and was not revised specifically for use in connection with the
AmeriCorps program. However, AmeriCorps members are instructed that this part of the
form does not apply to them. Furthermore, each trainee made up a folder of forms which
they would use in their local office. This folder had in it:
1. the three page loan counseling intake form
2. the client file checklist
3. the mortgage application checklist
4. the certifications sheet for clients to sign
5. the activity log sheet
6. the next appoint list
7. the loan counseling referral form
8. the group intake check list
9. the monthly income and expense record
A copy of the forms is attached. The group intake check list referred to in the Inspector
General's office which refers to ACORN membership dues was not part of the folder.
During training, we explain to AmeriCorps members what ACORN is and what its
role was in creating AHC. We do not send AmeriCorps members out into the community
during training to solicit membership in ACORN. As part of the training, we have trainees
participate in a community activity, such as voter registration or community education on
lead-based paint poisoning. This a one time event which is typically 2-3 hours on a
Saturday, during the training period.
Myrtle Cleveland went through the training program in Philadelphia and then was
assigned to the AHC Dallas office. After she started work in Dallas, I had a telephone
conversation with her during which she asked whether she should solicit or collect
ACORN membership dues from loan counseling clients. I was surprised that she would
ask this question, in light of her training. I advised her unequivocally that she should not
solicit for ACORN membership because she had nothing to do with ACORN. I then told
Ms. Cleveland that I wanted to speak to Liz Wolfe to ensure that she understood that
AmeriCorps members cannot solicit for ACORN. I also asked Ms. Wolfe to ensure that
the other ACORN organizers understood this.
I hereby declare under penalty of perjury that the foregoing is true and correct to
the best of my knowledge, information, and belief.
Dated: 8-17-95
Manls Marilyn Ashley Dishly
ACORN HOUSING INTAKE FORM
DATE
Name
SSN
-
-
Last
First
MI
Street Address
City/State/Zip
Home Phone
Work Phone
Previous Address
Race
Sex
Age
Disability
Marital Status
Do you currently own a house? [ ] yes [ ] no Have you owned a house in the past 3 years? [ ] yes [] no
How did you hear about the program?
Real estate company
Agent
Address
Telephone
NAME OF
DATES OF
W-2
EMPLOYER
TITLE
EMPLOYMENT
FORMS
Co-Borrower
SSN
-
-
Last
First
MI
Street Address
City/State/Zip
Home Phone
Work Phone
Previous Address
Race
Sex
Age
Disability
Marital Status
Do you currently own a house? [] yes [] no Have you owned a house in the past 3 years? [] yes [] no
NAME OF
DATES OF
W-2
EMPLOYER
TITLE
EMPLOYMENT
FORMS
List the people who will live in the new house:
NAME
Relation, age & sex
Gross
Source of
Monthly
Monthly
Income
Food-
Income
stamps
1.
2.
3.
4.
5.
6.
7.
total
total
total
GRAND TOTAL Monthly Income
(gross income plus foodstamp income)
YEARLY GROSS INCOME (x12)
% median family income
Current Rent Payment
Utilities not included in rent [] electricity
[] gas
[] phone
[] other
(list monthly payments)
Other Monthly Payments (credit cards, loans, child support payments, etc.)
OWED TO:
BALANCE
MONTHLY
OUTSTANDING:
PAYMENT:
1.
2.
3.
4.
5.
6.
7.
total
Do you have any credit problems we should know about?
[] yes
[] no
If yes, please describe in detail.
Do any of the other income providers have credit problems?
[] yes
[] no
If yes, please describe in detail.
HOUSING AFFORDABILITY WORKSHEET
Address of house for the loan
Street address
City/state/zip
Property sale price
Amount to be borrowed
Interest rate
Length of loan (years)
Principal & interest
Downpayment
Taxes [monthly]
+
Estimated Settlement
Insurance [monthly]
+
Cash needed up front
Total Housing Payment
Monthly debt payment
+
TOTAL FUTURE DEBT
Front end ratio
Back end ratio
Monthly Gross Income
Monthly Gross Income
Max. Monthly House Payment
Max. Monthly Debt
Actual Housing Payment
Actual Future Debt
Current Rent Payment
SOURCE OF FUNDS
Savings Account 1
Savings Account 2
Checking Account 1
Checking Account 2
Cash on hand
Gift
Grant
Sellers Assist
Total
[ ] Budget attached
CLIENT FILE CHECKLIST
CLIENT'S NAME
COUNSELOR
INITIAL INTERVIEW
DATE COUNSELING ENDED
proof of income
3 most recent pay stubs
SSI statement
tax returns forms past 2 years
public assistance statement & food stamps
W-2 forms past 2 years
child support
schedule C
alimony
bank statements and credit union statements (past 3 months)
savings accounts
checking accounts
money for credit check
credit report (date run)
other documentation
latest statements on all credit accounts
agreement of sale
census tract
notice of settlement
qualified buyer
yes
no
loan referral form
budget / credit / savings
settlement grant request form
referred by
STATUS UPDATES
DATE
STATUS
MORTGAGE APPLICATION CHECKLIST
Applicant's Name
Appointment Date & Time
Bank
Branch Address
Loan Officer
You should bring the following items to your appointment with the bank:
(1) Proof of income
3 recent paystubs or award letter from DPA, SSI or Social Security. Include proof of
food stamps or child support, if applicable.
(2) Tax returns and W-2 forms
Bring past 2 years of forms, unless you are self-employed. If self-employed, bring
past 3 years of returns, and be sure you have your profit and loss statements.
(3) Mortgage application fee
Amount
(4) Signed Agreement of Sale and any addendum to the agreement of sale
(5) Brokers estimate of settlement cost
(6) Receipt for downpayment
Copies of all money orders, checks or canceled checks used for deposit.
(7) Referral letter from ACORN Housing Corporation
(8) Information on savings and checking accounts
Bring the account numbers and last 3 statements or passbooks for each account.
(9) Information on loans, credit cards and all other credit accounts
Bring the addresses and account numbers for all credit accounts. Bring last statement
for each account, and coupon payment books if applicable.
(10) Name and address of previous landlords
Bring information for all landlords from the past 7 years.
If you encounter any problems at the bank,
please contact ACORN Housing immediately at 765-1221.
The undersigned agree that the above information is true to the best of our knowledge and can be used to
obtain a credit report for counseling purposes.
Applicant
Date
Counselor
Date
Co-borrower
Date
FIRST TIME HOMEBUYER CERTIFICATION
I certify that I have never owned a house.
[ ] yes [ ] no
I certify that I have not owned a house in the past 3 years
[ ] yes [ ] no
The undersigned agree that the information checked above is true to the best of our knowledge.
Applicant
Date
Co-Borrower
Date
STATEMENT OF UNDERSTANDING
I understand that ACORN and ACORN Housing Corporation are separate corporations and that neither one can
guarantee that I will receive a mortgage from a lender. The decision to approve any loan is made by the lender
ACORN Housing will work to prepare me for my loan application in a manner most likely to be approved by a
lender.
I understand that the ACORN Housing loan counseling program is available without charge to low and moderate
income people who want to buy a house.
Applicant
Date
Co-Borrower
Date
ACTIVITY LOG
DATE
& TIME
ACTIVITY
Julius Morgan, Mortgage Counselor
ACORN Housing Corporation of PA
846 North Broad St.
Philadelphia, PA 19130
(215) 765-1221 phone (215) 765-0045 fax
Your next appointment to see your counselor is scheduled for:
Date
Time
Please bring the following information to your appointment:
[ ]
Pay stubs
[ ]
Bank statements or credit union statements
[ ]
Tax returns
[ ]
$10 for credit check
(no cash accepted, please make check or money order payable to "ACORN
Housing Corporation of PA")
[ ]
Proof of balances paid off or payment arrangements made on:
[ ]
It is important that you come to the BUDGET COUNSELING CLASSES.
