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"And ye shall know the truth, and the truth shall make you free." - John 8:32
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Author:  Michael J. Gaynor
Bio: Michael J. Gaynor
Date:  January 27, 2009
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Federal Billions for ACORN’s Insidious Campaign to Socialize America?

The whole story of ACORN, its political machinations and its allies in both government and the media has not yet been told. The sooner it is told, the better.

Are you surprised that the so-called stimulus bill being prepared by Congress includes a multi-billion dollar bonanza for the Association of Community Organizers for Reform Now (ACORN)?

If you have been paying attention, the answer is no.

Ironically, ACORN in particular and radicals in general first caused America’s current financial crisis, then politically benefited from it by electing former community organizer and ACORN lawyer Barack Hussein Obama, Jr. as President of the United States together with a Democrat-controlled Congress and now are seeking to have the federal government fund their efforts to socialize America (as well as abortions around the world).

Such abominations are only possible in Obama Nation because the media generally has been cooperating instead of reporting the truth, the whole truth and nothing but the truth in a timely manner.

Instead of doing its job, the bulk of the mainstream media shamelessly promoted the Obama campaign, touted “change” over experience (especially military experience), excused Obama’s many very troubling associations and made a vote for the war hero and veteran legislator instead of the young man who had been an Illinois state senator four years earlier seem racist and/or reactionary instead of sensible.

Last September, in “Blame Obama’s ACORN for the Financial Crisis,” I noted that (1) 2008 Republican presidential candidate John McCain had :”warned years ago that Fannie Mae and Freddie Mac were important problems that needed to be fixed and (2) in 2007 the Democrats had taken control of Congress and blocked the reforms called for by both the Bush administration and McCain.

I explicitly warned:

”Don’t expect the mainstream media to identify ACORN and its favorite community organizer and lawyer, rookie United States Senator and current Democrat presidential nominee Barack Hussein Obama, Jr. among the villains in the current financial crisis. “But media bias does not change facts.”

I noted that critically important facts not generally known could be found online.

For example:

Pittsburgh Tribune Review, “Barack Obama’s Closet,” Dateline D.C., January 14, 2007:

“…in Chicago, the Association of Community Organizations for Reform Now (ACORN) is more important than Iraq or Washington. ACORN and its associated Midwest Academy, both founded in the 1970s, continue to train and mobilize activists throughout the country, often using them to manipulate public opinion through ‘direct action.’ It's sometimes a code for illegal activities.

“Prior to law school, Barack Obama worked as an organizer for their affiliates in New York and Chicago. He always has been an ACORN person -- meeting and working with them to advance their causes. Through his membership on the board of the Woods Fund for Chicago and his friendship with Teresa Heinz Kerry, Obama has helped ensure that they remain funded well.

“Since he graduated from law school, Obama's work with ACORN and the Midwest Academy has ranged from training and fundraising, to legal representation and promoting their work.”

I noted: “Terry Kerry’s husband John made Obama a national figure by letting him deliver the keynote address at the 2004 Democrat National Convention.”

I also noted that “the current financial crisis is a result of a reckless form of affirmative action or reparation of sorts, quoting Stan Liebowitz, professor of Economics at the University of Texas’ Business School at Dallas, explaining the genesis of the financial crisis in “The Real Scandal: How Feds Invited the Mortgage Mess,” published in The New York Post on February 5, 2008.

Professor Liebowitz:

”PERHAPS the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards - done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.

“At the crisis' core are loans that were made with virtually nonexistent underwriting standards - no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.

“Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?

“From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and ‘progressive’ political forces.

“In the 1980s, groups such as the activists at ACORN began pushing charges of ‘redlining’ - claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.

“In fact, minority mortgage applications were rejected more frequently than other applications - but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.

“Yet a ‘landmark’ 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.

“That study was tremendously flawed - a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.

“Yet the political agenda triumphed - with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.

“No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: ‘discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.’

“Some of these ‘outdated’ criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant's ability to manage debt.

“Sound crazy? You bet. Those ‘outdated’ standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.

“Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.

“Flexible lending programs expanded even though they had higher default rates than loans with traditional standards. On the Web, you can still find CRA loans available via ACORN with ‘100 percent financing . . . no credit scores . . . undocumented income . . . even if you don't report it on your tax returns.’ Credit counseling is required, of course.

“Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed ‘the most flexible underwriting criteria permitted.’ That lender's $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.

“Who was that virtuous lender? Why - Countrywide, the nation's largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy.

