Tag Archives: Community Reinvestment Act

RADICAL IN CHIEF – ACORN part III

 

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.

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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.

 

RADICAL IN CHIEF – ACORN part II

 

This post continues the series of chapter summations of Radical-In-Chief by Stanley Kurtz.  Today we cover the mid portion of Chapter 6.  President Obama had a close working relationship with ACORN.  Their affiliation came naturally.  Their objectives and methods were the same, their constituency was the same and they both focused their activities in Chicago.

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RADICAL IN CHIEF
Chapter 6  ACORN part II
Obama’s alliance with ACORN arose from his choice of “asbestos” as the issue over which to organize and his selection of the Altgeld Gardens Housing Project as the place to do it. Altgeld also was the focus of the Chicago arm of ACORN. Their program was called ATU (Altgeld Tenants United).  The issues that ATU was working weren’t as productive as the asbestos issue that Obama had chosen, so ACORN’s ATU joined forces with Obama’s DCP and they worked together.  Barack Obama worked closely with ACORN from the very beginning.

Housing was the major focus of ACORN’s work from 1992 to 1995. During this period, Barack Obama was supporting ACORN with money from the two foundations on whose boards he sat. Obama also personally trained leaders for ACORN and represented ACORN in a lawsuit relating to the “Motor Voter” bill.

ACORN leaders knew that minority applicants were being turned down for mortgages due to a lack of down payment and poor credit histories.  Therefore the goal was to force banks to lower their lending standards.  The method was to level charges of racism, both explicit and implied, against banks that did not conform.  Activities included:

Filing actions against banks for failing to “meet the needs of the community” asmandated by the CRA.
Demonstrations in lobbies of banks that refused to lower their lending standards
Establishing an ACORN Housing Corp to acquire distressed properties from banks.
Selling houses to “homesteaders” with ACORN keeping title to the land.
Requiring homesteaders to attend at least 5 demonstrations against the banks.
The Chicago Tribune called the program “affirmative-action lending”.

But there was a line below which the banks could not go.  That line was the standards set at the time by Fannie Mae and Freddie Mac. These two GSEs (Government Sponsored Entities) supplied the money for the loans.  ACORN knew they would need to get their standards lowered. Charges of racism would not work here, but working through the political system might yield results.  ACORN was “informally deputized” by the Chairman of the House Banking Committee to draft affordable housing rules that became the foundation of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.  The new law imposed quotas on the GSEs that could only be met by lowering their credit standards.

Throughout the 2008 presidential campaign, candidate Obama denied having any close relationship with ACORN.  His involvements were actually quite extensive.  In 1992 he accepted an invitation from Madeline Talbott, head of the ACORN Chicago office, to train organizers for her staff.  As head of Project Vote, Obama coordinated voter registration drives with ACORN.  Speaking at an ACORN meeting in 2008, Obama said:

When I ran Project Vote, the voter registration drive in Illinois, ACORN was smack dab in the middle of it.  Once I was elected there wasn’t a campaign that ACORN worked on down in Springfield that I wasn’t right there with you.  Since I have been in the United States Senate, I’ve always been a partner with ACORN as well. I have been fighting with ACORN, along side ACORN, on the issues you care about my entire career.

Then on October 15th during the third presidential debate Obama said this:

The only involvement I’ve had with ACORN was I represented them alongside the U.S. Justice Department in making Illinois implement a Motor Voter law that helped people get registered at DMVs.

When ACORN launched the voter registration drive called Project Vote, Obama was appointed director for the state of Illinois. The members of his steering committee were ACORN’s Chicago chief Madeline Talbott, the head of SEIU Local 880 Keith Kelleher, the Rev. Jeremiah Wright, Father Michael Pfleger, Midwest Academy leader Kim Bobo and 17 lesser known individuals from the Chicago area.

The primary players in Chicago’s Project Vote, in addition to Obama who directed it, were the SEIU and ACORN, effectively one organization in Chicago. Although they had separate phone lines they shared the same headquarters, the same staff and participated jointly in demonstrations.  The campaign against the banks ran full steam in conjunction with Obama’s Chicago Project Vote.

 

RADICAL-IN-CHIEF Obama’s Organizing; the Hidden Story

This post continues the series of chapter summations of Radical-In-Chief by Stanley Kurtz.