You are signed up for the classes meeting on:
ACORN Housing Corporation
846 N. Broad St., Philadelphia, PA 19130 (215) 765-1221
Your Homebuyer Class is:
Promptly at 6:00 pm, Tuesday,
ACORN Housing Corporation office
846 N. Broad St., Second Floor
Between Poplar and Parrish, Girard Stop on Broad St. Line
Please bring photocopies of the following:
Proof of Income:
-
3 most recent paystubs
Social Security and SSI award letters
DPA Slips
Court ordered child support papers
-
Check or money order made payable to "ACORN Housing
Corporation of PA" or "AHC of PA" for credit report
$20 individual/ $25 married couple
No Cash Please
- Last three years of W-2 forms and 1040 income tax forms
If self employed, bring last 3 years of Schedule C 1099 forms
-
Last 3 month's bank statements (checking and savings)
ACORN HOUSING CORPORATION
LOAN COUNSELING REFERRAL FORM
TYPE OF LOAN (circle one):
MORTGAGE
HOME IMPROVEMENT
Applicant's Name
Co-Applicant's Name
Property Address
Real Estate Agency
Comments:
THIS CERTIFIES THAT THE ABOVE LISTED CLIENT HAS RECEIVED HOMEOWNERSHIP
COUNSELING FROM OUR AGENCY AND IS BEING REFERRED TO YOU FOR THE
PURPOSE OF OBTAINING A LOAN FROM YOUR BANK.
Authorization
The undersigned (the "Borrowers") are receiving loan counseling from ACORN Housing Corporation. The
Borrowers authorize each lender to whom they are applying for a mortgage and ACORN Housing Corporation to
share all information contained in the Borrower's loan application, including all financial information, credit
history, and any third party information obtained for the mortgage application. This information will be used by
ACORN Housing Corporation to assist the Borrowers in qualifying for a mortgage.
The Borrowers authorize the Lender to notify ACORN Housing Corporation in the event that their loan payments
become delinquent.
The Borrowers also give permission to share financial information for activities under the Fair Housing Act.
By signing this waiver, the Borrowers acknowledge that they have read and understand the provisions of the
Waiver.
Applicant
Date
Co-Applicant
Date
Referral Agent, ACORN Housing
Date
Monthly Income / Expense Record
EXPENSE
DUE DATE
AMOUNT
MONTHLY
TOTAL OUTSTANDING
BALANCE
Rent/Mortgage
Gas/Oil
Electric
Water/Sewage
Phone
Life Insurance
Car Insurance
Taxes (if not included in mtge)
Homeowner's/Tenant's Insurance
(if not included in mtge)
Installment Loan with
Installment Loan with
Charge Account
Charge Account
Charge Account
Charge Account
Food-Grocery Store
Auto Maintenance
Gasoline/Transportation
Medical
(coctor, dentist. prescriptions. eyecare)
Daycare
Lunches/snacks. coffee, etc.
Cable TV. pay per view, video rental
Dry cleaning, laundry
Gifts-Holidays
Gifts-Birthdays. anniversaries
Education expenses (including books)
College fund
Church/religious donations
Other donations
Pet expenses
New clothing/shoes
Barber/hair salon
Allowances (including children)
Cigarettes/beverages (including alcoholic)
Newspaper/magazines, etc.
Entertainment (including babysitting expense)
Fast food
Clubs. sports hobbies
Emergency savings
Saving for
Other Expenses
-
= $
If expense is payroll deducted mark with a D
Total Net Income - Total Expenses
If expnses occur sporadically mark with an X
ACORN
Housing Corporation
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AUG-17-95 17:46 FROM:HOLLAND & KNIGHT B
:2029555564
PAGE 2/6
DECLARATION OF BRUCE DORPALEN
I, Bruce Dorpalen, do hereby declare as follows:
I am the Assistant Director of ACORN Housing Corporation. I
am responsible for the loan counseling programs of ACORN Housing
Corporation. I live at 4827 Kingsessing Avenue, Philadelphia,
Pennsylvania 19143.
I have reviewed the July 17, 1995 letter from Luise Jordan to
Eli Segal discussing the Office of Inspector General ("OIG") audit
and investigation of AHC. I also have reviewed the sworn
statements that the OIG obtained from Robert X. Mendez, Mable
Pierre, Tavius Jones, Myrtle Cleveland, Monica Craig and Annie
Carter. Those statements are inaccurate or incomplete in a number
of respects. I will not attempt to make a point-by-point rebuttal
of all those statements in this declaration but, instead, will
address what I understand to be the more important issues raised by
OIG about AHC's conduct. For expository purposes, I will organize
my remarks according to the three AHC offices involved--New
Orleans, Dallas and Phoenix.
I. NEW ORLEANS
In very early April 1995 I received a copy of Pat Simon's
March 31, 1995 memorandum to Antoinette Davis and Dorothea Allman
about their alleged noncompliance with "national loan counseling
policy." Soon after, I received a copy of a response prepared by
Ms. Davis and Ms. Allman. This was the first that I heard about
the issue. I immediately called Ms. Davis to investigate what had
happened. I then explained to Ms. Davis that (i) no such national
loan counseling policy existed, and (ii) AHC would not in any event
terminate AmeriCorps Members because they failed or refused to
refer loan counseling clients to ACORN. I added that this issue
should be cleared up promptly with Ms. Davis and Ms. Allman. Ms.
Simon assured me that she would talk to the two women the very next
morning to straighten things out. Shortly thereafter, I received
another memorandum from Ms. Simon asking that the original
memoranda be pulled from files and discarded so that there would be
no possibility of any taint to the records of Ms. Davis and Ms.
Allman. At that point, I believed that the matter had been cleared
up and resolved to everyone's satisfaction.
AmeriCorps Members are clearly instructed during training that
AHC is separate from ACORN and that they are not to solicit
membership in ACORN, nor to collect membership dues for ACORN.
However, AHC has not believed that it is impermissible to make its
clients aware of ACORN, or to cooperate with ACORN in outreach or
recruitment efforts that are mutually beneficial. For example, AHC
and ACORN jointly sponsor annual "bank fairs" in most AHC cities,
in concert with several local banks. These fairs are city-wide
affairs and generally are conducted on a Saturday. Both AHC and
ACORN utilize these fairs as for educational and outreach purposes,
but each organization does its own presentations at these fairs.
- 2 -
Similarly, AHC and ACORN each make presentations at events
sponsored by the other organization. For example, AHC conducts
neighborhood "homebuyers shows" explaining how to buy a home.
Lenders participate in these events and solicit business for their
institutions. ACORN personnel may also participate and explain
what ACORN does. Conversely, ACORN conducts neighborhood meetings
that address issues such as police protection, schools, recreation,
vacant lots and houses. AHC personnel attend some of these
meetings and explain AHC's loan counseling program.
In some cities, including New Orleans, AHC and ACORN routinely
conduct "intake" meetings at which both AHC and ACORN personnel
speak about their respective organizations. In New Orleans, this
is supplemented by a practice of cross-referral so that prospective
clients/members who have not attended an intake meeting are
afforded the opportunity to hear about both organizations from
representatives of each.
II. DALLAS
Tavius Jones was the original AmeriCorps supervisor in the
Dallas AHC office. She did not complete her training and start
work in Dallas until a couple of weeks after two AmeriCorps
Members, Gwen Jones and Pamela Wick, had already started there.
Byron Posadas was another AHC (non-AmeriCorps) loan counselor in
the Dallas office; he never was a supervisor or an official in that
office.
Tavius Jones was the director for a brief period, only about
two months. She was not a very effective leader, and the office
did not function in an acceptable way under her supervision. Staff
discipline was very low and the office's productivity was also low.
Ultimately, the decision was made to replace Tavius Jones as
director. I spoke to her by telephone about this decision. I
explained that she would be shifted laterally into another position
with no change in salary, but she complained that it was a
demotion. Thereafter, she never resumed full-time work in the
Dallas office although she did make brief appearances on several
days. Ms. Jones did receive pay for medical leave and vacation
days. I insisted that she provide documentation to support the
medical leave. I never offered to pay Ms. Jones for doing nothing,
nor did I ever ask her to fill out time sheets reflecting that she
was at work when she wasn't there. In fact, I stressed that I
needed timesheets which reflected actual hours worked. Ms. Jones
used up all of her leave and failed to return to work.
