California ACORN has broken away from its embattled parent organization to form a new nonprofit group, a move that observers say might foreshadow other defections that would seriously undermine one of the nation's largest and most politically powerful community organizations.
The new group will have the same mission, will be staffed by many of the same employees who worked for ACORN, and will be funded by most of the same donors, said Amy Schur, the former head organizer for California ACORN.
Schur sits on the interim board of directors for the new group, the Alliance of Californians for Community Empowerment, which was incorporated in California on Monday. ACCE is seeking federal nonprofit status.
A spokesman for ACORN declined to comment.
Schur said ACCE plans changes, including outsourcing accounting and forming an advisory council of 22 community leaders, in order to avoid the problems with finances and management that made ACORN vulnerable to conservative attacks.
The news comes four months after Congress voted to cut federal funding for ACORN, which advocates for higher minimum wages, access to affordable housing and increased voter registration in low-income communities.
Congress was under pressure to strip funding from the organization after two undercover activists posing as a pimp and prostitute released secretly recorded videotapes in which they appear to receive advice on tax evasion, human smuggling and child prostitution from ACORN employees in several states.
ACORN, or the Assn. of Community Organizations for Reform Now, has also been accused of voter registration fraud in several states.
Although a federal judge ruled in December that the funding cut was unconstitutional, and a Congressional Research Service report found that ACORN had not broken any laws in the last five years, the scandal so tarnished ACORN's reputation that the California branch, which boasted 48,000 members and an annual operating budget of $3.5 million, decided to break off, Schur said.
"The level of controversy had become a significant distraction for us," said Schur, who said members raised the idea of forming a new organization at a statewide board meeting in Oakland in October.
Schur said California members were looking for local control and were frustrated by a lack of transparency. In 2008, it was revealed that top ACORN leaders had tried to hide the embezzlement of nearly $1 million from the organization nine years ago by the brother of ACORN founder Wade Rathke.
John Atlas, a New Jersey writer who recently completed a history of ACORN, said that members with similar complaints in other states were considering following California's lead. He and others said donor support has plummeted.
"The foundations that have been keeping ACORN going, they've cut ACORN off at the knees," said Peter Dreier, a professor at Occidental College who teaches community organizing.
Last fall, after the House voted to bar ACORN from receiving federal funds, ACORN's chief executive, Bertha Lewis, blamed the woes on "a multiyear political assault stemming variously from the Bush White House, Fox News and other conservative quarters" and vowed to not let the restrictions cripple her organization.
Before California's defection, ACORN claimed 400,000 dues-paying members in 38 states. California represented about an eighth of its national membership.
Schur, who worked with ACORN for 21 years, said she thought the organization had done tremendous work but had grown in an unhealthy way.
"We did not adequately invest in legal and financial oversight," she said. "Because of that lack of infrastructure, we were vulnerable to attacks."
Keith Rohman, president of the Los Angeles City Human Relations Commission and chairman of ACCE's advisory council, said the new California group "is an opportunity to take what is best and leave behind what was not so good."