Acorn, the community organization group that has faced widespread public scrutiny for the last several years, has filed for Chapter 7 bankruptcy liquidation.
The chapter bankruptcy filing comes after the attack of politically conservative critics, and by what Crain’s New York calls “its own missteps.” Together, these events led to a loss of federal funding and donations and the group was not able to continue.
Acorn’s CEO, Bertha Lewis, released a statement about the Chapter 7 filing, saying that Acorn grew from a small neighborhood organization in Little Rock, Alabama, into a national organization that “has fought the good fight,” helping low- and moderate-income families to “make their communities a better place. In working together, we helped families see that they can make a difference.”
Lewis served as CEO starting in 2008.
Among the criticisms and outright attacks that Acorn found itself the target of starting during the presidential race of 2008 were allegations that the group had committed widespread voter fraud running up to the election.
And a few months before the election, the real media storm started when an undercover conservative activist pretending to be a prostitute and her boyfriend recorded conversations with Acorn representatives. In these recordings, it appeared, based on editing and splicing, that the Acorn representatives broke the law. The videos hit the Internet and spread to news outlets all over the country, making Acorn a political lightning rod.
The attorney general in California and the district attorney in Brooklyn have since declared that Acorn did not do anything wrong. But the damage was done, as the organization’s reputation was irreparably damaged in the public eye. As a result of the smear campaign, local and state funding from the government was withdrawn, as was support from Congress and funding groups.
Acorn also failed to overcome a scandal in which the founder of the organization attempted to cover up his brother’s embezzlement of $1 million from the group, according to Crain’s New York.
According to Lewis’ statement, “The ongoing political onslaught caused irreparable harm.” She said that the right-wing media blitz and the far right counter offense that misled the public led to overwhelming cost in defending themselves in various investigations. The collective result of these struggles resulted in the erosion of the organization, she said.
“We have seen this coming for some time,” Lewis said of the Chapter 7 bankruptcy filing. While some of their chapters closed earlier this year, they have spent their time working to dissolve the organization. She thanked Acorn supporters, and urged them to “march boldly into the future.”
The main group listed $4 million in liabilities with $1 million of that owed to the developer of the Atlantic Yards project, Forest City Ratner. Acorn owes $750,000 to the Pennsylvania Bureau of Charities, and debts to the New Jersey Department of Labor and Workforce Development, GE Capital and the New York State Workers Compensation Board.
In the Chapter 7 bankruptcy petition, Acorn listed around $115,000 in assets.
Though the broad organization is liquidating, there are organizations around the country started by former staffers that will have the same mission, in states like Pennsylvania, New Mexico, Texas and California.
One of these groups is New York Communities for Change, which is made up of former Acorn employees who work out of a former Acorn office in Brooklyn.
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