It is a very clear AHC policy that no preferential treatment
is to be given to ACORN members (or anyone else) with respect to
the provision of loan counseling services. I am not aware of any
- 3 -
preferential treatment being given by AHC loan counselors (either
AmeriCorps Members or non-Members) to ACORN members in the Dallas
office.
Tavius Jones' allegation that I and Liz Wolfe manipulated the
award of a NationsBank grant to pay client closing costs so that it
benefited ACORN members is absolutely false. The grant funds were
allocated in 1994, prior to the inception of the AmeriCorps program
in Dallas. Thus, Ms. Jones never was to have had a role in
allocating these funds. Furthermore, Liz Wolfe of ACORN played no
role in the fund allocation. The funds were allocated by AHC staff
in Dallas on essentially a first come-first served basis, with no
preference given to ACORN members. I had no involvement in the
allocation.
I never told Tavius Jones (or anyone else) that AmeriCorps
Members were to ask clients to join ACORN. During loan counseling
training in Philadelphia, AHC tries to have the trainees do some
community activity so that they get a taste of going out into the
community. Usually, this activity has been community education on
issues like lead paint poisoning or voter registration, an activity
that AHC had been advised was permissible by the Corporation for
National Service ("CNS"). On one occasion, ACORN was doing a
project on lead paint poisoning. AmeriCorps Members went out into
the community and passed out fliers for a meeting on that issue.
ACORN members went along with them and may have done some
recruiting at the same time. However, the AHC trainees certainly
were not supposed to be going door to door, recruiting for ACORN.
To the best of my knowledge, they did not do so.
Myrtle Cleveland was an AmeriCorps Member in Dallas. She
started leaving the office for several hours in the afternoon.
(This was time for which she was being paid). Tavius Jones
informed me that someone asked Ms. Cleveland what she was doing,
and she said she was doing campaign work for the re-election of a
Dallas City Council member, Charlotte Mayes. In response, I asked
Tavius Jones to speak with Ms. Cleveland and ascertain what was
happening. Ms. Jones spoke to Ms. Cleveland, who admitted that she
was doing political work. At this point, I spoke to Ms. Cleveland
by telephone about the issue. I told her that it was a gross
violation of AmeriCorps requirements. She attempted to defend her
actions by claiming ignorance of the AmeriCorps prohibition on
political activity. I rejected this defense, and told her that the
AmeriCorps requirements had been emphasized to all Members during
training. She had been informed of this restriction both in
writing and orally, first during the training in Philadelphia and
again at the March 1995 orientation in Washington, D.C. I
terminated her and paid her through that day.
- 4 -
Two days later, Verna Kuo of CNS visited Philadelphia to
conduct a site visit at AHC. During this visit, I advised her of
the termination of Ms. Cleveland and the reason therefor.
Ms. Cleveland's allegation that she asked loan counseling
clients for $60 for ACORN membership is astonishing to me. As I
noted above, it is emphasized during training that AmeriCorps
Members are not to solicit membership in ACORN nor to collect dues
for ACORN.
III. PHOENIX
The AHC Phoenix office hired simultaneously for one non-
AmeriCorps fair housing position with AHC and for several
AmeriCorps loan counseling positions. Annie Carter was hired for
an AmeriCorps position. I later learned that she was interested in
the Fair Housing position and AHC then switched her with Monique
Rueles, who had been hired for Fair Housing position, but hadn't
started work. Ms. Carter was an AmeriCorps Member for only 2-3
weeks after training, before she was switched.
Contrary to Ms. Carter's allegation, there never was an issue
about her not being Hispanic in terms of filling the Fair Housing
position.
I never told Ms. Carter (or anyone else) that I knew of some
AHC offices where AmeriCorps members were collecting dues for
ACORN.
In addition to the loan counseling program, the AHC Phoenix
office also conducts a housing development program. This
"development program" involves the rehabilitation of housing stock,
followed by a "lease to own" program for low income persons. The
AHC staff support necessary for this program is essentially the
same as for loan counseling -- 1.e. outreach, intake, financial-
qualifying of clients. The conduct of this work is equally
permissible under AmeriCorps grant.
Monica Craig did work in support of both the development
program and the loan counseling program. She raised a concern with
her supervisor, Sabrina Garcia, that this dual role was a violation
of AmeriCorps requirements. Sabrina, in turn, raised this issue
with me at an AHC supervisors meeting in North Carolina. I
confirmed that it was not violation for an AmeriCorps Member to
work on the development program.
Ms. Craig's allegation that Sabrina Garcia was placed in a
circle at the North Carolina meeting and questioned about "not
having any productivity in ACORN membership" is completely
- 5 -
mistaken. At that meeting, there was a discussion with Ms. Garcia
and other office supervisors about income generating activities for
the local AHC offices. There was no discussion, then or at any
other time, about Ms. Garica recruiting new members for ACORN.
I hereby declare under penalty of perjury that the foregoing
is true and correct to the best of my knowledge, information and
belief.
Dated: August 12,1985 Brux Dengalh
Bruce Dorpalen
44935-1
August 17, 1995
WAS-117980
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DECLARATION OF PATRICIA SIMON
I, Patricia Simon, do hereby declare as follows:
1.
I reside at 7900 Sandpiper Drive, New Orleans, Louisiana 70128.
2.
I am employed by ACORN Housing Corporation ("AHC") in its New Orleans,
Louisiana office in the position of Director of Loan Counseling. I have held the position
since January 23, 1995.
3.
The operation of the AmeriCorps loan counseling program began on January 23,
1995. On that date I and three AmeriCorps loan counselors, Antoinette Davis, Dorethea
Allmon and Mable Pierre, began work in New Orleans office after completing three
weeks of training by AHC in Philadelphia, PA.
4.
After the commencement of the AmeriCorps loan counseling program in New
Orleans, an issue arose about the extent to which AHC and ACORN would cooperate in
conducting "intake" efforts of various sorts. ACORN staff were upset when AHC
counselors would not include them in some of loan counseling intake and outreach.
5.
AHC AmeriCorps members are clearly instructed during training that they are
NOT to solicit nor collect dues for ACORN. I and the other three AmeriCorps members
stood very strong and committed to our training.
6.
To clarify the relationship between AHC and ACORN regarding intake efforts, a
senior loan counselor, Doris Latorre, AHC national staff was sent to AHC New Orleans.
Doris conducted meetings with AHC counselors and with ACORN staff., Ms. Latorre
stated that joint or cooperative intake efforts were permissable. It was agreed that
ACORN staff would attend and speak at AHC intake meetings, and that AHC AmeriCorp
loan counselors would refer clients who had not attended such joint intakes to ACORN
staff. Likewise, ACORN would permit AHC staff to speak at its meetings and would
make individual referrals to AHC.
7.
Thereafter, on March 30, 1995, I received a memorandum from Jeff Karlson of
the ACORN Fair Housing Organization, whose offices are adjacent to ours.
(Attachment A). The memorandum complained that two AmeriCorps members, Ms.
Davis and Mrs. Allmon were violating "national loan counseling policy" because they
were NOT dropping off their loan counseling clients with ACORN Fair Housing outreach
coordinators. A copy of this memorandum was addressed to Bruce Dorpalen.
8.
In response to Mr. Karlson's memorandum the following day I wrote a
memorandum to Ms. Davis and Mrs. Allmon addressing Jeff Karlson's claim of violating
a "national policy" (Attachment B).
Page 2
Patricia Simon's Declaration
August 17, 1995
9.
Ms. Davis and Mrs. Allmon prepared a written response to which they sent to me
and to Bruce Dorpalen a few days later.
10.
The following day Bruce Dorpalen called me after he received these memoranda,
and asked, who is Jeff Karlson and what national policies is he referring to in his
memorandum? He told me that there was no national loan counseling policy. Mr.
Dorpalen added that AHC would NOT terminate AmeriCorps members for failure to
refer clients to ACORN.
11.
After I spoke with Mr. Dorpalen I called Ms. Davis and Mrs. Allmon into my
office to discuss the matter. We clearly identified we had experienced a breakdown in
communication and that we had violated NO policies locally or nationally. We identified
we had followed instructions and honored our committment to AHC AmeriCorps. We
verbally committed ourselves to becoming a stronger unit. We also agreed to throw out
the memos and not allow them to become part of anyone's personnel record.
