NEW ORLEANS (AP) – Four conservative activists accused of trying to tamper with a senator’s phones were just trying to record embarrassing undercover video of her staff ignoring phone calls from constituents angry that she supported health care reform, one of their attorneys said Thurday.

The four, including activist James O’Keefe, known for posing as a pimp and using a hidden camera to target the community-organizing group ACORN, were arrested Monday after targeting Democratic Sen. Mary Landrieu’s office in a New Orleans federal building.

Attorney J. Garrison Jordan denied they were trying to disable or wiretap the phones in Landrieu’s office.

“You’re dealing with kids,” he said. “I don’t think they thought it through that far.”

Instead, Jordan said, they hoped to get embarrassing video footage of Landrieu’s staff handling constituent calls. Her office received complaints last month that callers opposed to her health care stance couldn’t get through.

Landrieu was not impressed with Jordan’s explanation.

“Attorneys are hired to spin for their clients,” she said Thursday in an interview in Washington. “Good luck.”

Protesters marched in front of Landrieu’s office in Baton Rouge in December to criticize her support for Senate health care legislation and complain that they couldn’t get through on her office phones. Landrieu said at the time that her office received a high volume of calls.

“Our lines have been jammed for weeks, and I apologize,” Landrieu said in interview with The Advocate of Baton Rouge in December.

Jordan said his client, Robert Flanagan, the 24-year-old son of a federal prosecutor in Louisiana, did not intend to break the law when he went into the office posing as a telephone worker.

No matter their intentions, the four face the serious charge of entering federal property under false pretenses for the purpose of committing a felony, which carries up to 10 years in prison. They are free on $10,000 bail.

Investigators are aware of Jordan’s explanation, but are pressing ahead to see if that was indeed the men’s motive, a senior federal law enforcement official said Thursday. The official spoke on condition of anonymity because the investigation is ongoing.

Charged along with O’Keefe and Flanagan were Joseph Basel, 24, of Minnesota and Stan Dai, 24, of the Washington, D.C., area. The four are due back in court Feb. 12.

O’Keefe, Basel and Dai stayed with Benjamin Wetmore, a friend of O’Keefe’s, while they were in New Orleans. Wetmore, a 28-year-old law school student, was O’Keefe’s boss when he worked at the Leadership Institute, an Arlington, Va.-based program that trains conservative activists.

Wetmore declined to discuss their stay at his house and what they did while there. But he praised O’Keefe’s work targeting ACORN on his Web site and said he hired O’Keefe in 2006, helping him hone his undercover camera craft.

In an Oct. 16 blog post, Wetmore criticized the Leadership Institute, where he no longer works, for not supporting O’Keefe’s budding activism. Wetmore said he was “nearly fired for buying the initial video equipment that James used.”

O’Keefe last year became famous for his videos about ACORN, the Association of Community Organizers for Reform Now, which has affiliates that register voters in urban and other poor areas of the country. He used a hidden camera to record as he brought a young woman posing as a prostitute to the group’s offices.

Hale Boggs Federal Building in New Orleans

In Monday’s incident, authorities said O’Keefe used his cell phone to try to capture video of two of his fellow defendants in Landrieu’s office before their arrest. The two posed as telephone repairmen—wearing fluorescent vests, tool belts and hard hats, one equipped with a hidden camera—and asked to see the phones at Landrieu’s office. The fourth is alleged to have waited outside in a car with a listening device that could pick up transmissions.

O’Keefe has declined to discuss what he and the others were doing in Landrieu’s office. But late Wednesday he told his Twitter followers that the government “concedes no attempt to wiretap.”

Andrew Breitbart, whose biggovernment.com site launched O’Keefe’s ACORN videos and who has since hired O’Keefe as a contributor, also downplayed the federal case.

“Their uniforms were outlandish,” Breitbart said in an interview. “This was like ‘Hee Haw,’ a blatant clown-nose-on spectacle to make a salient political yet mildly humorous point.”

O’Keefe hinted last week that he had a new, high-profile stunt in the works. Four days before he was charged in connection with the Landrieu incident, he promised his audience at a conservative think tank’s luncheon they would be hearing about a project he was working on in New Orleans.

He wouldn’t elaborate, according to people who heard his speech at the Pelican Institute’s event last Thursday in New Orleans.

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Associated Press Writers Justin Pritchard in New Orleans and Ben Evans and Pete Yost in Washington contributed to this report.

