U.S. News

ACORN to formally disband

CHICAGO (Reuters) - The liberal U.S. grass-roots group ACORN will formally disband on April 1 due to falling revenues, as its state chapters reorganize, the group said on Monday.

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

Most of the 20 chapters of the Association of Community Organizations for Reform Now, which endorsed President Barack Obama during his 2008 campaign, have disbanded on their own and reorganized under new names, a source within the group said.

Funding dried up after a widely disseminated YouTube video last September that showed ACORN workers giving advice on how to flout the law to two conservative activists who posed as a pimp and a prostitute. A separate embezzlement scandal also damaged the group’s credibility.

Republicans have long accused the group of fraud in registering voters and improperly mixing political and nonpolitical activities. ACORN has denied the allegations.

In the wake of the scandal, the U.S. Congress voted to prohibit ACORN from receiving federal funding, and the U.S. Census Bureau ended its partnership with the group.

A federal judge later ruled the funding prohibition invalid, but the damage was done.

ACORN’s board on Sunday formally closed the remaining affiliates to secure their remaining assets and pay off debts, the source said.

“ACORN has faced a series of well-orchestrated, relentless, well-funded right wing attacks,” the group said in a statement announcing the moves.

A smaller, five-member board was created to determine the corporation’s future, which may include filing for bankruptcy, the ACORN source said.

Newly formed, unaffiliated organizations have taken up some of the same work -- such as providing housing assistance to the poor -- with many of the same people and the same private funding sources, the source said.

Reporting by Andrew Stern; Editing by Peter Cooney