Dated:
Patricia Simon
ATTACHMENT A
MEMO
ACORN Fair Housing Organization
TO:
Pat Simon
FROM:
Jeff Karlson At
DATE:
3-30-95
SUBJ:
Loan counseling referrals
Pat, I just wanted to let you know that we are running into problems with
two of your loan counselors, Antoinette Davis and Dorothea Allmon.
As you know, ACORN Fair Housing outreach coordinators and ACORN loan
counselors are working closely together all across the country.
From what I can tell so far, Antoinette and Dorothea are not working with us
as a team. Both you and Mable have been dropping your clients off with the
outreach coordinators. At no time recently can I remember Antoinette or
Dorothea bringing people to our office.
This is a violation of national loan counseling policy. Please remedy this at
once. We will continue to pursue this issue until it is adequately resolved.
CC: Beth Butler
Bruce Dorpalen
ATTACHMENT B
MEMO
ACORN Loan Counseling
To: Antoinette Davis and Dorothea Allmon
From: Patricia Simon PS
Date: 3-31-95
Subj: Loan Counseling Referrals
In response to memo received from Jeff Karlson on 3/30/95 addressing
problems with your not referring clients to outreach coordinators, I have
given you a copy of this memo and I have verbally informed you that this
violation will not be tolerated.
In the future, I expect you to fully cooperate and work closely with our
outreach coordinators at all our events. These events include all in-house
intakes, all outreach intakes, and all one-on-one interviews.
Future violation of this ACORN national loan counseling policy or any
other violation will call for your immediate termination from ACORN
Loan Counseling/New Orleans.
cc: Bruce Dorpalen
Beth Butler
Jeff Karlson
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4
DECLARATION OF ANTOINETTE DAVIS
I, Antoinette Davis, do hereby declare as follows:
1.
I reside at 2019 Bayou Road, New Orleans, LA 70116.
2.
I am an AmeriCorps Member working in the New Orleans office of ACORN
Housing Corporation ("AHC") under the supervision of Mrs. Patricia Simon. My term of
service in the AHC New Orleans office began on January 23, 1995, after three weeks of
training in Philadelphia, Pennsylvania.
3.
On or about March 30, 2995, Jeff Karlson, an ACORN Fair Housing Outreach
Coordinator, issued a memorandum to Mrs. Simon stating that I and Dorethea Allmon
were not in compliance with referring AHC loan counseling clients to ACORN Fair
Housing Outreach Coordinators.
4.
Mrs. Allmon an T were understandably upset and confused about this
memorandum and wrote a reply to it stating our cooperation with AHC Fair Housing
Coordinators and referred to said memorandum as a breakdown in communication which
was sent to Mrs. Simon and Mr. Dorpalen. Thereafter, the matter was discussed with
Mrs. Simon and recognized that in fact I and Mrs. Allmon were in compliance based on
our training and conditions of our contract as AmeriCorps members.
5.
I was trained in Philadelphia that, as an AmeriCorps Member, I was NOT to get
involved in recruiting persons to become members of ACORN. Since my return to New
Orleans that has been my stand and as a result I received a memorandum stating I was not
cooperating with the organizers. A meeting was held in New Orleans that was
coordinated by Doris Latorre and attended by all the AmeriCorps Members, Mrs. Simon,
several ACORN organizers including Jeff Karlson. The purpose of this meeting was to
clarify the relationship and responsibilities between AHC loan counselors and ACORN
organizers. Ms. Latorre stated that ACORN organizers could attend intake meetings and
attempt to recruit members, and that AmeriCorps members could make loan counseling
clients aware of ACORN and offer to introduce them to ACORN organizers.
6.
It is my understanding that as a AmeriCorp Member, I cannot push membership
in ACORN.
7.
I hereby declare under penalty of perjury that the foregoing is true and correct to
Dated: the best Qugust of my knowledge information 18,1995 and belief. Antainette Sanis
Antoinette Davis
022
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5
DECLARATION OF DORETHEA ALLMON
I, Dorethea Allmon, do hereby declare as follows:
1.
I reside at 7007 Olive Street, New Orleans, LA 70125.
2.
I am an AmeriCorps Member working in the New Orleans office of ACORN
Housing Corporation ("AHC") under the supervision of Mrs. Patricia Simon. My term of
service in the AHC New Orleans office began on January 23, 1995, after three weeks of
training in Philadelphia, Pennsylvania.
3.
On or about March 30, 2995, Jeff Karlson, an ACORN Fair Housing Outreach
Coordinator, issued a memorandum to Mrs. Simon stating that I and Antoinette Davis
were not in compliance with referring AHC loan counseling clients to ACORN Fair
Housing Outreach Coordinators.
4.
Ms. Davis and I were understandably upset and confused about this memorandum
and wrote a reply to it stating our cooperation with AHC Fair Housing Coordinators and
referred to said memorandum as a breakdown in communication which was sent to Mrs.
Simon and Mr. Dorpalen. Thereafter, the matter was discussed with Mrs. Simon and
recognized that in fact I and Ms. Davis were in compliance based on our training and
conditions of our contract as AmeriCorps members.
5.
I was trained in Philadelphia that, as an AmeriCorps Member, I was NOT to get
involved in recruiting persons to become members of ACORN. Since my return to New
Orleans that has been my stand and as a result I received a memorandum stating I was not
cooperating with the organizers. A meeting was held in New Orleans that was
coordinated by Doris Latorre and attended by all the AmeriCorps Members, Mrs. Simon,
several ACORN organizers including Jeff Karlson. The purpose of this meeting was to
clarify the relationship and responsibilities between AHC loan counselors and ACORN
organizers. Ms. Latorre stated that ACORN organizers could attend intake meetings and
attempt to recruit members, and that AmeriCorps members could make loan counseling
clients aware of ACORN and offer to introduce them to ACORN organizers.
6.
It is my understanding that as a AmeriCorp Member, I cannot push membership
in ACORN.
7.
I hereby declare under penalty of perjury that the foregoing is true and correct to
the Dated: best August of my knowledge information and belief. Dorethea Allmon CAlla
001
72
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6
SENT BY:HOLLAND & KNIGHT
; 8-16-95 ; 4:18PM :
H&K 2029555564 #2-
2148232415:# 2
DECLARATION OF GWENDOLYN S. JONES
I, Gwendolyn S. Jones, do hereby declare as follows:
1. I am employed by ACORN Housing Corporation ("AHC") in its
Dallas, Texas office in the position of Housing Director.
2. I commenced training with AHC as an AmeriCorps Member on
January 23, 1995 in Philadelphia, Pennsylvania. I started work in
the Dallas office on February 13, 1995. Initially, I was a loan
counselor. I was promoted to the position of Housing Director at
approximately the end of April.
3. When I started work in the Dallas office, there was no
AHC supervisor there. Pamela Wick and I were the only AmeriCorps
Members there. Byron Possadas and Maria Romero, AHC loan
counselors who were not part of the AmeriCorps program, were also
present. Approximately two weeks later, Tavius Jones, Xavier
Mendez, and Myrtle Cleveland started work in Dallas, upon
completing their AmeriCorps training in Philadelphia.
4. Tavius Jones was the initial Program Director in the
Dallas office. Unfortunately, Ms. Jones never provided active
supervision to the office and, as à result, things were very
chaotic. I expressed my concerns about this situation to my
colleagues and to Bruce Dorpalen in Philadelphia.
5. In April 1995 Matthew Mapram, the Program Director at
AHC's Houston office, came to the Dallas office for several days to
help us get organized and to get things running smoothly. He
interviewed the staff and made suggestions to improve our
operations.
6. Mr. Mapram returned to Dallas the following week and
ultimately offered me the position of Program Director. At that
time, Tavius Jones was out of the office, supposedly because of a
death in her family. She never returned to work in the Dallas
office.
7. During the training of AHC AmeriCorps Members in
Philadelphia, it was emphasized that we should not solicit members
for ACORN or collect dues for ACORN. It was also stressed that
participation in the AHC loan counseling program was not tied to,
or dependent on, a client joining ACORN.
