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ACORN Defunding Spurs Proposals to Bar Federal Money to Companies Convicted of Felonies

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As the embattled community group ACORN continues to come under fire, a group of lawmakers that voted against a recent measure to defund it have introduced legislation of their own. The Against Corporations Organizing to Rip-off the Nation Act of 2009 would prohibit federal funding to corporations guilty of felony convictions. We speak to independent journalist Jeremy Scahill. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: The embattled community group ACORN is continuing to come under fire across the country. In Louisiana, Attorney General James Caldwell announced that he is stepping up an investigation into embezzlement at ACORN that took place nearly a decade ago. In Minnesota, Republican lawmaker Michele Bachmann is asking Governor Tim Pawlenty to name a special investigator to look into the activities of the local ACORN chapter. In Virginia and Kansas, Republican organizations are going after one of ACORN’s closest allies, the Service Employees International Union, because of its longstanding financial and leadership ties to the group.

ACORN, which helps poor people fight foreclosures and fix tax problems, has long been the target of right-wing scorn. But the group has been reeling since ACORN workers were secretly captured on video last month appearing to offer advice to a pimp and prostitute. Since then, the group has seen the Internal Revenue Service, Bank of America and the US Census Bureau cut ties with it; faced investigations into its activities announced by the Justice and Treasury Departments; and watched as Congress has cut its funding.

ACORN received about $53 million in federal funding over fifteen years. The Defund ACORN Act recently passed in the Senate by a vote of 83-to-7 and in the House by 345-to-75.

But in response, some of the lawmakers that voted against the measure have introduced legislation of their own. Independent Senator Bernie Sanders of Vermont says the same standard should be applied to defense contractors and proposed amendment to the defense appropriations bill that focuses on defense contractors who receive billions of taxpayer dollars every year. And in the House, Minnesota Democrat Betty McCollum introduced an ACORN act of her own titled the Against Corporations Organizing to Rip-off the Nation Act of 2009, which seeks prohibit federal funding to corporations guilty of felony convictions.

For more, we turn to investigative journalist and Democracy Now! correspondent Jeremy Scahill. He is author of the international bestseller Blackwater: The Rise of the World’s Most Powerful Mercenary Army. His articles on the ACORN story are at He joins us via Democracy Now! video stream.

Welcome to Democracy Now!

JEREMY SCAHILL: Thanks for having me, Juan.

JUAN GONZALEZ: So, Jeremy, tell us about your take on what Congress is not doing about people who are supposedly ripping off government or involved in scandal.

JEREMY SCAHILL: Right. Well, I think that what we saw was a political act of cowardice when all but seventy-five Democrats voted in the House to defund ACORN. Really, ACORN’s funding base is not at all dependent on federal money, so this was more of a symbolic vote, in a legislative sense, but in a broader sense it really constitutes a sort of witch hunt against ACORN.

ACORN is an organization that certainly has problems and is worthy of investigations. In fact, the CEO of ACORN, Bertha Lewis, was praised by Michael Steele, the chair of the RNC, in September, for what she’s doing to try to address some of the problems and issues that have come up in ACORN’s history.

But what we saw was the Republicans introduce a piece of legislation that is so hypocritical that it would be funny if it wasn’t harming an organization that has at its center a campaign to help poor people, low-income folks, working families. And what they did is they said that because ACORN is under these investigations and because individual ACORN employees have been caught in these acts that you were referring to before, that ACORN, the organization, should be banned from receiving federal funds.

Senator Claire McCaskill of Missouri, who’s been very good on the war contractor issue, voted in favor of defunding ACORN. All but seven Democrats voted for it the first time around, and then the next time around there were ten Democrats that voted against it in the Senate. What we have here are Democrats going out of their way to target an organization that has 500,000 member families and doing almost nothing to go up against the $300 billion-a-year contracting industry that literally is making a killing off of the wars in Iraq and Afghanistan and elsewhere, and these are companies that have actual convictions, actual rap sheets. They are companies that are actually corporate felons.