“In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide's chief executive bragged that, to approve minority applications that would otherwise be rejected ‘lenders have had to stretch the rules a bit.’ He's not bragging now.

“For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage caused by relaxed lending standards.

“This damage was quite predictable: ‘After the warm and fuzzy glow of 'flexible underwriting standards' has worn off, we may discover that they are nothing more than standards that lead to bad loans . . . these policies will have done a disservice to their putative beneficiaries if . . . they are dispossessed from their homes.’ I wrote that, with Ted Day, in a 1998 academic article.

“Sadly, we were spitting into the wind.

“These days, everyone claims to favor strong lending standards. What about all those self-righteous newspapers, politicians and regulators who were intent on loosening lending standards?

“As you might expect, they are now self-righteously blaming those, such as Countrywide, who did what they were told.“

Radicals had used the Community Reinvestment Act (CRA) to force toxic loans that suited their agenda.

Wikipedia on the Community Reinvestment Act (CRA):

“The CRA was passed into law by the 95th United States Congress in 1977 as a result of national grassroots pressure for affordable housing, and despite considerable opposition from the mainstream banking community. Only one banker, Ron Grzywinski from ShoreBank in Chicago, testified in favor of the act The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions. The CRA is enforced by the financial regulators (FDIC, OCC, OTS, and FRB).“The bill encouraged the Federal National Mortgage Association, commonly known as Fannie Mae, to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend to home buyers. It also encouraged the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to buy mortgages on the secondary market and sell them as mortgage-backed securities on the open market. Due to massive financial losses, on September 7, 2008 the Federal Housing Finance Agency (FHFA) put Fannie Mae and Freddie Mac under the conservatorship of the FHFA.

“Clinton Administration Changes of 1995

“In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.

“These revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.“Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

“Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.

“George W. Bush Administration Proposed Changes of 2003

“In 2003, the Bush Administration recommended what the NY Times called ‘the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.’ This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. Representative Barney Frank (D-MA) claimed of the thrifts ‘These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’ Representative Mel Watt (D-NC) added ‘I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing.’

“Changes of September 2005

“Among banks and the regulatory agencies, there was a consensus that data collection, recordkeeping, and reporting requirements imposed a heavy burden on small community institutions. As a result of a 2002 review of the CRA regulations, and revision of an initial Federal Deposit Insurance Corporation (FDIC) proposal following a public commenting period that was largely negative, the FDIC, Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB), made substantive changes to the implementation of regulations for the CRA for banks (not thrifts).

“Previously, all institutions over $250 million in assets were subject to a three-part CRA test that covered lending (including community development loans), qualified investments, and services (including community development services) to their assessment areas. Institutions less than $250 million were subject only to a lending test.

“However, as of September 1, 2005, only those institutions with more than $1 billion in assets were subject to the three-part test. Institutions below $250 million remain subject to only a lending test, and a new CRA test was created for institutions with assets between $250 million and $1 billion. This latter category, referred to as Intermediate Small Banks, is subject to the same lending test to which institutions under $250 million were subject, along with a new combined community development test that covers community development loans, qualified investments, and community development services. The $250 million and $1 billion asset thresholds also were indexed to the consumer price index and could change annually. Thus, all institutions remain subject to the CRA test. These substantive changes were intended to be a compromise between changes advocated by banks and community groups.

“However, the changes were not received positively by all community groups. Changes to tests conducted on the Intermediate Small category were viewed by some as decreasing the institutions' obligations to meet lending requirements of low- and moderate-income households. Racial inequities in mortgage acceptance rates (as reported by Inner City Press, the National Community Reinvestment Coalition, ACORN and other groups) are cited as a primary reason to maintain or even increase the scope of the CRA."

Young ACORN whistleblower Anita MonCrief (www.anitamoncrief.blogspot.com) describes herself in her profile at her blog as “a social artist” whose “works promote social change and poverty eradication.”

Since Anita actually wants poverty eradication and the persons who control ACORN benefit greatly from continued poverty, it’s not surprising that Anita and those persons parted company.

Anita recently wrote in her blog: “ACORN is a conglomeration of ‘social’ organizations whose main goal seems to be keeping minorities marginalized and poor. After 38 years of the ACORN way, I would have to say that the communities that they ‘help’ have hardly seen any of the estimated $120 million a year that the council of ACORN organizations brings in.”

A young nor the People's Republic of China ever was a socialist paradise with all citizens being equal and poverty having been eradicated.