8. I am not aware of any AmeriCorps Member in the AHC Dallas
Office ever soliciting membership in ACORN or collecting dues for
ACORN. Likewise, I am not aware of Mr. Possadas ever soliciting
membership in ACORN or collecting dues for ACORN. I know that Ms.
Romero did not do so because her job was administrative and she did
not interact with clients.
SENT BY: :HOLLAND & KNIGHT
; 8-16-95 ; 4:19PM ;
H&K 2029555564 #2-
21482324151# s
- 2 -
9. Whenever I have conducted intake meetings in Dallas, I do
not provide any information regarding ACORN or ask any prospective
clients to join ACORN. If a loan counseling client asks me about
joining ACORN, I reply that it is up to him/her but that joining
ACORN is not required in order to receive loan counseling.
10. ACORN organizers did attend some of the intake meetings
I conducted. After I had explained the loan counseling program,
the ACORN organizer would provide information about ACORN.
11. AHC and ACORN do engage in some other joint or
cooperative outreach efforts. For example, AHC and ACORN both
sponsored a bank fair in July that led to the recruitment of
approximately 100 families as prospective AHC loan counseling
clients. In addition, AHC receives direct referrals of loan
counseling clients from ACORN.
12. Liz Wolfe, an ACORN organizer in Dallas, once supposedly
made a comment at a staff meeting that AHC loan counselors should
give preference to ACORN members. I was not present when this
remark was made, but I heard about it from other loan counselors,
all of whom were upset by this remark. The loan counselors were
upset both because it is impermissible to give any preference to
ACORN members and because Ms. Wolfe, as an ACORN staffer, had no
business telling AHC staffers what to do. To the best of my
knowledge, no AHC loan counselor in Dallas ever gave any preference
to ACORN members. This incident happened while Tavius Jones was
the Program Director. Some loan counselors talked about reporting
this incident to higher AHC officials but I do not believe they
ever did so. By the time I became the Housing Director, this
matter had blown over. I am certain that no preference has been
given to ACORN members since I became Housing Director.
Dated: 18-14-95
Gwendolyn S. Jones
44935-1
August 16, 1995
WAS-117862
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DECLARATION OF SABRINA GARCIA
I, Sabrina Garcia, do hereby declare as follows:
1.
I reside at. 1934 East Jackson Street, Phoenix, Arizona
85034.
2.
I am employed by ACORN Housing Corporation ("AHC") in its
Phoenix, Arizona office in the position of Program Director.
3.
I have held the position of Program Director since March
28, 1995.
4. As Program Director of the AHC Phoenix office, my
responsibilities include the supervision of all AmeriCorps Members
working as loan counselors in AHC's "Home For All" loan counseling
program.
5. In addition to the loan counseling program, the AHC
Phoenix office also conducts a housing development program pursuant
to which AHC rehabilitates housing stock and then leases it to low
income persons pursuant to e "Lease to Own" program. In connection
with its various home ownership-related programs, AHC conducts
classes, on issues such as budget training, that are open to
participants in all of the various AHC programs. AmeriCorps
Members in the AHC Phoenix office have been requested to notify
participants in the various programs, together with those persons
on program waiting lists, of the date and times of classes being
offered by AHC.
6. I have never required or asked any AmeriCorps Member to
conduct any kind of meeting cr social event of area ACORN members
and, to the best of my knowledge, information and belief, no other
AHC official has ever required or asked any AmeriCorps Member to
conduct any kind of meeting or social event of area ACORN members.
7. For the past several years the AHC Phoenix office has
been holding a potluck dinner, on an approximately monthly basis,
that is open to all AHC clients. The purpose of the potluck
dinners is to lat people get to know each other better in a relaxed
setting as a way of building trust. AmeriCorps Members are invited
but are not required to attend. AmeriCorps Members are sometimes
asked to call AHC clients to invite them to the potluck dinners.
8. The potluck dinners sometimes have a theme. On June 25,
1995, a potluck dinner was held by AHC. The theme of this dinner
was the 25th anniversary of ACORN.
9. In the AHC training program, it is emphasized that
AmeriCorps Members are not to solicit for ACORN. I am not aware of
any AmeriCorps Members in the Fhoenix office ever soliciting
persons to become members/of ACORN. I have never been told that
AmeriCorps Members should even make their loan counseling clients
- 2 -
aware of ACORN, much less solicit them to join ACORN. I do not
even mention ACORN to my loan counseling clients.
10. I understand that Monica Craig has alleged that I told
her that, during an AHC meeting in North Carolina, I was questioned
about not being productive in scliciting ACORN memberships. This
is absolutely false. During the meeting in North Carolina, there
was discussion about fundraising for AHC. There was no discussion,
then or at any other time or place, about soliciting ACORN
memberships.
11. Likewise, I am not aware of any AmeriCorps Members in the
Phoenix office collecting ACORN membership dues. I understand that
Annie Carter has alleged that AmeriCorps Members collected money
from ACORN clients that included both their rent and their dues.
This allegation is mistaken and appears to reflect confusion on Ms.
Carter's part. First, as noted above, the persons participating in
the "Lease to Own" program are clients of AHC, not ACORN. Second,
the collection of rent from those clients is supposed to be handled
by AHC staff assigned to the development program, rather than by
AmeriCorps Members in the loan counseling program. Nonetheless,
AmeriCorps loan counselors sometimes are in the office later in the
evening than development personnel, and do accept rent payments
when clients come in, rather than requiring them to return the next
day. However, I am not aware of AmeriCorps members ever collecting
ACORN dues together with rent payments. In fact, I do not know how
they could distinguish which tenants are or are not ACORN members.
12. Both Monica Craig and Annie Carter were on the staff of
the AHC Phoenix office at the time that I arrived. Ms. Craig was
an AmeriCorps loan counselor. Ms. Carter was not an AmeriCorps
member. She divided her time between loan counseling and fair
housing responsibilities. Ms. Carter and Ms. Craig went out to
lunch together at noontime on Thursday, June 26, 1995. Neither of
them ever came back to the AHC Phoenix office. Their abrupt
departure came with no advance notice whatscever. Prior to their
departure, I believed that they had not been performing all of
their assigned responsibilities and I had been pressing them to
perform as they should.
13. The only concern that either Ms. Craig or Ms. Carter ever
expressed to me about being asked to perform improper activities
was Ms. Craig's concern that work for the AHC housing development
program was impermissible for AmeriCorps Members to perform. I
raised this concern with Bruce Dorpalen at an AHC staff supervisors
meeting in North Carolina, Mr. Dorpalen confirmed my understanding
that it was completely appropriate for AmeriCorps Members to
provide support to the AHC housing development program. I so
advised Ms. Craig upon my return to Phoenix.
- 3 -
I hereby declare under penalty of perjury that the foregoing
is true and correct to the best of my knowledge, information and
belief.
Dated: 8-19-95
Sabrina Garcia
44935-1
}
August 17, 1995
WA8-116321
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DECLARATION OF MARTIN R. SHALLOO
I, Martin R. Shalloo, do hereby declare as follows:
I hold the position of Director of Development Projects for the
ACORN Housing Corporation ("AHC"). As such, I am responsible for
overseeing various projects of AHC around the country including
the Phoenix project. During the Spring of this year (1995), I
spent several weeks in the Phoenix office including at least
seven weeks during the months of March, April and May. During
these visits, I had occasion to oversee various events in the
office, provide supervision and/or assistance and training to
various staff.
I have reviewed the sworn statements that the Corporation for
National Service Office of Inspector General obtained from Monica
Craig and Annie Carter on June 26, 1995. Those statements are
inaccurate in a number of respects.
When Monica Craig was hired as an Americorp member she was hired
to assist low-income persons to become homeowners through
conducting outreach to the community, providing or assisting in
the provision of financial counseling and other homeownership
training to these applicants in order to assist them to become
homeowners. These homeownership assistance programs were run by
the AHC. None of the homeownership assistance programs conducted
by AHC in Phoenix require applicants to be members of the
Association of Community Organizations for Reform Now ("ACORN").
In years past, AHC had run homeownership programs that required
participants to become members of ACORN, however this had not
been true since at least 1992.
The office director at the time that Monica was interviewed was
in fact the director of the homeownership development program.
Monica Craig was aware of this.
