Under Fire, ACORN Orders Client Freeze

WASHINGTON, Sept. 16, 2009— -- Grassroots community organizing group ACORN, with its former allies in the White House and Congress joining the chorus of conservative criticism against it, today called the actions of certain employees "indefensible," and placed an immediate freeze on taking in new clients and ordered an independent audit.

But Bertha Lewis, ACORN's CEO, told ABC News she suspected that at least some of the attacks against her organization had a "racial undertone."

President Obama has past ties to the group. He represented ACORN and many other groups in a 1995 lawsuit that forced Illinois to implement the National Voter Registration Act, and his presidential campaign hired a group affiliated with ACORN for get-out-the-vote efforts last year.

But the White House today criticized the actions of ACORN staff seen in videotapes that recently surfaced online and on cable TV, tapes that had already sparked a firestorm of criticism and a swift action on Capitol Hill.

"The conduct that you see on those tapes is completely unacceptable," White House spokesman Robert Gibbs said.

In the tapes, two young conservatives dressed as a prostitute and a pimp receive advice from ACORN employees in various cities on how to skirt the law and hide a fictitious prostitution ring.

"Find another name ... find another name for, and don't say that you are prostituting or whatever," one ACORN employee advises the two.

Lewis told ABC News that the actions of the ACORN staff on the tapes are "indefensible."

"They were terminated immediately, and we are reviewing all our intake and office management in the future to make sure that something like this doesn't happen again," she said.

This is not the first time ACORN has drawn negative headlines. Last week, 11 ACORN employees in Miami were arrested and charged with voter registration fraud, a complaint repeatedly made about the group in 2008.

But with these recent videos, frequently aired on Fox News Channel and burning up the conservative blogosphere, ACORN seems to have hit a tipping point.

ACORN has received about $20 million in federal funds in the last decade, and has helped those communities with voter registration, housing, and employment issues.

Last Friday, the Census Bureau cancelled its relationship with ACORN. The group was to work on behalf of the government to encourage poor and minority participation in the 2010 census.

Today, Gibbs said the administration is reviewing all ties to the group.

"The administration takes accountability extremely seriously," Gibbs said. "I think the Census Bureau evaluated and determined that this group could not meet the bureau's goal of achieving a fair and accurate count in 2010."

ACORN suffered another blow Monday when the Senate voted 83-7 to kill its housing grants.

Republicans who have long opposed ACORN's politics and methods are calling for investigations.

"These are not isolated incidents," said Sen. Richard Shelby, R-Ala. "ACORN has been charged with voter fraud."

But Lewis told ABC News that there is something else beyond the videos -- what she calls "a modern day form of McCarthyism."

"We've made sure that poor people, young people, minorities are participating in this democracy," she said. "There is an undertone of racism here. ... I think they're basically saying these people shouldn't be trusted, how could they be trusted? You know, they're all poor black and brown people."

Lewis said ACORN's success is "a threat to those who have power," and said conservatives are campaigning to discredit people like Attorney General Eric Holder, Obama, and Supreme Court Justice Sonia Sotomayor.

Whatever the reason, ACORN now finds itself with few defenders on Capitol Hill or in the West Wing.