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GOP Battle Against ACORN as Much About Financial Deregulation as Voter Registration

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Mounting evidence suggests that recent attacks leveled against the nonprofit group ACORN's voter registration work is part of a larger effort to undercut the organization's core mission to advance consumer protection and financial industry regulation.

Although ACORN has engaged in massive voter registration drives for years, the group's primary focus is low-income housing. In particular, the organization's efforts to warn low-income homeowners away from so-called predatory financial lenders and its work to increase regulation of the market for high-risk mortgage loans has placed ACORN in the sights of influential Republicans and their supporters who for decades have advocated for financial deregulation.

The connection between ACORN's efforts on behalf of low-income homeowners and recent Republican attacks on the organization's registration drives has been made by Republicans themselves.

McCain's "ACORN" Ad

On October 10, the McCain campaign released a web advertisement attempting to tie Obama to ACORN and focusing, not on voter registration errors, but on housing. It asks ominously:

What did ACORN in Chicago engage in? Bullying banks. Intimidation tactics. Disruption of business. ACORN forced banks to issue risky home loans. The same types of loans that caused the financial crisis we're in today. No wonder Obama's campaign is trying to distance him from the group.

Conservatives Talking Point: Minority Homeowners Caused Mortgage Crisis

Like the McCain campaign, conservative politicians, writers and commentators are advancing the same main argument, attributing the mortgage meltdown not to the deregulation of the financial industry that allowed mortgages to be bundled as securities with no attention to underwriting standards, but to lower-income and specifically minority home buyers of the kind represented by ACORN and protected by the pro-minority Carter-era Community Reinvestment Act.

For example, in a fractious panel interview with Larry King, Minnesota Congresswoman Michele Bachman, acting as a surrogate for the McCain campaign, argued that anti-"redlining" legislation -- laws barring realtors and mortgage lenders from refusing to make loans in racial-minority neighborhoods -- caused the crisis:

[Democratic Florida Congresswoman Debbie Wasserman] SCHULTZ: Nancy Pelosi has led us to pass the most important housing package in American industry and is directing us to ensure we can turn the housing crisis around, which John McCain and the Republican leadership doesn't even think is an issue. My state has the highest foreclosure rates in the country. We lost 84,000 jobs in this country last month, and we have the worst job situation since 1992. *** And we are headed towards a huge recession. John McCain thinks that's fundamentally sound? Out of touch.

(CROSSTALK)

BACHMANN: Larry, I'd like to have a chance to respond.

KING: Go ahead.

BACHMANN: Larry, thanks so much. If you look at the housing crisis, government has to take its share of the blame. After all, government was goading these mortgage lenders, saying you're red lining. You're being discriminatory. If you don't give loans out to marginally credit worthy people, we're going to come after you. In fact, Chairman Barney Frank has made comments like that as well. The Democrat-controlled Congress wants to have these mortgage lenders make loans to people with marginal credit. *** And now the American people have to come in and step in and pay for these bad loans when people have zero equity or negative equity.

Studies have shown, however, that the loans the McCain ad, Congresswoman Bachmann, and the other conservative politicians and pundits are talking about are not implicated in the current foreclosure crisis. In fact, 80% of subprime loans were made by institutions that weren't covered by the Community Reinvestment Act, and CRA-covered loans have a relatively low foreclosure rate.

Given the actual statistics, it's reasonable to ask whether the attacks on minority homeowners and on the legislation and community groups protecting them are sincere, or just a two-birds-with-one-stone way to advance a deregulation agenda while disenfranchising a Democratic-leaning portion of the electorate.

ACORN's Fight Against Subprime Lenders and Predictions of a Foreclosure Crisis

The fact is, some of ACORN's most successful campaigns have been directed against the financial deregulation, subprime loans, and predatory lending practices.

Among other things, ACORN has picketed predatory lenders' offices in low-income neighborhoods (sometimes wearing shark suits to underscore their opposition to "loansharks"); successfully sued lender Household Finance, forcing it to change deceptive lending practices; advocated for anti-predatory-lending legislation in 20 states; and even led a protest march to the headquarters of the Federal Reserve, ultimately persuading the Fed to tighten regulations on lenders.

Indeed, given all of the negative publicity the group has received lately, ACORN representatives have felt the need to underline their core mission and the battle ACORN has long fought against the financial industry and its political lobbyists and representatives. The group issued a report yesterday and held a conference call with reporters. On that call, ACORN Financial Justice Center Director Austin King described the work ACORN has done to try and prevent the current foreclosure crisis and financial collapse. He also described the roles played by John McCain and his chief financial advisor (and possible future Treasury Secretary), deregulation advocate Phil Gramm, in bringing the crisis about:

The "Consumer Rights League"

Another clue into the true motives -- and political clout -- behind the anti-ACORN attacks came on September 24, during a joint hearing of two House subcommittees convened by Michigan Congressman John Conyers to investigate the readiness of elections officials to deal with the various challenges leading up to the election. The hearing was prompted largely by reports that the Michigan Republican Party intended to use lists of foreclosed homes as the basis for challenging voters' eligibility to vote, a variation on the practice called "caging" in which one party's poll watchers use real or imagined evidence that a voter may not actually live at their stated address to inconvenience or disqualify the other party's probable voters. However, the hearing covered much more than vote caging; witnesses included the President of the National Association of Secretaries of State, other state and local elections officials, the head of the Justice Department division in charge of voter rights, and other experts on election law and process.