There were two primary homeownership programs that Monica was
asked to work on, a lease-to-own homeownership program that
enables homebuyers to own single family houses and a housing
counseling program. These programs were very similar in the
manner in which they prepared applicants to become homebuyers. In
addition, through the lease-to-own program AHC purchased and
rehabilitated houses that were made available to
tenant-homebuyers on a lease basis prior to the tenant-homebuyer
exercising their option to purchase the house. This purpose is
specifically designed to assist persons who currently would be
unable to obtain a loan from a mortgage lender due to minor
credit problems or lack of downpayment. AHC monitors their
payment performance during the lease period.
The primary purpose of Monica's position was to conduct outreach
into the community to make low-income people aware of how the
project could assist them and to provide homeownership counseling
and training to persons being assisted by the program. These
persons were either on a waiting list for houses or currently in
houses developed by AHC. Monica was asked to conduct several
tasks related to these duties including providing financial
evaluations and counseling to persons on the waiting list; to
review files of existing applicants for completeness of financial
information; to conduct intake meetings to explain the program to
persons from the community; to call or otherwise notify persons
on the waiting list and in AHC developed houses for a variety of
events that included maintenance training classes, budget
training classes or social events such as potluck dinners; on
occasion to collect rent payments from persons in AHC developed
houses; to track the completion of homeownership classes and
other training designed to prepare persons on the waiting list to
be homeowners; to provide financial information to the project
director about families on the waiting list for use in qualifying
them for a house and preparation of loan applications and any
other activity that would assist persons on the waiting list to
prepare for homeownership or tenant-homebuyers in AHC houses to
prepare financially and otherwise to assume ownership on their
houses.
AHC uses a variety of means to determine the financial capability
of the low-income households we assist to meet the financial
obligations of homeownership including review of their financial
position, monitoring of monthly rent payments and ongoing contact
with tenant-homebuyers to assist in forecasting of future
financial problems.
Community outreach which included production and distribution of
promotional materials such as posters, flyers, submitting public
service announcements and letters to realtors.
Notification of upcoming events or program information was
provided to persons on the waiting list or in AHC developed
houses in several ways, through phone calls, through distribution
of a calendar, through speaking with them when they came to the
office to make rent payments, through announcements at
homeownership training classes, at the monthly housing meeting
and through letters or newsletters sent to these persons. The
monthly housing meeting announced the upcoming calendar of
events, any new houses that would be available to persons on the
waiting list and provided a participation status report to
persons on the waiting list.
I conducted the March housing group meeting, Jeff King (with
Monica in attendance) conducted the April meeting and Jeff King
(without Monica in attendance) conducted the May meeting.
Monica was never asked by me to write an article for an ACORN
publication and certainly this would have been clearly against
policy and would not have been condoned. It was known to me that
she was asked to write an article for a newsletter that was to be
published and paid for by AHC and distributed to persons on the
waiting list and in AHC developed houses.
I personally instructed Monica not to solicit memberships in
ACORN. Any representation by her that solicitation of
memberships by Americorp members would have been condoned by
myself or Jeff King is wrong.
In order to conduct intake meetings for the lease-to-own program,
Monica was given a set of "Questions and Answers". Monica was
informed that the first version of these was erroneous, as the
program had changed over the years, and needed to be revised.
Monica attended an intake meeting that I conducted in early
March. At that meeting we read through the Questions and Answers
sheet and then took questions from the attendees. (Unless Monica
was simply not paying attention at that meeting she would have
read these then rather than in April as she says in her
affadavit). I deleted all references to joining ACORN from that
meeting and specifically discussed the errors in that form and
specifically discussed that it was outside of her scope of duties
to discuss membership in ACORN with persons attending that
meeting.
When I was in Phoenix in March, I had a discussion with Monica
about providing outreach and housing counseling for lease-to-own
program run by AHC in Phoenix. At that point in time she
indicated she would like to do that.
There was never a discussion that the work that Monica was asked
to do for the lease-to-own program was in violation of Americorp
policy. The discussion was a resource discussion about whether,
given the current staff losses, there was sufficient staff to
carry out the loan counseling program to AHC standards with
Monica devoting part of her time to work with her lease-to-own
portfolio of clients.
Monica was a less than model employee who needed to be monitored
on a daily basis by her supervisor to insure completion of tasks
assigned to her. This was stressful for her supervisor and in
all likelihood for her.
Regarding the matter of Annie Carter's position as an Americorp
member or a fair housing counselor. Both I and Doris LaTorre
were in the Phoenix office at the time of this discussion. I had
initially interviewed Monique Rueles as a loan counselor and
recommended to Bruce Dorpalen that she could be the fair housing
counselor. In part this recommendation was because she was
bilingual in English and Spanish.
When Doris LaTorre made me aware that Annie Carter thought that
she had been promised the fair housing position, I spoke to Wanda
Neil (CO). Wanda indicated that she had indeed promised the fair
housing position to Annie Carter. Doris and I called Bruce
Dorpalen and discussed this matter with him. It was decided that
since Ms. Neil had offered this position to Annie Carter and the
position had not been offered to Monique Rueles, Annie could be
given the position.
Doris and I met with Annie to inform her of this and that this
meant she would no longer be an Americorp member. As such she
would no longer be eligible for the Americorp benefits (such as
the education and health care benefits). She indicated that this
was fine and that she would prefer the fair housing position.
Annie was then given that position. There was never a discussion
about the position needing to be filled by a Hispanic. There was
a discussion about us prefering the position be filled by a
person who was bilingual in English and Spanish. After this
discussion we called Bruce and told him about it and then spoke
with Sheri Blick to get her to send the appropriate Americorp
forms to terminate Annie's participation in Americorp.
Annie never asked for anything in writing at this meeting.
I don't know the exact number of days Annie was an Americorp
member after she returned from training but it had to be under
one week and I believe it was 3 days.
Annie, like the rest of staff, was asked to wear many hats. It
was important to AHC to service its tenant-homebuyers quickly and
in a professional manner. This was sometimes difficult since
they may drop in to deliver a rental payment, ask for program
information or tell us sbout a maintenance problem at a time when
the staff that would normally handle this was out of the office,
on other business or at lunch. Other staff, including Annie
would be asked to handle these situations. Since none of the
house payments include dues to ACORN, AHC staff did not see the
handling of these payments as a problem.
Annie Carter states in her affadavit that she did not recruit
ACORN members "because I didn't know anything about the
recruitment part for ACORN". This 18 because, as she was
instructed by numerous AHC staff, this was not her Job.
During the time I was in Phoenix through most of March and April,
Annie spent a lot of time revising forms and other handouts that
did not quite fit the program and were meant to be adapted to the
new programs. Given her clear understanding of the policy not to
recruit ACORN members, it is bizare to me that she would not have
revised out anything that was clearly against stated AHC
policies.
During her time working for AHC in Phoenix, Annie never handled
payment of bills or expenses. She had no direct knowledge of the
financial systems or program income. She did collect an
occasional rent payment. Also during her time working for AHC,
she knew that the Phoenix office had difficulty getting office
equipment including computers and office heating and air
conditioning equipment repaired due to lack of funds. Her
statement that she "thought [AKC] was very profitable" is
directly contrary to her actual experience.
There are additional inaccuracies in the statement of Ms. Craig
and Ms. Carter which I have not addressed herein.
I hereby declare under penalty of perjury that the foregoing 18
true and correct to the best of my knowledge, information and
belief.
Dated: 8/17/95
nurseb Martin R. Shalloo
20°2
01
08-18-1995 09:33AM FROM ACORN HOUSING CORP.
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
9
DECLARATION OF MICHAEL D. SHEA
I, Michael D. Shea, do hereby declare as follows:
I am the Executive Director of ACORN Housing Corporation.
In early June of 1994 the Corporation for National Service informed me via fax that
ACORN Housing Corporation was a finalist in the AmeriCorps grant selection process.
The fax instructed me to call Corporation for National Service in order to schedule an
interview. I made the call and was instructed to come to Washington, D.C., two days later.
ACORN Housing Corporation was represented at the interview by Bruce Dorpalan,
Marilyn Ashley, Bertha Lewis and Mike Shea. Attending the interview session for the
Corporation for National Service were Verna Quo, Michael Arthur, a consultant whose
name I can't recall, and Terry Russell.
