The Association of Community Organizations for Reform Now, or ACORN marks its 39th anniversary this year, but instead of celebrating longevity, it's fighting to save its reputation and revenue stream.
Now infamous undercover videos show ACORN workers counseling a couple on how to open a brothel while skirting tax laws.
The couple, played by conservative activists James O'Keefe and Hannah Giles, asks for advice on buying a house for a business that would employ underage girls illegally shipped from El Salvador to the United States.
ACORN employees also counsel O'Keefe on how to funnel prostitution money to his future political campaign.
The videos show the couple seeking and receiving advice at ACORN offices in San Bernadino, Calif.; New York City; Washington, D.C., and Philadelphia. In Baltimore they even scored a discount on their tax services to help get their business off the ground.
In New York City, an ACORN worker advised the couple to come up with another name for their prostitution business and in the nation's capital they were advised to stay "low key" about their venture.
When the couple said they had faced discrimination at banks while trying to secure a loan to purchase a house for their prostitution business, a worker in San Bernadino told the pair she understood their struggle because she used to run an escort service herself.
The woman told them they are discriminated against because there are a lot of "narrow minded, one-sided, right-wing" people out there who don't understand.
In Defense of ACORN
During a recent appearance at the National Press Club, Bertha Lewis introduced herself as the CEO of ACORN, "and most recently, some of you may know me as the head of an international brothel network."
What's not been reported, Lewis says, is that many ACORN offices either turned O'Keefe and Giles away or called the police.
"Some of the actions that you all caught on those videotapes by a worker just...It made my stomach turn over. It just made you sick. So yes, I terminated those employees," she said.
However, it's an action that made her "sad." Many of the employees had worked for ACORN for more than 15 years and were only trying to do the right thing, she says, by not passing judgment on O'Keefe and Giles for engaging in prostitution.
They're only the latest employees to find themselves in trouble. ACORN's founder's brother, Dale Rathke, is under investigation for embezzling anywhere from $1 million to $5 million from the organization and voter registration scandals have plagued ACORN for years.
After the videos became must see TV, Congress voted overwhelmingly to cut off ACORN's federal funding. It remains to be seen how big an issue this latest scandal will be in next year's mid-term elections, but expect Republicans to call out the 75 Democrats who voted to keep taxpayer dollars flowing to the group.
Lewis calls the action by Congress, "modern-day McCarthyism," an effort by Republicans to create a "boogie man" to help boost campaign contributions.
However, much of the outrage came from taxpayers whose money was going to an organization counseling a couple on how to operate an illegal industry that involved underage illegal aliens.
Rev. Pat Mahoney with the Christian Defense Coalition says, "the fact that ACORN was earmarked to get billions of dollars is an absolute disgrace."
Bad Behavior, Bad for Business
The Obama administration has dropped ACORN from helping conduct the 2010 census, and the IRS removed the group from its voluntary tax assistance program.
Dr. Gregory Squires, sociologist at George Washington University, says "this behavior is unacceptable, it's outrageous. ACORN itself found this to be the case and dismissed these folks."
Squires has studied ACORN's role within low income communities. He says ACORN and groups like it serve as important watch dogs to help prevent so called toxic housing loans that led to the economic crisis.
"I'm not saying that ACORN won't be feeling some pain from this, he says. It may well be that the money that they're able to raise for the next couple of years will be adversely affected by this. But I don't think they're going out of business."
With federal funding out the door, ACORN is now appealing to its members to donate. Lewis says as long as a member is willing to host a gathering in his or her house or a church is willing to open its doors for a meeting, ACORN will survive.
Meanwhile, the organization has sued O'Keefe and Giles for violating a Maryland law that requires a person's permission to be videotaped.
During her appearance at the National Press Club, President Donna Leinwand asked Lewis, "but don't you think what they uncovered by allegedly breaking the law actually trumps their actions?"
"Nothing trumps the law," Lewis said.
Lewis says she was already in the process of rooting out waste, fraud, and abuse in the organization, a project that will continue.
*Originally published October 28, 2009.