Watchdog Accuses Obama Justice Department of Ignoring ACORN Fraud

Demonstrators from ACORN's Home Defenders rally outside the foreclosed home of Marie Elie in Elmont, New York, April 9, 2009. (Reuters)

The Obama Justice Department administration shut down an investigation into ACORN last year, ignoring evidence of fraud at the community group, a government watchdog claimed Thursday, citing investigative documents it obtained.

The watchdog, Judicial Watch, in releasing the documents, accused ACORN of "evident criminal conduct" and suggested that Obama's past ties to ACORN played a role in the investigation's conclusion.

ACORN responded by emphasizing that it was cleared of wrongdoing, though the federal investigation found problems with how the organization hires and trains employees.

The investigation stemmed from complaints made in 2008 by two Republican officials in Connecticut. In Stamford, Republican Registrar Lucy Corelli said her office rejected 300 of 1,200 ACORN voter registration cards because of "duplicates, underage, illegible and invalid address," causing $20,000 in extra work. In Bridgeport, Republican Registrar Joseph Borges said an ACORN drive "produced over 100 rejections due to incomplete forms and individuals who were not citizens."

The Justice Department noted that ACORN had engaged in "questionable hiring and training practices" but closed the case, claiming no election laws had been broken.

In fact, the "preliminary investigation" by the FBI field office in New Haven, Conn., was opened on Jan. 22, 2009, two days after the Obama administration took office, according to the documents obtained by Judicial Watch. Two months later, the FBI field office concluded there wasn't enough evidence to launch a full investigation into ACORN's activities in Connecticut.

Judicial Watch, a public interest group that investigates government corruption, suggested the probe was superficial.

"These documents reflect systematic voter registration fraud by ACORN. It is a scandal that there has been no comprehensive criminal investigation and prosecution by the Justice Department into this evident criminal conduct," Judicial Watch President Tom Fitton said in a written statement.

"Given President Obama's close connections to ACORN, including his campaign's hiring of the ACORN's Project Vote organization, it seems rather obvious why Attorney General Holder has failed to seriously investigate these and other alleged ACORN criminal activities."

But ACORN brushed off Judicial Watch's claims.

"It would appear from the press release and old documents issued by Judicial Watch that Department of Justice, mostly under the Bush administration, looked into complaints about ACORN from two local Republican officials and didn't find any evidence of wrongdoing," ACORN spokesman Kevin Whelan said in a written statement to FoxNews.com.

"In fact, ACORN's efforts to encourage voter participation were not only legal, they were successful in helping low income and minority citizens to participate in our democracy," he said. "That is something everyone should applaud."

ACORN has been under fire since September, when an undercover filmmaker released undercover videos showing some ACORN workers around the country seeming to offer advice on how to skirt the law. That controversy prompted Congress to ban the group from receiving federal funding.

But that ban is being challenged, and a federal judge on Wednesday affirmed her earlier ruling that ACORN can't be barred from receiving taxpayer money despite all the scandals and accusations of corruption plaguing the group.

U.S. District Judge Nina Gerson said Wednesday that Congress acted unconstitutionally when it tried to stop federal funding of the troubled group last fall.

In her ruling, she said it was "unmistakable that Congress determined ACORN's guilt before defunding it. ACORN alone was singled out for adverse treatment."

She said there is a process when federal contractors can be suspended or cut off and that wasn't followed.

Congress moved to stop taxpayer money from going to ACORN following a series of undercover videos released in September that showed employees of the group appearing to offer tax advice to a couple posing as a pimp and prostitute.

ACORN applauded the judge's ruling.

"The court's ruling and ACORN's vindication in other forums make clear why the protections of our Constitution are so dear -- all of us suffer when a politically motivated frenzy feeds a rush to judgment," ACORN chief executive Bertha Lewis said in a written statement.

"After nearly two years of continual attack by the extreme right -- aided by many who should have known better -- ACORN has now been exonerated in many forums. The dedicated volunteers and organizers who have worked with ACORN will continue our efforts to create a more fair and just nation."

ACORN has been under fire for nearly two years now, accused of misusing funds for political purposes and voter registration fraud. It faces criminal charges in a Nevada voter registration case, among a variety of other allegations. ACORN says it's the victim of political attacks.

Fox News' Eric Shawn contributed to this report.