At the meeting I explained that in 1985 ACORN Housing Corporation was spun off as a
seperate, tax-exempt corporation from ACORN in order to implement homeownership
programs. I stated that AHC has continued to work with ACORN, and that in particular
AHC's work with ACORN around redlining and discriminatory lending practices had
produced many of the landmark lending agreements with private lenders which form the
backbone of AHC's loan counseling program. I also explained that our experience had
taught us that a "paper partnership" with lenders did not produce homeownership for low
income families; an aggressive outreach and counseling program is necessary in order to
turn the promise into reality.
Bruce Dorpalan and Bertha Lewis added more information about the history of ACORN
Housing and our loan counseling program. I remember that one of us said--I believe that it
was Bertha--that AHC encourages its clients to become involved in civic affairs by
becoming active in community groups, such as ACORN. Bruce said that AHC works with
ACORN and other groups on community outreach, and that ACORN is a very valuable
source of client referrals to AHC.
I recall asking the CNS representatives whether or not AHC's historical relationship to
ACORN presented a problem. Terry Russell responded by saying: "We are going into this
with our eyes open I'm familiar with ACORN and their reputation. I believe that Mr.
Russell then told a story about a personal experience years before with an ACORN
demonstration. Mr. Russell proceeded to review the AmeriCorps program prohibitions
against demonstrating, protesting, or lobbying. He then asked whether or not ACORN
Housing worked with ACORN on these activities. I responded that AHC was very much
aware of the AmeriCorp prohibitions against demonstrations and that AHC was not in the
demonstration business. I said that we would be extremely diligent to make sure that
AmeriCorps members did not participate in these activities.
At no time during this entire exchange did Mr. Russell or any of the other representatives
from the Corporation for National Service indicate that ACORN Housing would be
required to sever its relationship with ACORN.
I hereby declare under penalty of perjury that the foregoing is true and correct to the best of
my knowledge, information and belief.
Dated: August 17,1995
Michael D Shea
Michael D. Shea
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
10
CURPORATION FOR
NATIONAL
COMMUNITY
SERVICE
QUESTIONS AND ANSWERS
CORPORATION GRANT PROGRAMS
April 18, 1994
1100 VERMONT AVENUE. 14 . H ASHINGTON, DC 20525
This document is not intended to be all-inclusive or to be a substitute for
information detailed in the Corporation's regulations; rather, these answers
clarify and discuss frequently asked questions and address issues raised during
the course of technical assistance workshops and conference calls held over the
past few months.
APPLICANT ELIGIBILITY
Will consortia of institutions of higher education be able to apply for
AmeriCorps funding? If so, will they apply through the State Commission?
Yes. Institutions of higher education, or consortia of such institutions,
proposing AmeriCorps programs that will operate in their local communities
or within one state must apply through their respective State Commissions.
However, professional corps programs, programs involving a partnership
among institutions in more than one state, and programs run by a consortia
or nonprofit with an explicit, well-conceived national or multi-state strategy
may apply directly to the Corporation for AmeriCorps funds.
Are former Commission-funded Youth Corps eligible for funding?
Yes, the Youth Corps may be eligible for AmeriCorps funds directly from the
Corporation or from the States. For fiscal year 1994, the Corporation will give
priority to American Conservation and Youth Service Corps Programs and
National Service Demonstration Programs that received funding from the
Commission on National and Community Service. This priority, however,
does not constitute a guarantee for renewal funding: the Corporation expects
that those programs that meet the minimum requirements and quality
standards will receive support. The Corporation also will encourage the
States to give priority to these programs.
Can religious volunteer organizations apply for AmeriCorps and Learn and
Serve America funds?
Yes. Religious organizations may apply for these funds, provided they meet
the eligibility criteria for the programs. However, under no circumstances
may a religious organization (or any other organization) use Corporation
funding to provide religious education or instruction, conduct worship
services, engage in any form of religious proselytization, construct or operate
facilities devoted to religious instruction or worship, or maintain facilities
primarily or inherently devoted to religious instruction or worship.
Although existing staff of religious organizations may continue to work
regardless of whether the staff is diverse, religious organizations, like any
other organization, must seek actively to achieve diversity among its
program participants and staff.
Can a national nonprofit apply to a State on behalf of its regional affiliate
located in the State and also apply for other programs in other states?
Yes. However, a project may not receive funding from more than one
Corporation source. If a project is already described in an application pending
4.
before the Corporation, and another application is submitted with a proposal
for that same project, the second application will be rejected.
If a national nonprofit does not participate, may its regional organization
apply directly to the Corporation?
The regional affiliate may apply directly only if it proposes a multi-state
program or a professional corps. A regional organization may apply directly
projects. to the Corporation at the same time as its national if it is proposing different
May a nonprofit lobbying organization be an AmeriCorps service and
program sponsor? May the lobbying organization engage participants in
research and data collection activities?
A nonprofit lobbying organization is eligible to be an AmeriCorps service
and/or program sponsor. Lobbying organizations (like other eligible service
or program sponsors) must engage participants in service activities that
provide a specific identifiable service or improvement that otherwise would
not be provided with existing funds or volunteers and does not duplicate the
work of existing employees. Although some activities, such as research and
data collection, may not provide a direct benefit to the community, and
cannot be the primary activity of a national service program, such activities
may be performed by participants if the performance of such activities
provides support for direct service activities. For example, a participant
engaged in an immunization project may collect data to determine how
many children have not been immunized in the community. Under no
circumstances, however, may a participant in the course of his/her duties, at
the request of program staff, or in any manner that would associate the
activities with the Corporation or the national service program engage in any
effort to influence legislation, as prohibited under § 501(c) of the Internal
Revenue Code of 1986 (26 U.S.C. 501(c)), or provide a direct benefit to any
nonprofit that fails to comply with the restrictions contained in § 501(c) of the
IRS Code.
Are programs sponsored by local governments that have the potential for
replication eligible to apply directly to the Corporation?
In general, no. Replicability is one criterion by which all programs will be
evaluated, and replicable programs cannot necessarily apply directly to the
Corporation. Therefore, local programs sponsored or operated by local
government generally should apply to the State; however, a local
government may submit directly to the Corporation a proposal to replicate a
local program in more than one State.
5.
SEP-29-1995 21:07
2025462483 P.01
€
ACORN
FASCIMILE COVER SHEET
FROM:
Jerry Jones
DATE: 9/29
TO:
Jenifer O'Conna
FAX #:
PHONE #:
# PAGES INCLUDING COVER:
2 page
NOTE:
Association of Community Organizations for Reform Now
National Office: 739 8th Street S.E., Washington, D.C. 20003
202-547-2500 FAX 202-546-2483
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. memo
To: Jennifer O'Connor; From: Jerry Jones; Re: Meeting on October 3;
09/29/1995
b(6)
PII [partial] (1 page)
COLLECTION:
Clinton Presidential Records
Cabinet Affairs
O'Connor, Jennifer
OA/Box Number: 7308
FOLDER TITLE:
ACORN [Association of Community Organizations for Reform Now]
2016-0532-F
sb1150
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
SEP-29-1995 21:08
P.02
Also at 2025462483
€
ACORN
Place grup and
5541,
September 29, 1995
make
sure know
MEMORANDUM FOR: Jennifer O'Connor,
then now to
Special Assistant to the President
get in
FROM: Jerry Jones, Legislative Director
to to come
SUBJECT: Meeting on October 3
x0 this
I am looking forward to meeting with you on Tuesday, October 3 at 2 p.m.
