U.S. House denies funds to scandal-hit ACORN

Demonstrators from ACORN's Home Defenders rally outside the foreclosed home of Marie Elie in Elmont, New York, April 9, 2009.

WASHINGTON (Reuters) - The U.S. House of Representatives on Thursday voted to cut off federal money to ACORN, a scandal-hit liberal grassroots group which has long angered conservatives.

Republicans accuse the Association of Community Organizations for Reform Now of fraud in registering voters and improperly mixing political and nonpolitical activities. They say it has received $53 million in federal money since 1994.

But Democrats have also criticized ACORN in recent days after conservative activists secretly filmed employees in several cities giving tax and housing advice to a couple posing as a pimp and a prostitute.

ACORN, which has also suffered an embezzlement scandal involving the founder's brother, says it fired those in the video and would investigate their actions -- but that has not stopped the criticism.

"We have to have our own scrutiny of an organization with an allegation of this kind against it," House Speaker Nancy Pelosi, a Democrat, told a news conference.

The White House has also condemned the video and the Census Bureau said last week it does not want ACORN's help in next year's massive population count.

Beyond its voter registration drive, the group promotes affordable housing programs for lower-income people, offers tax counseling and has aggressively fought home foreclosures.

The legislation that passed the Democratic-controlled House, sponsored by Republican Leader John Boehner, would prevent the government from providing grants, contracts or other federal money to ACORN.

The Senate must pass similar legislation before President Barack Obama can sign it into law.

"We're disappointed that the House took the rare and politically convenient step of attempting to eliminate federal funding for a single organization," ACORN chief Bertha Lewis said in a statement.

She said the move will have little impact because ACORN gets most of its money from supporters.

In the Senate, only seven Democrats opposed a measure on Monday that would deny ACORN access to federal transportation and housing funds.

The Senate is expected to vote on a separate measure later on Thursday that would bar ACORN from receiving money from another spending bill. Democrat Dianne Feinstein offered to adopt the measure unanimously but Republican Mike Johanns insisted on a recorded vote.

Republicans say ACORN engaged in widespread fraud during the 2008 presidential campaign with its voter-registration drive in minority communities, which typically support Democrats and ended up voting overwhelmingly for Obama.

Boehner said the House vote might convince ACORN to scale back its political activity.

"I think this will have a chilling effect on their election activities and frankly have a chilling effect on anyone wanting to have a relationship with them," he told a news conference.

ACORN says less than 2 percent of its 1.3 million voter applications were fraudulent and analysts say any actual impact on the election was negligible.

(Editing by Alan Elsner and John O'Callaghan)