This post continues the series of chapter summations of Radical-In-Chief by Stanley Kurtz. Today we cover the final portion of Chapter 6 which touches on President Clinton’s contribution to ACORN and his administrations assistance to ACORN’s drive to dramatically increase the amount of outstanding mortgages to high credit risk housing buyers.
RADICAL IN CHIEF
Chapter 6 ACORN part III
Bank Fairs were held where banks were asked to attend and interact with the communities they served. At these events the banks were asked to pledge to meet the reforms outlined by ACORN, i.e. to lower their standards set for mortgage qualification. Retribution fell upon those who declined.
In July of 1992, the delegation from Citibank left an ACORN Bank Summit Fair without agreeing to ACORN’s terms. Within days, a group was organized that disrupted Citicorp’s headquarters in NY with songs and chants. Later, in August, officers and staff from Citibank-Chicago were invited to a gathering of about 400 people from the community. They were given prestigious seating on the stage in view of everyone in attendance. And then ACORN’s banking specialist, Ernestine Whiting, took the podium and mercilessly berated the bankers sitting on the platform. According to Kurtz, the Citibank people were “shaking in anger” over the treatment to which they had been subjected. But it worked. Eventually Citibank relented and agreed to increase the amount of their sub-prime lending in accordance with ACORN’s terms.
Bill Clinton’s appointed a man named Henry Cisneros as of Secretary of Housing and Human Development. Cisneros was one of the first Hispanics to be elected mayor of a large city. He knew ACORN well and was familiar with their confrontational tactics. In his first meeting with the organization’s leaders he made it clear he had no problem with the “aggressive” tactics. In fact, unsolicited, he offered ACORN government funding. The meeting lasted an hour longer than scheduled, and that hour was devoted to exploring ways to channel money from the federal coffers to help support ACORN’s activities.
Then in July of 1994 President Clinton met personally with a delegation from ACORN. The group found a receptive audience in the President as they explained that their agenda included expanding the reach of the Community Reinvestment Act to go beyond just the banks. They wanted mortgage brokers (as lenders) and insurance companies (as investors) to meet sub-prime quotas as well. ACORN had already convinced Allstate to put $10 million into the funding of sub-prime mortgages.
The author believes ACORN leaders realized their housing activities could contribute to a financial crisis of sorts, but it is doubtful any of them anticipated the extent of the mess that actually occurred. It is unlikely the creation of a crisis was intended, but should one occur it would be seen more as an opportunity than as a failure. Leaders Peter Dreier and Frances Fox Piven taught that any financial crisis is an opportunity to condemn capitalism as a failure and proclaim socialism is the solution.