Below are the names and birthdates of our attendees.
other
Gerald Jones, ACORN
(b)(6)
DOB:
001
(b)(6)001 001
(iii)
Deborah Austin, National Low Income Housing Coalition
DOB:
(b)(6)001
662-1530
Nan Roman, National Alliance to End Homelessness
DOB:
(b)(6)oo
638-1526
call Any
619-8055 the Lice her In tornerow much POINTS w/ to and herser any or
3
ACORN tallar Help Phane
for today
Association of Community Organizations for Reform Now
National Office: 739 8th Street S.E., Washington, D.C. 20003
202-547-2500 FAX 202-546-2483
TOTAL P.02
THE WHITE HOUSE
WASHINGTON
10 October 1995
MEMORANDUM FOR DORIS MATSUI
MOLLY BROSTRUM
FROM:
JENNIFER O'CONNOR
gno
SUBJECT:
FYI
C66I-60-130
2025452483
P.01
e
ACORN
FAXIMILE COVER SHEET
FROM: Jerm Jones
DATE: 10/9
TO:
Jenifer I'connor
FAX #:
PHONE #: Office yth of Deputy
# PAGES INCLUDING COVER:
Chinf of Staff
NOTE:
3 page
Association of Community Organizations for Reform Now
National Office: 739 8th Street S.E., Washington, D.C. 20003 202-547-2500 FAX 202-546-2483
2025462483
P.02
e
ACORN
October 9, 1995
MEMORANDUM FOR: Molly Brostrom, Jennifer O Connor, and
Doris Matsui, The White House
FROM: Jerry Jones, Legislative Director
SUBJECT: Alleged Veto Event
Here are my suggestions for a White House veto event around
VA-HUD. I realize the powers that be have not made any final
decisions on the veto message, but can't help myself in
pushing this when I think of all the ways that the people we
are trying to reach would respond to such an event.
First, we need to incorporate housing into the veto message.
We would be delighted if a VA-HUD veto event could happen.
However, we would also take a VA-HUD/Labor-HHS/Shredding the
Social Safety Net veto event. The Republicans are hitting us
by telling the people that the President's plan is too soft
on the deficit. We should respond by reminding them of how
hard their plan is on people.
Secondly, we need to talk about cities and build on the
Administration's metro areas report. If we don't make
overtures to the minority communities in the message and wait
until the campaign to reach out, they will feel slighted and
used.
OK fantasy days.
The Impossible Dream
On the stage the President is joined by an Americorps
volunteer, a working homeless family, and a family
living near a Superfund site. The event is attended by
one hundred invited guests from the housing, homeless,
student aid, volunteer, and environmental communities,
all central parts of the President's base.
Association of Community Organizations for Reform Now
National Office: 739 8th Street S.E., Washington, D.C. 20003
202-547-2500 FAX 202-546-2483
2025462483
P.03
2
Henry Cisneros introduces the homeless family, who say
they could move out of the shelter and into independent
living if the Republicans hadn't eliminated rental
vouchers.
Carol Browner introduces the Superfund family, who
describe how they must now wait longer for their
neighborhood hazardous waste site to be cleaned up.
Harris Wofford introduces an Americorps volunteer who
describes how she is paying off her college loans while
serving her community.
The President then gives a speech outlining the most
outrageous deficiencies of the Republican bill. He
vetoes it as the crowd spontaneously erupts into a
standing ovation.
Not a Bad Day Option
The President invites representatives from across the
human needs, education and environmental communities to
attend a White House budget veto ceremony.
The President cites housing cuts as a central reason for
his VA-HUD veto.
VA-HUD is vetoed along with four or five other
appropriations bills.
If We Can't Get the President But Still Have the White House
Day
Henry Cisneros gives a briefing with housing and
homeless groups at the White House on the day of the
VA-HUD veto.
Leon Panetta and/or Alice Rivlin swing by make brief
remarks.
Thanks for listening.
TOTAL P.03
Zach Polett
501-376-3952
08/21/95
9821 AM
2/2
ACORN
file
523 W 15th Street
Little Rock, Arkansas 72202
(501) 376-7151 phone (501) 376-3952 fax
AcoRning
MEMORANDUM
8/19/95
To:
Jennifer O'Connor
From:
Zach Polett
RE:
Acorn Housing Corporation (AHC) and AmeriCorps
To quote radio commentator Paul Harvey, and now
for the rest of the story."
Attached for your information is a copy of Acorn Housing
Corporation's response to the charges brought by the
AmeriCorps inspector-general.
As I think you'll see as you review the response, there
is certainly another side to this story.
Thank you for your review of this matter.
THE WHITE HOUSE
WASHINGTON
28 September 1995
MEMORANDUM FOR KEVIN THURM
FROM:
JENNIFER O'CONNOR
SUBJECT:
ACORN
The attached memorandum concerns investigations ACORN has done in
Maryland regarding voter registration efforts of those applying
for public assistance. ACORN believes that Maryland and other
states are not complying with federal law. Could you please get
this to the appropriate place? Thank you.
AUG-01-1995 15:22
2025462483 P.01
ACORN
739 8th St, SE Washington, DC 20003
ph: 202-547-2500 fax: 202-546-2483
e-mail: [email protected]
FACSIMILE TRANSMISSION
If any part of this transmission is unclear, please call.
August 1, 1995
TO: Jennifer O'Connor, Special Assistant to the President, White House
FR:
Doug Hess, NVRA Project Director, ACORN
RE:
Monitoring NVRA Performance in States
pages to follow: 1
ACORN, working closely with several other national organizations, is investigating
the performance of voter registration programs in states' public assistance agencies.
These agencies are mandated to offer voter registration to a low-income population
with 50% or greater unregistered (see June data from Census).
By looking at data from the Secretaries of State (or other Chief Election Officials), we
have determined that many states are simply not complying with the requirement
to offer voter registration in social service offices. We have also begun collecting
data by site visits.
In Maryland, for instance, the state reported numbers that placed it at the bottom of
the nation in agency based registration. Furthermore, staff and ACORN members
visited 6 sites in two counties and Baltimore City. We have found that the majority
of applicants were not shown the proper forms to determine if they wished to
register to vote. At least one agency employee in Prince George's county openly
admitted that they had not had the appropriate forms for weeks.
Maryland ACORN will issue a report soon on this matter and ACORN chapters in
other states are gearing up to do similar research (especially where we predict states
will not be complying well with court orders to implement the NVRA). I would
give you some data and charts on Maryland, but we are still waiting for clarification
from Maryland officials on some of the numbers. Suffice it to say that of the tens of
thousands of people on applying for Food Stamps in Maryland--the most basic form
of public aid--only a tiny fraction of the 50% which are likely unregistered have been
even properly offered voter registration. In short, only a few hundred people are
being registered each month in social service agencies in Maryland, while other
states' performances indicate that several thousand should be registered each
month.
AUG-01-1995 15:22
2025462483 P.02
Please call me if there are particular data you need on state performance regarding
the registration of low-income and minority voters. Otherwise, we will send you
the report when it comes out. However, if there is any way you can be of assistance
before then, we would certainly welcome you comments, aid, etc. Each day that the
NVRA program fails we are losing several hundred new minority and low-income
voters in each state.
CC: Zach Polett
TOTAL P.02
Jax
690-7755 690
you
DONE
Zach Polett
501-376-3952
008/1/95
10:34 AM
1/2
FAX TRANSMITTAL
ACORN
523 W 15th St
Little Rock, AR 72202
(501) 376-7151
(501) 376-3952 (FAX)
TOTAL # OF PAGES (INCLUDING THIS SHEET) 1
DATE: 8/1/95
TO:
Jennifer O'Connor (202-456-2464)
Special Assistant to the President
FROM:
Zach Polett
Director of Political Operations
RE:
Follow Up with Problems on Motor Voter
Implementation
It was good getting the chance to visit with you last week about
voter registration, mobilizing the urban base, and the work in these areas
of ACORN and Project Vote.
In response to your request, I've asked Doug Hess of our national
staff to send you the initial data from our monitoring of the State of
Maryland's implementation of "motor voter" at its social service agencies.
The data and survey results show that they are not running an effective
program, are not complying with the law, and therefore are missing many
of the low-income voters they should be registering.
Please share this information with Peter Edelman and the other
people you've been dealing with at HHS.
We're very interested in working with you and your office to help
encourage both HHS and relevant Governors, such as Gov. Glendenning, to
get "motor voter" fully and effectively implemented in state social
service agencies.
Please follow-up directly with Doug Hess, who directs this project
for us, at our national office in D.C. (202-547-2500).
Zach Polett
501-376-3952
8/1/95
10:34 AM
2/2
We're so glad you're paying close attention to this issue.
CC:
Doug Hess