U.S. Senate denies funds for poverty group

WASHINGTON Mon Sep 14, 2009 7:45pm EDT

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WASHINGTON (Reuters) - A poverty-rights group that has drawn the ire of conservatives suffered another setback in Washington on Monday when the U.S. Senate voted overwhelmingly to deny it access to federal housing funds.

The Association of Community Organizations for Reform Now, which helps poor people fight foreclosures and fix tax problems, has received more than $53 million in U.S. funds since 1994, but conservatives' charges of widespread fraud have begun to impact its reputation in the capital.

Last week, the U.S. Census Bureau told the group it did not want its help boosting participation in next year's census.

The Senate measure, which passed 83 to 7 in the Democratic-led chamber, was included in a must-pass spending bill that funds housing and transportation programs for the fiscal year that starts October 1.

"This is an opportunity for the United States Senate to stand up and say 'Enough is enough' just as the Census Bureau did," said Republican Senator Mike Johanns, the measure's sponsor.

The bill includes $165 million for housing-counseling programs and $4 billion to help poor communities weather the worst recession since the 1930s.

ACORN said the Senate's action was disappointing but would have little impact on its overall operations.

"The only real victims of today's vote are the families who have benefited from ACORN's important work," ACORN chief Bertha Lewis said in a statement posted on the group's website.

The House of Representatives passed a similar spending bill without restrictions on ACORN. The House and Senate must resolved differences before a final measure can be sent to Obama to sign into law.

Republicans say ACORN engaged in widespread fraud during the 2008 presidential campaign when it launched a massive voter-registration drive in minority communities, which typically support Democrats and ended up voting overwhelmingly for President Barack Obama.

ACORN says less than 2 percent of its 1.3 million voter applications were fraudulent, stemming from canvassers who sought to boost the number of forms they turned in. Independent analysts say any actual impact on the election was negligible.

The group has also suffered an embezzlement scandal involving the founder's brother.

ACORN more recently has been embarrassed by conservative activists who secretly taped employees in several cities giving tax advice to a couple posing as a pimp and prostitute.

The group has fired several of those taped while denouncing the actions as a smear campaign.

(Editing by Philip Barbara)

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