Eradicating poverty is a noble goal, but radicals don't accomplish it.

Mother Jones is a radical magazine named after a radical.

The magazine describes the woman after whom it is named as follows: “Pioneer socialist Mary Harris ‘Mother’ Jones (1830-1930) helped found the IWW [International Workers of the World], organiozed mineworkers, supported the Mexican Revolution, and was one of the great orators of her day.”

ACORN ads in the magazine are noteworthy, especially this 1979 ad: “Community organizers needed for organizations of low- to moderate-income citizens in North Carolina and Georgia. Help build citizen power through direct action by neighborhood, city, statewide groups on housing; tax, utility issues. Low pay, long hours. Training for those dedicated to social change. Contact: Carolina Action, P.O. Box 1985, Durham, NC 27702; (919) 682-6076.”

That “low pay, long hours” policy keeps ACORN’s idealistic workers poor while ACORN's control group pursues wealth and power, legally and otherwise.

Anita:

“…ACORN as everyone is aware, has run the voter registration program for years. Where the problem comes in is that Project Vote is using its tax exempt status to directly fund ACORN. In an email dated Monday, June 04, 2007 Nathan Henderson-James, who serves as both the Project Vote Research Director and the ACORN Political Strategic Writing and Research Director demonstrated this ‘wink, wink’ approach to financial reporting.”

Anita was copied on a June 4, 2007 email from Nathan Henderson-James to David Lagstein, the subject line of which read “Dotting I’s and crossing t’s” and the text of which reads:

"Dave,

"In an effort to ensure that we are in compliance with government regs about these EAC grants and whatnot, I’m going to ask you to take the notes from February about the MI poll worker project (which I am attaching) on MI ACORN letterhead (I’d say include the part all the way down to the 'notes' section) with a cover letter saying something like 'Here’s the report of our activities for the Poll Worker Project.'

"Actually here’s some suggested language:'Please find enclosed a summary of the work undertaken by MI ACORN-Saginaw for the Young Poll Worker Recruitment Project. As you can see we met or exceeded our numeric goals for numbers of workers recruited. We consider this project a success.

'It was great to partner with Project Vote on this project and we look forward to working with you again when circumstances warrant it.

'If you have any comments or questions do not hesitate to contact me at (number) or (e-mail).

'Regards,David Lagstein Head Organizer Michigan ACORN'

"Make it out to me (address below) and e-mail me a copy.

"But also SNAIL MAIL a copy to the DC office for the paper files. Make it out to Anita MonCrief’s attention at 739 8th St. SE, Washington, DC, 20003. I’m cc’ing her on the e-mail as well.

"Thanks a lot!

"Nathan

"PS I am enclosing the two narrative reports so you can see how this worked out.

"Nathan Henderson-James

"Director, Strategic Writing and Research Department (SWORD)…

Anita explained:

“The problem that exists with this ‘partnership’ is that there is not separation between Project Vote activities and ACORN activities. In all fairness, in preparation for the intense scrutiny of the 2008 elections, the Project Vote national office in DC did build a door to separate it from ACORN National, DC ACORN and ACORN Housing who all occupy the building.”

Anita was copied on the reply too, the text of which read:

"I see – I am just sending the letter with the attached notes, not the stuff that project vote wrote.

"David Lagstein

"Head Organizer

"Michigan ACORN…."

Anita:

“It is equally disturbing that the grant in question is a government grant from the Election Assistance Commission (EAC) relating to the Help America Vote Act. With ACORN's history of partisan and aggressive activity, I wonder if they would have qualified without Project Vote's tax status. On the ACORN side Nathan helps select the states that the voter registration programs are run, usually based on partisan considerations; and on the Project Vote side, he writes the proposals and the reports to fund ACORN's political agenda.“I think its time that the IRS took a look at this cozy relationship and at their compliance with tax exempt rules and regulations. I am sure that they would be interested to know that tax letters have not gone out to ALL donors since at least 2005, they are un-cashed checks from individual donors dating back to 2004 lying in boxes in the DC office and until late 2007 there was maybe $10 million dollars worth of unaccounted income that could not be tracked.

“This house of cards has been shaky for years and hopefully it will fall before it squanders more government funds.”

Like the billions of dollars that ACORN allies in Congress are trying to deliver!

Anita:

“During my tenure at Project Vote from 2005-2008 I personally witnessed that:

• Project Vote violated its 501 (c) 3 status since its inception by using government and private grants that ultimately go directly or indirectly to ACORN for partisan purposes.

