ACORN Starts To Feel Funding Freeze

ROBERT SIEGEL, host:

Earlier this week in Louisiana, the head of the state chapter of ACORN was fired. That's after local ACORN leaders criticized President Obama, saying that he was not making a long enough visit to New Orleans.

This is just one of many troubles for the community group across the country. Federal funding for ACORN was stopped, at least temporarily, after videotapes showed ACORN workers telling a couple posing as a pimp and prostitute how to evade the law. Lawmakers say they want to make that cutoff permanent.

But as NPR's Pam Fessler reports, some fear that worthwhile programs could be lost.

PAM FESSLER: The picture you get at the ACORN housing office in north Philadelphia is a lot different than the one presented by ACORN's critics, or the one seen in undercover videos made by a conservative activist, where ACORN workers dished out some very sketchy advice. What you see here instead are several young women with yellow case files piled high on their desks trying to help poor people save their homes.

Ms. LIANNA CROSBY (Housing Counselor, ACORN): If you can get proof that you're receiving public assistance at the time.

Mr. SHAWN DRAYTON: Okay, great.

FESSLER: Housing counselor Lianna Crosby talks with client Shawn Drayton about an upcoming mediation session at the city court. He's trying not to lose his grandfather's house to a bad mortgage deal. But Crosby says there's been a last-minute change.

Ms. CROSBY: The legal referral, because of everything that's going on, they put a freeze on our funding. But I have clients who were referred to another attorney, so I'm going to give you his number.

Mr. DRAYTON: Okay. Great.

FESSLER: That's because Congress has blocked, at least until the end of this month, a lot of the money ACORN Housing relies upon to do its work. The housing group, an ACORN spinoff, is a major recipient of grants from the Department of Housing and Urban Development. It also received almost $24 million over the past two years for a foreclosure-mitigation counseling program created by Congress.

Bruce Dorpalen oversees counseling at ACORN Housing's offices around the country.

Mr. BRUCE DORPALEN (National Director of Housing Counseling, ACORN): We have a little bit of resources to keep going, but if this can't get resolved in a different(ph) way, we would have to lay off the staff, not be able to serve clients.

FESSLER: Clients such as Fred Butler, a retiree who came here for some of the free help. He admits he made a big mistake when he got a new mortgage on his Philadelphia home.

Mr. FRED BUTLER: I had a (unintelligible) on it. Well, it ballooned. After so many months it would go up. I just couldn't afford it and it was just too much.

FESSLER: But when he tried to pull out of the deal during a three-day grace period, his mortgage broker was nowhere to be found. ACORN Housing has worked with the lender to negotiate a more palatable deal that will keep Butler in his home.

ACORN's critics say the organization has misused federal funds and have called for multiple investigations. But neither HUD nor NeighborWorks America, a nonprofit that administers the foreclosure counseling grants, have reported any problems with ACORN Housing.

Ken Wade is CEO of NeighborWorks America.

Mr. KEN WADE (CEO, NeighborWorks America): They've been one of the highest-performing organizations, so, in that regard we've not had any concerns about their performance under this program. But like everyone else, we were concerned with the, you know, the videos we saw on television.

FESSLER: So he says NeighborWorks is reviewing its contract with ACORN Housing to make sure none of the terms has been violated. Wade adds that if the funding cuts become permanent, it will be a challenge finding other groups to take over the thousands of foreclosure cases being handled by ACORN Housing.

National ACORN officials admit their group has made mistakes, including concealing, until recently, an embezzlement scheme by the founder's brother. And they say they're fixing the problems. But it could be too little too late, which is especially troubling for those who work in the Philadelphia office, because they are the ones who actually got suspicious when a couple showed up here last July asking strange questions.

Ms. KATHERINE CONWAY-RUSSELL: They said something about bringing girls from El Salvador into the country to live in the house with them, and if I knew anything about getting them papers.

FESSLER: Office manager Katherine Conway-Russell says she didn't know she was being videotaped. She told the couple that ACORN couldn't help them. And after they left, workers here called police. But when videos taken at other ACORN offices became public last month, Conway-Russell says her office started getting crank calls - people asking if they could get help opening a brothel and even threatening to kill one of the counselors.

Ms. CONWAY-RUSSELL: It's saddening to know…

(Soundbite of crying)

FESSLER: Conway-Russell can't help herself. She starts to cry.

Ms. CONWAY-RUSSELL: To know that our staff works so hard to help people. And I feel like this is just an attack. It has nothing to do with what we do for the communities that we serve.

FESSLER: So, for now, she says she and the other workers here will just keep doing their jobs and try not to worry too much about what comes next.

Pam Fessler, NPR News. Transcript provided by NPR, Copyright National Public Radio.