Juan, you mentioned Representative Betty McCollum’s legislation, the Against Corporations Organizing to Rip-off the Nation Act of 2009. It’s called the ACORN Act. What that would do would be to “prohibit” — and this is a quote — “prohibit the federal government from awarding contracts, grants or other agreements to providing any other federal funds to or engaging in activities that promote certain corporations or companies guilty of certain felony convictions.”

In particular, Betty McCollum targets Pfizer, the massive pharmaceutical company, the maker of the most popular drug in the Senate, Viagra. Pfizer recently settled with the US Justice Department what was described as the largest fraud — healthcare fraud settlement in the history of the US Justice Department. The total fines paid out by Pfizer were almost $3 billion — with a “b” — $3 billion for fraud, for mislabeling or mismarketing the purposes of an anti-inflammatory drug called Bexstra. They had to settle with various states’ Medicare programs for fraud. Yet, this is a company that received in 2007 $77 million in US government contracts. Betty McCollum’s legislation would seek to prevent this, would seek to stop it, because what you’re seeing is that when the — even though the Justice Department settled with Pfizer and this massive amount of money was paid, it’s really nothing to Pfizer in the broader sense of it, because Pfizer makes $40 billion a year in profits. Just in profits.

So, you know, in closing on this, Juan, what I would say is you have an effort now on the part of Betty McCollum, of Bernie Sanders — I know that there’s other legislation that’s going to address Blackwater that’s going to come out of the House in the next two weeks or so — and you have them actually calling the question, not only on the Republicans that are targeting this community organization ACORN, but on the Democrats who vote to defund ACORN and do very little, if nothing, to go after actual corporate felons, corporate criminals, with very long rap sheets.

JUAN GONZALEZ: And Jeremy, what about some of the defense contractors and their judgments or their convictions for fraud?

JEREMY SCAHILL: Right. Well, I know you’re going to have Bernie Sanders on shortly, and I don’t want to steal his thunder, in the sense that he’s been speaking out on this, but I will say this: of the top ten defense contractors, a full ten of them have been convicted of some form of fraud, waste or abuse in the last several years. The top three — Boeing, Northrop Grumman and Lockheed Martin — are all corporate criminals. These companies combined make about $100 billion a year. And it’s just — it’s incredible. They have a massive share of the war industry market. And when they pay out these fines, it’s just sort of the cost of doing business.

And, you know, Lockheed Martin is basically like a parallel government to the US government. It’s in every aspect of society. It’s just a massive corporation. And it also gives a lot of campaign contributions and spends a lot of money lobbying.

You know, Pfizer, the company I was just mentioning, spent $11 million lobbying last — this year already, and we’re not — the year’s not even over. They’ve spent $11 million lobbying. They pour money into the campaign coffers of Democrats and Republicans alike.

You know, people talk about an election scandal, Juan, with ACORN. Here’s the real election scandal in this country. These corporations make millions and billions of dollars from US taxpayer money. They use the Treasury as an ATM. They then funnel that money back into the campaign war chest of the politicians that are going to then ultimately shield them from any kind of accountability. It’s a very disturbing reality, I think, but it shows how politics work in this country.

And you know it as well as anyone, Juan, that the Democrats now are the largest recipient of defense industry dollars in the campaigns, 52 percent during the ’08 cycle. They’re on course right now to increase that to 60 percent of all contributions from the defense industry in the 2010 election cycle going to the Democrats.

So, you know, you could have the Justice Department going after them for these fines. You can have all sorts of regulations and rules put in place. These are recidivists. And the only way to actually stop them is to cut them off. And fortunately, there are a few Democrats in the House that seem to understand that right now, maybe one or two in the Senate. But this is certainly something that people around the country can weigh in on with their various representatives.

JUAN GONZALEZ: Well, Jeremy Scahill, I’d like to thank you for being with us, award-winning investigative journalist and Democracy Now! correspondent. His book, Blackwater: The Rise of the World’s Most Powerful Mercenary Army. His articles on ACORN are at

And we’ll be back in a moment to talk with Senator Bernie Sanders about the issue of the singling out of ACORN and those companies that are not being addressed by Congress.

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