• ACORN, Project Vote and Citizen Services Inc. (CSI) are the same organization with different tax designations that are used to facilitate the transfer of money between the organizations Direct and Indirect knowledge.

• ACORN has promoted a culture of dishonesty motivated by reaching target Voter Registration goals and senior staff have portrayed an attitude that allows for some ‘bad’ cards in order to reach these goals.

• As of January 2008, Karyn Gillette, Project Vote Development Director, Jeff Robinson, and Nathan Henderson James, Project Vote Research and Political Director are all employed by CSI-Citizens Services Inc- and may have worked directly with anyone seeking the services of CSI and money paid to CSI would have obvious ACORN ties.

• Karyn Gillette provided list obtained from the Kerry, Clinton,and Obama campaigns, as well as the 2004 DNC donor lists. These lists were shared with the Political directors of roughly 12 ACORN battleground states in order to raise money for a $28 million dollar (number as of 11/2007) voter registration drive.

• ACORN and Project Vote have used CCI to transfer money between the organizations and may be guilty of violating RICO statues.

“Not only should ACORN's ‘feeder’ organization Project Vote have its tax exempt status removed but as the civil RICO complaints details, there should be intense federal investigations.

“In a memo entitled Thinking Ahead: Potential Political Operations Priorities & Projects 2007 – 2008 dated 11/22/06, Project Vote Executive Director Zach Polett stated the following goals:

• Develop strategies for using politics and our political work to support ACORN's organizing, growth, and membership representation agendas -- with particular focus on municipal and state elections

• Build a relationship with the Administration that will take office in January 2009

• Have CSI play a major field role in the general election and, possibly, in the primaries.

• Congressional District Strategy: Develop a plan, for 2007 implementation and funding, that targets organizing, communications and political work in a set of marginal CDs that changed party in the 2006 election. [Also develop list of seats in which current party holds a seat that went the opposite way in the last presidential election – these will contain a number of seats likely to be closely contested in 08.]"

Anita concluded: “Not only is it clear that 501(c)(3) money was being spent with partisan goals in mind, its seems that it was an accepted part of Project Vote strategy….”

The whole story of ACORN, its political machinations and its allies in both government and the media has not yet been told. The sooner it is told, the better.

Michael J. Gaynor

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Biography - Michael J. Gaynor

Michael J. Gaynor has been practicing law in New York since 1973. A former partner at Fulton, Duncombe & Rowe and Gaynor & Bass, he is a solo practitioner admitted to practice in New York state and federal courts and an Association of the Bar of the City of New York member.

Gaynor graduated magna cum laude, with Honors in Social Science, from Hofstra University's New College, and received his J.D. degree from St. John's Law School, where he won the American Jurisprudence Award in Evidence and served as an editor of the Law Review and the St. Thomas More Institute for Legal Research. He wrote on the Pentagon Papers case for the Review and obscenity law for The Catholic Lawyer and edited the Law Review's commentary on significant developments in New York law.

The day after graduating, Gaynor joined the Fulton firm, where he focused on litigation and corporate law. In 1997 Gaynor and Emily Bass formed Gaynor & Bass and then conducted a general legal practice, emphasizing litigation, and represented corporations, individuals and a New York City labor union. Notably, Gaynor & Bass prevailed in the Second Circuit in a seminal copyright infringement case, Tasini v. New York Times, against newspaper and magazine publishers and Lexis-Nexis. The U.S. Supreme Court affirmed, 7 to 2, holding that the copyrights of freelance writers had been infringed when their work was put online without permission or compensation.

Gaynor currently contributes regularly to www.MichNews.com, www.RenewAmerica.com, www.WebCommentary.com, www.PostChronicle.com and www.therealitycheck.org and has contributed to many other websites. He has written extensively on political and religious issues, notably the Terry Schiavo case, the Duke "no rape" case, ACORN and canon law, and appeared as a guest on television and radio. He was acknowledged in Until Proven Innocent, by Stuart Taylor and KC Johnson, and Culture of Corruption, by Michelle Malkin. He appeared on "Your World With Cavuto" to promote an eBay boycott that he initiated and "The World Over With Raymond Arroyo" (EWTN) to discuss the legal implications of the Schiavo case. On October 22, 2008, Gaynor was the first to report that The New York Times had killed an Obama/ACORN expose on which a Times reporter had been working with ACORN whistleblower Anita MonCrief.

Gaynor's email address is gaynormike@aol.com.


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