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Pelican Institute: http://www.pelicaninstitute.org

BigGovernment.com: http://www.biggovernment.com

Sen. Mary Landrieu’s official site: http://www.landrieu.senate.gov

The issue of phantom Congressional districts listed in the national stimulus database recently created a stir. But the tally of Louisiana jobs allegedly created or saved by President Obama’s signature domestic policy program raises more serious questions about this database.

A review of the self-reported information may inspire a chuckle or a sneer, particularly when less-than-savvy recipients of federal money don’t know what Congressional district they’re in, or that the state only has seven such districts. That unsophisticated approach made headlines when money was listed as being spent in various districts that just didn’t exist. In the end, though, those reports are likely to be modified and will land in the appropriate district.

A greater concern is the 475 jobs listed as created or saved in Louisiana, even though the related projects aren’t started. And the 171 jobs chalked up when small raises were given to Head Start workers. And the over 100 low-paying work-study jobs on college campuses that count just as much as, say, a full-time architect for a major building program. Other entries indicate what could be an under-reporting of jobs.

These are just some examples of questionable figures in the statewide data analyzed by The Pelican Institute for Public Policy.

Figures aren’t certified

Even as federal recovery officials acknowledge problems in the start of such reporting, they’re standing by their numbers. Nationwide, more than 640,000 jobs were reported saved or created by $47 billion in spending, though the reports don’t distinguish between those two categories. The report covers February through September 30.

“We warned everyone there would be mistakes, and there are mistakes,” said Ed Pound, spokesman for the independent Recovery Accountability and Transparency Board, which runs the federal reporting Web site recovery.gov. “If we just go in and start changing people’s numbers, we’d have some credibility issues.”

He said the goal is to be transparent about the numbers reported, and if there are problems, they’re at the recipient level. He said the board is considering a change that would let recipients correct mistakes when they’re found, not just every three months, as is the policy now.

“We do not certify the accuracy of the figures,” Pound said.

Of the $787 billion in stimulus money, only about one third will show up in this database, with the rest taking the form of direct assistance to individuals or tax breaks.

Louisiana recipients of American Recovery and Reinvestment Act money reported that they created or saved 9,136 jobs. Just over $555 million had been received by government, non-profit and private entities in Louisiana at the end of the first reporting period.

The first period of collecting information on stimulus spending is a massive undertaking, with more than 130,000 recipients across the country each filling out a form online. Government agencies were expected to check the filings before they were released to the public.

The Government Accountability Office declared that the effort was a good first step, but “there are a range of significant reporting and quality issues that need to be addressed.”

74 jobs not here yet

The city of Lake Charles is a case in point. An official reported that 34 jobs were created or saved by a sidewalk repair program that has not yet started – and hasn’t received a dime of the promised $230,000. Likewise, a rehab of the city bus station is expected to generate 40 jobs, but has not done so yet. Still, those 40 made it into the national database.

Esther Vincent, the director of community development and services, said she reported estimates from the grant application for the whole sidewalk project, which won’t start until next year. She said she didn’t realize that the online form was supposed to cover activity through Sept. 30.

“If I put 34 in that area, then I’m incorrect,” she said. “We have not done any building. Zero.”

And Public Works Director Mister Edwards said the 40 jobs, most of them retained not created, will be realized in the coming months but none has been financed yet. He said he reported the jobs on the advice of the Federal Transit Administration.

A ripple effect

The GAO report points out that the database should report only jobs created directly by the recipient, but not the second-tier jobs that might be created when the money spent keeps suppliers afloat.

But among the top 10 for jobs creation in the state is Mike Hooks, Inc, a dredging company that specifically included those related jobs. Hooks reported creating or saving 125 jobs through two contracts through the Army Corps of Engineers, worth a total of $9.3 million.

“Those aren’t strictly limited to our organization,” said Mike Kerns, a dredging superintendent with the company. “That’s the way it’s supposed to be done according to the government Web site. It’s very much a trickle effect or ripple effect.”

Ashley McMahon, an executive with the company, said a dredging trade organization gave the same advice to other companies, encouraging the broader reporting.

She said the company likely created 3 or 4 jobs and retained about 50 employees as a result of the work. She said the money let them avoid annual layoffs for the months when work slows, and it gave them money to buy new equipment.

Most figures tough to track

Because the state itself was the biggest recipient of money and reported its figures in bulk, it’s difficult to check the accuracy of the figures it reported. Two grants alone – stabilization money for the state budget – are worth $516 million, or 93 percent of the stimulus money sent to Louisiana. The state reported that 3,669 jobs were created or saved with that money.

Though the subrecipients of the money are listed, those reports don’t say how many jobs were created by each.

A spokesman with the state’s Division of Administration did not respond to a request for clarification on how the jobs were counted.

