CHICAGO AND LOS ANGELES — Stung by the recession and a string of scandals, the ACORN community activist organization has been shutting down in many of the communities it once worked to empower.
No new clients are being signed up, said national spokesman Brian Kettenring, while the group conducts an internal investigation into how its business is conducted.
The Assn. of Community Organizations for Reform Now had already shuttered 40% of its centers -- in cities including Chicago, Salt Lake City, Atlanta and Omaha -- since its high of 105 offices two years ago, he said. The branches helped low- and middle-income clients with housing, jobs and navigating government aid programs.
Kettenring said that the closures were mostly due to the poor economy and had become more frequent in the last year.
"We're seeing the same challenges the entire nonprofit sector is seeing," he said.
But former ACORN members say the scandals that have recently dogged the organization -- including allegations of mismanagement and voter registration fraud -- have been a bigger problem.
In the latest controversy, ACORN workers in several cities, including New York, Baltimore and Washington, were secretly videotaped giving advice to two conservative activists who posed as a prostitute and her pimp and said that they wanted to buy a house and run it as a brothel with teenage girls.
Workers were recorded giving advice on how to evade taxes and conceal the nature of their business.
The appearance of the videos last week on a Fox News program set off a furor.
The U.S. House voted this week to deny all federal funds for ACORN, while state lawmakers in California, Georgia and Minnesota called for investigations or a cutoff of state funds.
"When you have this big of a mess, it takes time to clean up and your funders drop like flies," said Madeline Talbott, a former head organizer for ACORN's operations in Illinois.
ACORN's Chicago office closed in January 2008, when Talbott -- along with 365 community members, the local ACORN board and at least a dozen paid staff members -- quit over concerns about mismanagement and a lack of financial transparency at the group's national headquarters.
"I feel so torn about what's happening now," said Talbott, who today is an organizer with Action Now, an advocacy group for the poor in Chicago.
"I'm so relieved not to be part of the organization anymore, and so sad because they are trying to clean things up."
Founded in Arkansas in 1970, ACORN advocates for higher minimum wages, access to affordable housing and increased voter registration in low-income communities.
It has been a top target for conservatives because of its liberal agenda. President Obama worked as an attorney for the group in the 1990s.
The organization mobilized a get-out-the-vote effort to support Obama's presidential bid last year, but it was tainted when nearly a third of the 1.3 million voters the group registered were rejected.
Last week, authorities in Miami announced the arrests of 11 former registration canvassers on allegations that they had submitted nearly 200 falsified forms.
A preliminary hearing is scheduled for this month in Nevada, where state prosecutors have accused ACORN and two former top officials of using an illegal incentive system to motivate people registering voters just before the 2008 presidential election.
ACORN officials blame such woes on a conservative push to force the organization out of business.
Amy Schur, ACORN's head organizer for California, acknowledged that the organization has had a tough year, but said that the state's 12 offices would survive.
Membership is up, and funding has been stable, she said.
"Our organization is under attack," she said. "But we're going to come out of this just fine."
Schur said that the decentralized nature of ACORN ensures that if an office in one part of the country founders, it won't necessarily affect those in the rest of the country.
Still, Schur said, she has taken steps to quell any public uneasiness. Schur said that the organization had hired an independent auditor to review the finances of the state's programs, and that the group would require more training for staff.
John Atlas, who just completed a book about ACORN's history, said that the recent scandals had brought "overwhelming bad publicity."
"The brand is tainted," Atlas said.
"This is going to make it harder for them to recruit new members, to get foundation funding and get funding for voter registration."
But Atlas said that ACORN had weathered a lot in its history, and he predicted that the organization would emerge from the scandals smaller but intact.
"They may have to shrink back; they may have to rebrand," he said. "They'll be smaller, but they'll survive."
Latrell Smith, a former ACORN worker in Chicago and now an organizer for Action Now, said that the scandals had been sobering and infuriating.
In his current job, he is more cautious when talking with families that seek help.
"I joined ACORN because I wanted to make a difference in my community," Smith said. "Before the videos came out, I could never have imagined something like that happening in ACORN."
Now, he said, "I wonder if we could be next."
Times staff writer Ashley Powers in Las Vegas contributed to this report.