Obama administration, GAO appear to have ignored group’s ACORN affiliation to award $700K

Matthew Boyle Investigative Reporter
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A newly released internal audit appears to indicate that the Government Accountability Office and President Barack Obama’s Department of Housing and Urban Development incorrectly argued that a specific organization wasn’t ACORN-affiliated.

HUD’s office of general counsel and the GAO have both claimed that Affordable Housing Centers of America, or AHCOA, is not affiliated with the Association of Community Organizations for Reform Now, or ACORN. AHCOA formerly called itself ACORN Housing, but changed its name after the 2009 ACORN meltdown.

The Obama administration has awarded more than $700,000 in taxpayer funds to AHCOA despite a 2010 law stipulating that no taxpayer funds could be awarded to ACORN “or any of its affiliates, subsidiaries, or allied organizations.”

The previously confidential internal audit report, from NeighborWorks America, shows that contrary to what the GAO and the Obama administration contend, AHCOA is far too close to ACORN to receive taxpayer funding. In fact, NeighborWorks America — a nonprofit group that doles out taxpayer funds — decided against sending cash to AHCOA because of the internal audit report it conducted.

“Although AHC and ACORN might be incorporated as separate entities in form and structure, the financial transactions noted below evidence extensive relationships between both organizations that may undermine claims of an ‘arm’s length relationship’ between them,” the NeighborWorks America auditors wrote.

Even so, the GAO issued a September 2010 letter giving the Obama administration cover to legally provide AHCOA with taxpayer cash.

That GAO opinion became official policy at the end of September 2011 because no members of Congress challenged it. The GAO then reaffirmed its opinion that AHCOA isn’t ACORN-affiliated in a June 2011 report, in which it cites the previously confidential internal audit report.

That means the GAO was well aware of this NeighborWorks America internal audit report while it was finalizing its ruling that will now allow what appears to be a former ACORN affiliate to continue receiving taxpayer funding through a loophole.

NeighborWorks America has subsequently decided it will not be providing funding to AHCOA.

According to June 2011 emails The Daily Caller has obtained, NeighborWorks America representatives informed Congress this past summer that even though the Obama administration and GAO said it’s okay to fund AHCOA, because of that internal audit report, the organization would not be giving money to AHCOA. That’s because NeighborWorks America didn’t want to break the law.

NeighborWorks America isn’t a government agency, but it acts like one in how it disburses taxpayer funds. NeighborWorks America’s board of directors includes several members of the Obama administration, too, and though it’s a 501(c)3 nonprofit organization, Congress created it.

One of the board members, Raphael Bostic, is Obama’s assistant secretary of policy development and research at HUD. Because he’s on NeighborWorks’ board while he serves in the administration, Bostic likely had access to the aforementioned internal audit report, and could’ve provided it to Obama’s senior officials at HUD. It’s unclear what level of influence Bostic has in HUD’s office of general counsel and it’s unclear whether he discussed the internal audit with his superiors at Obama’s HUD.

Investigative organization Cause of Action forced NeighborWorks America to finally release the internal audit report in late November 2011. But, since its release came after the one-year deadline that hit at the end of September 2011, the GAO ruling stands indefinitely.

Cause of Action executive director Daniel Epstein told TheDC that he’s worried about political motivations behind NeighborWorks America’s board members keeping the internal audit report confidential until after the GAO ruling was finalized.

Epstein said Obama administration officials sympathetic to ACORN’s cause, who sit on the NeighborWorks America board, might have intentionally withheld the report from the public until AHCOA was cleared and legally allowed to receive taxpayer funding despite its close ties to ACORN.

Epstein had requested the report be made public before the GAO deadline, something that NeighborWorks America officials failed to do. Epstein is suspicious that some kind of malfeasance took place within NeighborWorks America and has filed a Freedom of Information Act request with the organization to find any and all internal communications regarding its release of the report.

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