Each recipient was required to say how much work had been done with the money received. More than 325 recipients declared getting $277 million – but hadn’t started work yet. Still, they said 475 jobs were created or saved.

Others hadn’t gotten any money, but said they’d created jobs. The state itself said it created or saved 3,452 jobs even though it hadn’t gotten any of the $388 million it’s expecting for one budget stabilization grant. Still, the state reported spending $13 million in that area.

More than 550 other jobs were reported by entities that hadn’t yet received money.

Raises count as jobs

Nationwide, the Head Start early childhood education program has been under attack for overzealous reporting. In general, the stimulus money has been used to grant 1 percent to 2 percent raises to employees, though it has created some new jobs. Still, all employees getting a raise were totaled in the “jobs saved or created” category. That’s as many as 10,000 jobs nationwide, according to The Boston Globe. The online figures show at least 171 in Louisiana.

Federal officials with Health and Human Services, which oversees the program, have said their reporting requirements are being reviewed.

The federal program to give aid to students who work on campus is also a source of possible job inflation. At Xavier University alone, 91 jobs were reported with a $181,000 grant. That works out to just under $2,000 per student.

Xavier representatives did not return calls seeking an explanation.

Louisiana State University, Delgado Community College, and Southern University also reported jobs created or saved through work-study jobs.

At the low end of the spectrum, some recipients diligently reported fractions of jobs saved or created.

For instance, LSU reports that a full time research assistant spends 10 percent of the workday examining the possible social effect of lowering the drinking age on campuses nationwide, part of a $115,000 grant.

And that’s worth .1 jobs, according to recovery.gov.

ACORN and its affiliates currently owe more than $2.3 million in long overdue back taxes to all levels of government.

It's deathly quiet at the former funeral home at 1024 Elysian Fields Avenue, New Orleans. (photo: Kevin Kane)

As of Nov. 11 the exact figure was $2,328,596.95.

ACORN owes money to the IRS, Arkansas, California, Delaware, District of Columbia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Mississippi, New Mexico, New York, New Jersey, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Washington, Wisconsin, and to the cities of New York and Philadelphia.

I first uncovered ACORN’s massive tax debts last year.

A detailed list of the tax liens is available here as an Excel spreadsheet. Data was obtained from Nexis and the Pelican Institute.

The liens are grouped according to the addresses against which they were filed. In New Orleans 2609 Canal St. is functioning as ACORN’s headquarters in that city. That office was raided a few days ago by Louisiana Attorney Buddy Caldwell, whose investigators seized computers and documents.

Elsewhere in New Orleans, the old headquarters at 1024 Elysian Fields Avenue reportedly stands empty. The property, which was previously a funeral home, has been on the market for months.

French Quarter Realty is asking $835,000 for the property, which is now encumbered by $1,278,862 in tax liens, $619,271 of which is owed to the IRS. It’s unclear why the Obama administration’s tax enforcers haven’t seized the property yet. Perhaps the president is extending a courtesy to his former ally and client.

Liens were also filed against ACORN offices at 16 W. 25th St. in Baltimore, 209 W. Jackson Blvd. in Chicago, and 846 N. Broad St. in Philadelphia.

The brother of ACORN’s founder embezzled $5 million from the organization, nearly five times more than the figure previously acknowledged by the New Orleans activist group’s officials, according to a subpoena served Monday by the Louisiana Attorney General’s Office.

“The exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on October 17, 2008 by (ACORN Chief Executive Officer) Bertha Lewis and (ACORN board member) Liz Wolf that an internal review had determined that the amount embezzled was $5,000,000,” reads the court document. “It is still unclear if some of the monies embezzled are from state, federal of private funds.”

ACORN 2nd Subpoena –

ACORN officials have said that Dale Rathke, brother of founder and former CEO Wade Rathke, in 1999 and 2000 inappropriately charged $948,000 to accounts controlled by Citizens Consulting, the bookkeeping arm of ACORN. Under a quiet arrangement known to only a fraction of the organization’s 50-member board, Dale Rathke was allowed to set up a repayment plan. He eventually repaid about $200,000 before a private donor paid the balance.

Attorney General Buddy Caldwell said the statute of limitations for theft from ACORN could present problems. However, the language about the source of the money in the new subpoena hints that ACORN might not be the only victim of the alleged embezzlement and could open new avenues of investigation or prosecution.

Though the debt is paid, the attorney general’s office can still consider whether ACORN or Citizens Consulting intended to defraud the state when it failed to submit employee payroll withholding taxes for nearly six years.