The book takes the reader into the world of Barack Obama prior to his emergence as a national figure.  The Preface makes a bold opening statement.  The chapters that follow are evidential arguments that substantiate the statement.  The author’s documentation is exhaustive and the source attribution is impeccable.  The source notes alone number 1,119 and take up 63 pages.

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Chapter 4
Obama’s Organizing; the Hidden Story

Obama relates his various activities in Dreams from My Father without using the real names of the people and organizations with whom he associated and worked.  In the Preface to Dreams he explains “With the exception of my family and a few public figures, the names of most characters have been changed for the sake of their privacy.”  Neither did Obama disclose the full nature of the community organizing activities in which he was engaged.

Following his six month stint with Nader, Obama went to Chicago to work as a community organizer under the mentorship of Greg Galluzzo. Galluzzo’s group, called The United Neighborhood Organization (UNO), wanted better penetration into the black community to expand UNO which was mostly Mexican.  Responsibility for bringing in the black community was given to Barack.

UNO fought to have a new school be given the controversial name “Niños Heroes” in honor of 6 teenagers who died battling against the United States in 1847.  UNO singled out one of the school board members and besieged his home.  In another case, UNO opposed the building of a free medical clinic in a Hispanic neighborhood claiming the money should be spent on other causes.  Once again UNO picked one individual, this time an elected official as a target around which to personalize and polarize the issue.

UNO’s tactics are instantly recognizable as classic examples of  Saul Alinsky’s 13th rule for radicals “Pick the target, freeze it, personalize it, and polarize it.”

Galluzzo realized “churches were the most significant pre-existing source of organized constituents.”  So  Obama was given the task of bringing in the churches but he wasn’t very successful at it.  One priest is quoted as having said “[The organizers] are not interested in us…All they want to do is take over. It’s a political thing. And that’s not what this group [of ministers ] here is about.” Obama wrote about the priest in Dreams from My Father.  He discredited the priest by describing him as a bigot and gave him the name “Rev. Smalls”.

In his autobiography, Obama tells of his work to get federal money to pay for a job creation center in Chicago.  The program was called the Mayor’s Employment and Training Center, shortened to “The MET”.  The center failed in its ostensible purpose of creating jobs and was closed after just three years.  However, it was deemed a success by its organizers for two reasons, 1) it brought in federal money and 2) the local politicians were able to tell the community they had done something for them.

Barack worked with a partner in organizing the MET project. For Dreams the partner is given the alias “Rafiq” and described by Barack as an anti-American, anti-white, anti-Semitic black militant.  While Obama works with Rafiq he distances himself from Rafiq’s radical views, but says he was willing to tolerate them if it helps “to change the rules of power.”  Obama preferred to bring the same change by working within the capitalistic system rather than by overthrowing it

Asbestos and landfill concerns make ready issues around which community agitation can easily be built. Obama was active in both.  A demonstration was organized and Chicago’s Housing Director was invited to address the crowd.  When he arrived he was  prevented from using a microphone.  The crowd began chanting and when they turned militant the Housing Director fled in his car.  Naturally the press covered it all.  Organizers have two objectives for such events, either to win their demands or to enrage the crowd.  The organizer’s demands were not met but when the official fled it enraged the crowd.  Therefore the event was deemed to be a success.

School reform.  Obama’s efforts at school reform never accomplished much, but it was not for lack of trying. He formed an organization called the Developing Communities Project (DCP) and this became the vehicle for the school reform program. The Rev. Jeremiah Wright, Father Pfleger and someone named Anne Hallett were influential with educators and other community leaders.  They all became members of the DCP School Advisory Board.  Hallett went on later to assist Bill Ayers in running his brainchild, the Chicago Annenberg Challenge.

The first goal of the coordinated school reform plan was to transfer the power over the school system from the teachers unions to community organizations like ACORN, UNO and Obama’s own DCP.  To that end, the DCP and Galluzzo’s UNO formed a coalition to strengthen their respective hands.  The UNO method of operation was right out of Alinsky’s book.  The coalition followed suit.  For example, the coalition leaders gathered a sizable group of supporters and showed up at the door of a Chicago Board of Education meeting when it was already in progress.  They demanded to be heard and were invited to present their plan.  However, the coalition refused to do so unless every member of their group were allowed into the already crowded room, a demand they knew full well was impossible to fulfill.  Thus they were able to claim the school board denied them a hearing.  Community agitated.  Community polarized.  Mission accomplished.