Organized Crime

Several years ago the Association of Community Organizations for Reform Now (ACORN), the left-wing activist group that Barack Obama was employed by after leaving law school, was in the news after one of its “tax counselors” was videotaped giving advice on tax evasion to two people posing as a pimp and a prostitute. The imposters told the “counselor” that they wanted a government-subsidized loan to open a brothel where they would house dozens of teenage girls they would bring into the country illegally from Central America. On the videotape the “counselors” happily advised them on how to go about applying for the government loan without the legal authorities finding out about what they were really up to.

As sleazy as this story was, it pales by comparison to ACORN’s primary function over the past thirty years to so. ACORN has been a major player in what can be described as a legalized extortion racket administered by the Federal Reserve Board, the Comptroller of the Currency, and other government agencies. The racket started with President Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which empowered “community groups” like ACORN to effectively extort billions of dollars from banks. Such groups are empowered by the CRA to “protest” proposed bank expansions or mergers. They file a protest with the Fed, while demanding that the bank that is proposing to merger or expand give it—ACORN—millions of dollars, to supposedly be lent by ACORN to sub-prime borrowers. ACORN always keeps a hefty portion of the money for its own salaries and expenses, of course. WaMu Bank, which went bankrupt, once boasted of having made $375 billion in CRA loans, and the Fed gave Countrywide Bank an award after it made $600 billion in such loans before it, too, went bankrupt during the sub-prime mortgage meltdown of 2008–09.

Much of the money that ACORN and other similar, left-wing “community groups” receive from banks is used for political activities such as the mass registration of Democratic Party voters; supporting left-wing political candidates at all levels of government (the farther to the left, the better); organizing rallies, protests, and lobbying efforts for various planks of its “People’s Platform,” etc. The ACORN “People’s Platform” once promised, “We will continue our fight until the American way is just one way, until we have shared the wealth. . . .” Socialism, in other words.

The CRA itself is based on a falsehood—that banks will systematically walk away from billions of dollars in profits that are just waiting to be picked up by someone in low-income and minority neighborhoods. Bankers are supposedly so blinded by prejudice that they must be forced by government to make these billions in profits that are waiting for them in the sub-prime mortgage market.

The reality is that the Fed forces mortgage lenders under the CRA to make billions of dollars in bad loans to unqualified borrowers. When Forbes magazine columnists Peter Brimelow and Leslie Spence interrogated Boston Fed official Alicia Munnell about the Fed’s claims of systemic lending discrimination in the early 1990s, Munnell was forced to admit that she had no evidence of it. She and other Fed officials (and the Clinton administration) continued to increase CRA enforcement anyway. This suggests that the goal of the CRA has always been a forced redistribution of wealth, not fighting racial discrimination. Charges of discrimination are simply used as a ruse to intimidate any un-cooperating mortgage lenders.