Among these professionals, one witness stood out: James Terry, who, according to a source inside the committee, was added to the panel at the request of the Republican minority and who testified about the numerous frauds that ACORN is supposedly perpetrating on the electorate.

But while he testified about supposed voter fraud, Terry has no apparent academic or professional credentials in the area of election law or process. Rather, he's the Chief Public Advocate for an organization called the Consumer Rights League, which is funded by payday lenders and other bottom-rung financial services providers and which fights for the "right" of consumers to borrow money at usurious interest rates free from the interference of meddlesome government regulation. In other words, Terry is a flack for precisely the people who created the subprime mortgage crisis and the meltdown on Wall Street.

The Consumer Rights League's prime nemesis? ACORN.

On Thursday, I asked ACORN's Executive Director, Steve Kest, about the Consumer Rights League. Kest had strong words for the organization, calling it "shadowy" and "a front group for payday and predatory lenders":

Florida Congressman Feeney: Deregulator Hero, ACORN Opponent

Another Republican legislator with ties to the Consumer Rights League is ethics-embattled Florida Congressman Tom Feeney (R-Oviedo), whose populist-sounding floor speech opposing the financial rescue package purports to sympathize with borrowers duped by unscrupulous lenders is nevertheless featured today on the website of the group advocating for such lenders. Feeney, like the Consumer Rights League, fought against legislation to regulate predatory lending and, not coincidentally, also is a leader in the effort to brand ACORN's voter registration efforts fraudulent. According to an article in the St. Petersburg (Fla.) Times that was circulated to reporters by the RNC press office, Feeney is one of several representatives who have asked U.S. Attorney General Michael Mukasey to investigate ACORN and also "has written to supervisor of elections offices in Central Florida seeking 'all ACORN-related registration of voters within the last two years.'" Not coincidentally, the newly-registered voters encompassed by that request predominantly lean Democratic. On Thursday's conference call, I asked ACORN's chief organizer in Florida, Brian Kettenring, for his take on Feeney's request. Kettenring suggested Feeney, who is in a close reelection battle, may be planning to challenge the votes of citizens who were registered by ACORN, either before or after the election:

(My call to Congressman Feeney's press office asking for his explanation of his request was not returned.)

The Karl Rove Connection

Even Karl Rove, the architect of Bush's electoral victories (aided by questionable election practices that make the accusations against ACORN pale), makes at least an indirect connection between the effort to deregulate the mortgage industry and the effort to discredit, or even indict, ACORN. In a Wall Street Journal Op-Ed on October 9, Rove pooh-poohed claims that deregulation played any role in the mortgage crisis. That's the same Karl Rove who, according to a Department of Justice Inspector General's report issued earlier this month, appeared to play a role in the firing of former U.S. Attorney for New Mexico David Iglesias. The same independent report concluded that Iglesias was fired, under political pressure from top-ranking Republicans, for refusing to indict ACORN or its employees for voter fraud, even though his thorough investigation had yielded no evidence of prosecutable crimes. Two other U.S. Attorneys were also fired for failing to aggressively prosecute alleged voter fraud. The remaining U.S. Attorneys and their replacements -- who presumably were more compliant with political demands by Rove and others -- retained their jobs, and now are moving aggressively against ACORN. A joint task force including the U.S. Attorney for Nevada (appointed by Bush after his predecessor was fired during the purge) and the F.B.I. has raided ACORN's Las Vegas office, seizing files and computers needed for Get Out The Vote efforts, and today news has leaked of a larger F.B.I. investigation into ACORN's activities -- a leak that has been condemned by Congressman Conyers, who in a press release issued just Thursday evening called it " troubling in light of the proven wrongdoing at the Justice Department in the United States Attorneys scandal."

News Analysis

All of the above suggests that the antagonism between the RNC and McCain campaign, on the one hand, and ACORN, on the other, does not stem fundamentally from ACORN's voter registration effort this year. True, that registration drive is worrisome to Republicans, because its focus on young, elderly, minority, and low-income voters is likely to bring more votes to Democrats than to Republicans. The root of the conflict, however, is both older and deeper. ACORN is dangerous to Republicans not just because it is registering new voters, but more fundamentally because its persistent warnings about the danger that Monopoly-without-rules posed to the entire financial system have proved to be correct, with ripple effects that are jeopardizing both the electoral hopes of many Republicans and the neoconservative movement to further deregulate the financial industry. The pushback from both politicians and from advocates of deregulation -- and, possibly, from some unprofessional Republican appointees in the U.S. Attorney's office and F.B.I. -- is a predictable but unethical and even illegal response to both those threats.

Some of ACORN's 13,000 voter-registration employees have, in fact, falsified voter registration forms this year, not to steal an election but merely to cheat their employer. ACORN itself has reported most of those employees to law enforcement officials, flagging questionable registration forms and urging prosecutors, usually without success, to prosecute the offenders much like WalMart urges the prosecution of its employees who shoplift. But that problem is a minor and manageable one, not representative of ACORN's overall voter registration program -- and everyone who's studied the issue closely, even including Florida's Republican governor, knows that claims of voter fraud are being overblown. The Republican Party's commercials, 50-plus press releases and dozen-plus conference calls over the last month attacking ACORN -- not to mention its costumed squirrels -- have much more to do with subprime lenders' fight to retain access to the corridors of power than they do with legitimate fears that Mickey Mouse might cast a vote for Obama on Election Day.