The document says former members of the ACORN board of directors approached state officials with claims that the group was breaking laws “related to the filing of employee withholding taxes, failing to report an embezzlement of nearly $1 million by the brother of the founder…., obstructing justice and violations of the Employee Retirement Security Act.”

The obstruction allegation comes from the failure to report Dale Rathke’s improper charges, and the retirement-account contention refers to the possible illegal use of money in those accounts for ACORN employees.

It seeks myriad financial records dating from 1998 from Citizens Consulting regarding ACORN and all related entities, such as income paid on behalf of all ACORN affiliates, all financial audits and statements, a list of all employees for each related group, notices of tax liens and all tax returns.

The subpoena also focuses on Dale Rathke’s actions, seeking information “detailing the theft of funds by Dale Rathke…and failure to report the theft to the proper law enforcement agencies.” It also demands records “dealing with the issue of Dale Rathke’s illegal use of employee benefit funds” and “records that detail all of the funds received by Dale and Wade Rathke in either income, benefits, use of properties, credit cards or other accounts, loans or other means of deferred compensation.”

Regarding the tax many tax liens filed against ACORN and related groups, the subpoena said that “a substantial portion” of the $306,000 owed was not paid until “bank accounts were levied.”

Records in the Orleans Parish Clerk of Courts Office shows that ACORN-related entities still owe more than $1.5 million in federal taxes, as well as about $30,000 in state taxes. The most recent filing from the IRS was recorded last month for more than $500,000. It makes a claim on the ACORN building on Canal Street until the debt is paid.

Most liens stem from payroll taxes withheld from employees but not submitted to the state or the IRS. The $306,000 bill from the state says payments were missed in 66 tax periods, from 2002 through mid-2008.

Original story here.

Despite landing $625,000 worth of work with the city of New Orleans to develop or repair housing for poor people, an offshoot of the activist group ACORN appears to have done nothing to fulfill the contract, no longer has the specified office in New Orleans and no longer employs the director who signed the contracts.

Acorn Housing Corp. has received no city money in connection with the two contracts, city spokeswoman Ceeon Quiett told WDSU-TV recently. Neither Quiett nor her representatives responded to requests from The Pelican Institute to address other questions about the contracts, one of which expired Aug. 31.

Those questions include:

• How did Acorn Housing get the contracts, through competitive bid or otherwise?
• Why did no one with the city monitor the contract to ensure the city got what it expected?
• Is the money still available to help low-income residents of New Orleans?
• Do city officials expect the current contract, which expires Jan. 31, to provide any services?
• Will Acorn Housing continue to be included on the city’s list of designated non-profit Community Housing Development Organizations?  

In response to a public-records request from The Pelican Institute seeking all documents associated with the contracts, the city law department could produce only the contracts themselves, and one of them lacked the attachments called for in the contract. No other records, such as required monthly progress reports nor necessary budget materials, were provided by the city.

“That’s all we have,” said Sarah Garrett of the law department.

A receptionist at the ACORN offices on Canal Street said the man who signed the contracts, Acorn Housing Director Gerald Cloud, no longer was an employee, adding that he left months ago. She said the current director, Martin Shalloo, was not available and referred further questions to Acorn Housing representatives in Washington, D.C., who did not return calls seeking comment.

The contracts say the administrative offices of Acorn Housing are at 1015 Frenchmen Street. That’s now an empty lot that shares a property line with the former ACORN headquarters on Elysian Fields. However, relatively new above-ground sewage lines indicate a trailer was there recently, and an undated image from Google Maps shows an office-style trailer on the lot. An Acorn Services van and two trailers sit amid piles of trash in the rear of the lot.

The address does not show up in the online database maintained by the Orleans Parish Assessor’s Office. However, 1017 Frenchmen is described as a vacant lot owned by Elysian Fields Corp., which IRS forms refer to as an “alter ego” of ACORN. Indeed, the Louisiana Secretary of State’s corporate database shows the same officers control both entities.
The first city contract, signed Sept. 1, 2008, would have provided $375,000 for Acorn Housing to develop 18 homes for low-income residents. It was to be part of an ambitious $20 million program by Acorn Housing. In the end, the agency wanted to develop 150 homes in the Lower 9th Ward, combining “100 adjudicated properties from the city of New Orleans and an additional 50 lots that we plan to acquire,” according to a project description attached to the contract. It said work would start in September 2008.

The 18 homes financed through the city contract were to be the first phase.

The second contract, signed Feb. 1, would reimburse Acorn Housing for up to $20,000 in “minor home repairs” to each of 10 low-income residents. The agency was also expected to train contractors and solicit beneficiaries through advertising.