Agencies can honor existing ACORN contracts

The Justice Department has instructed federal agencies to honor contracts with ACORN that were signed before Congress banned the community advocacy organization from receiving any further government funding earlier this year.

In an opinion issued in late October and released on Friday, the Justice Department's Office of Legal Counsel determined that lawmakers were unclear on whether agencies should terminate pre-existing contracts with ACORN, which stands for Association of Community Organizations for Reform Now.

In September, Congress passed a spending bill that includes a provision banning any new federal funds from going to ACORN. President Obama signed the bill on Oct. 1. ACORN responded by filing a lawsuit with the U.S. District Court for the Eastern District of New York in early November, arguing the provision is an unconstitutional "bill of attainder" that singles out one organization for punishment.

The fiscal 2010 Continuing Appropriations Resolution states, "None of the funds made available by this joint resolution or any prior act may be provided to [ACORN], or any of its affiliates, subsidiaries or allied organizations."

But the deputy general counsel for the Housing and Urban Development Department -- which has provided the bulk of the $53 million in grants and contracts the group has received since 1994 -- raised concerns about whether the bill applied retroactively.

In a five-page memorandum, David Barron, acting assistant attorney general for the Justice Department's Office of Legal Counsel, noted that lawmakers were not clear about whether the prohibition authorizes HUD "to refuse payments on binding contractual obligations" that predate the legislation.

Barron wrote that the discrepancy stems from the word "provided" which, unlike well-established terms in appropriations law such as "obligate" and "expend," can be interpreted in several ways. The attorney cited several dictionary definitions for "provide," including "to supply," "make available" and "to prepare."

Noting the perceived ambiguity in the wording, Barron said the legislation "does not direct or authorize the Department of Housing and Urban Development to breach a pre-existing binding contractual obligation to make payments to the Association of Community Organizations for Reform Now or its affiliates, subsidiaries or allied organizations where doing so would give rise to contractual liability."

Republican lawmakers said the decision smacked of "old-fashioned cronyism."

"The bipartisan intent of Congress was clear -- no more federal dollars should flow to ACORN," said Rep. Darrell Issa, R-Calif., ranking member of the House Oversight and Government Reform Committee. "It is telling that this administration continues to look for every excuse possible to circumvent the intent of Congress."

Issa's office has asked HUD to provide information about how much money it owes ACORN in outstanding grants and contracts.

The Justice Department's decision appears to run counter to an Oct. 7 memorandum to federal agencies by Office of Management and Budget Director Peter R. Orszag, which told agencies with existing contracts or grants with ACORN or its affiliates to, where permissible, "immediately suspend performance of any obligations under the contract or agreement, including payment of federal funds."

Orszag urged officials with concerns about the legal consequences of such a decision to "consult promptly with the agency's general counsel" and, if necessary, OMB and Justice.

An OMB spokesman did not respond to a request for comment on the Justice Department memo.

ACORN is a community advocacy group that provides housing and financial services to low- and middle-income families, and is involved in voter registration drives and ballot initiatives to raise the minimum wage. The group came under fresh scrutiny this year when a pair of conservative activists, posing as a pimp and prostitute, used a hidden camera to tape their conversations with ACORN employees in several cities. The tapes showed ACORN workers advising the couple on how to hide their income to avoid paying taxes. The group has fired the employees implicated on the videos.

On Tuesday afternoon, Issa and Rep. Lamar Smith, R-Texas, the ranking member of the House Judiciary Committee, will hold a forum on ACORN's activities. Among those scheduled to testify are Gregory Hall, a former ACORN organizer; Indiana Secretary of State Todd Rokita; David Caldwell, deputy director of the criminal division of the Louisiana Department of Justice; and Hans von Spakovsky, a Justice Department counsel to the assistant attorney general for civil rights under President George W. Bush.