"A few ACORN members exhibited terrible judgment and highly inappropriate behavior in videotapes obtained in the investigation," Brown said in a statement. "But they didn't commit prosecutable crimes in California."
Gov. Arnold Schwarzenegger asked Brown last year to investigate ACORN after employees were seen in video segments appearing to advise a couple posing as a pimp and prostitute. ACORN staff told the couple to lie about the woman's profession to get financial help.
The hidden-camera videos created a political firestorm when they were released, and tarnished the once-mighty ACORN, which stands for Association of Community Organizations for Reform Now. The organization folded last month.
Brown, a Democrat running for governor, said the tapes were highly edited.
Rather than give advice on prostituting underage girls, human trafficking and cheating on taxes, the attorney general's office found ACORN members at times caught on to the scheme and called the police in the portions of the videos that were cut.
"Sometimes a fuller truth is found on the cutting room floor," Brown said.
To obtain the full tapes, Brown's office agreed not to prosecute conservative activists James O'Keefe and Hannah Giles, who played the pimp and prostitute in the video, even though the report found they likely violated state privacy laws.
In California, O'Keefe used hidden cameras on visits to ACORN offices in San Diego, San Bernardino and Los Angeles. State law requires both parties to give consent before a conversation is recorded.
ACORN could not be reached for comment because the group has disbanded, and phone listing for O'Keefe and Giles could not be found.
Besides not filing taxes and throwing away confidential papers, the attorney general's report found four instances of possible voter registration fraud by ACORN in San Diego accompanying the 2008 election.
Brown raised a concern that a successor group to ACORN in California is "run by the same people."
O'Keefe is now facing charges in New Orleans on a federal case involving an attempt to tamper with Sen. Mary Landrieu's office. Federal authorities initially accused O'Keefe and three others of trying to tamper with Landrieu's phones, but now say they planned to pretend to test the phone system.