Now that taxpayers are Citigroups biggest shareholder, owning 36% of common stock, it is time for the company and its foundation to end its relationship with ACORN and its affiliates.
Citigroup has received $45 billion in taxpayer TARP funds. In addition, taxpayers are on the hook for the lions share of losses on the companys $335 billion loan portfolio.
According to the 2008 annual tax return of the Citi Foundation, it provided the ACORN Institute, Inc. with grants of $500,000 for each of the years 2006, 2007 and 2008, for a total of $1.5 million.
According to the ACORN Institute website:
The ACORN Institute operates a countrywide network of ACORN Centers which (sic) provide free tax preparation, benefits enrollment, and foreclosure prevention services. In partnership with the Association of Community Organizations for Reform Now (ACORN)
Working in conjunction with major national partners such as Citigroup, H&R Block, the Marguerite Casey Foundation, the IRS Volunteer Income Tax Assistance (VITA) Program and others, ACORN Centers have an undeniable track record.
The Internal Revenue Service announced on September 23 that it no longer would include ACORN as a partner in its VITA program. If it is inappropriate for the IRS to partner with ACORN, it is likewise inappropriate for publicly owned Citigroup.
It is not known how much Citigroup (in addition to the Citi Foundation) provides ACORN. The company does not disclose its grants to charitable groups, notwithstanding our best efforts. In 2006 and 2007, NLPC sponsored shareholder proposals asking the company to disclose its giving. The resolutions failed because Citigroup management opposed them.
In a letter today to Citigroup CEO Vikram Pandit, I write:
Congress has acted swiftly to stop more taxpayer funds from going to ACORN. This action will be circumvented, however, if Citigroup and/or the Citi Foundation continue to bankroll ACORN and/or its affiliates.
The Citigroup/ACORN relationship appears particularly close. Citigroup executive Eric Eve serves on the ACORN Advisory Council.
ACORN has responded to the videotape controversy by hiring the unqualified Scott Harshbarger to review the matter and by suing video sting filmmakers James O'Keefe and Hannah Giles. According to a September 22 ACORN press release, ACORN's outside Advisory Council assisted in the identification and vetting of candidates for the role of reviewer.
According to media reports, Citigroup is awaiting the results of this investigation before determining its course of action. ACORNs probe of itself is not independent and the result is pre-ordained. By not taking necessary action now, you are endorsing ACORNs present leadership, and their actions.
ACORN is a tangle of criminality and anti-capitalist activism. Citigroup should end all relationships with ACORN, including the marketing of mortgages and Eric Eves service on the ACORN Advisory Council, without further delay.
Citigroup is currently marketing a mortgage product through ACORN targeted at illegal aliens. According to a June 10, 2009 press release:
If you don't have a Social Security Number, but you do have an ITIN (Individual Taxpayer Identification Number), you may qualify for an ACORN program that offers 30-year fixed-rate financing with a very competitive interest rate. You can also use alternative lines of credit, such as rent and utilities, to qualify. An ITIN loan, for homebuyers who may be new to this country, who do not have a Social Security number, gets its name from Individual Tax Identification Number.
Once the homebuyer meets with the ACORN counselor and is pre-approved for an ITIN loan, the next step is to work with a loan officer, said Brian Ellis, area manager with CitiMortgage. Because the homebuyer is pre-approved by ACORN, their loan will automatically be a 30-year, fixed-rate mortgage loan with no PMI.
The release continues:
CitiMortgage, as well as several other lenders, works with pre-approved ACORN clients through a national agreement with ACORN. Because of our agreement, we can get applicants the best interest rates available for ITIN loans. Currently, those rates range from 6 to 6.5 percent, which is excellent anywhere in the market, Ellis pointed out.
Once the client has been pre-approved through ACORNs program, has met with a loan officer and is approved for the loan, they only need a minimum of $500 out-of-pocket for the transaction.
Adriana Vasquez, a housing counselor for ACORN, said her organization works with CitiBank and other lenders to make ITIN loans available for first-time homebuyers who do not have Social Security identification.