DoJ: Federal agencies must honor ACORN contracts

posted at 11:10 am on November 28, 2009 by Ed Morrissey

No one doubts that Congress has the power of the pursestrings, and can choose to fund or not fund projects as it sees fit — within the Constitution, of course.  But does Congress have the power to break contracts?  The Department of Justice says no and that any contractual obligations between federal agencies and ACORN have to be met, regardless of Congress’ attempt to defund the controversial group:

The Justice Department has concluded that the Obama administration can lawfully pay the community group Acorn for services provided under contracts signed before Congress banned the government from providing money to the group.

The department’s conclusion, laid out in a recently disclosed five-page memorandum from David Barron, the acting assistant attorney general for the Office of Legal Counsel, adds a new wrinkle to a sharp political debate over the antipoverty group’s activities and recent efforts to distance the government from it. …

A Housing and Urban Development Department lawyer asked the Justice Department whether the new law meant that pre-existing contracts with Acorn should be broken. And in a memorandum signed Oct. 23 and posted online this week, Mr. Barron said the government should continue to make payments to Acorn as required by such contracts.

The new law “should not be read as directing or authorizing HUD to breach a pre-existing binding contractual obligation to make payments to Acorn or its affiliates, subsidiaries or allied organizations where doing so would give rise to contractual liability,” Mr. Barron wrote.

This is an interesting question, and the DoJ may not be wrong here.  On those relationships between ACORN and the government that are based on contracts, both parties have an obligation to meet the terms of the contracts.  Congress cannot arbitrarily abrogate existing contracts without cause; each contract would have to have been violated by ACORN in some manner to make each contract individually void.  The dissipation of its political favor can certainly keep ACORN from gaining any future contracts, but the existing contracts have to be honored.

What remains to be seen is whether these relationships actually were contractual, and what the contractual terms are in each instance.  Most government contracts have options to withdraw, usually within a reasonable but short period of time, with due notice.  Congress’ action this autumn should have been seen as a mandate to exercise those options.  If the money came from grants rather than contracts, then the termination of the relationships should be even easier.

The basic principle of law is that it binds the lawmakers as well as the governed.  If we are to enforce contractual law, then the federal government has to meet the same obligations as every other citizen in its contractual relationships.  Otherwise we encourage arbitrary despotism rather than the rule of law, and ACORN isn’t worth changing that basic fabric of the American system.  Let’s keep up the pressure on Congress to ensure that ACORN does not get any more contracts with federal agencies.  Congress certainly has that power, and can apply that now and in the future.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

signed by the President, it has the Power of the Constitution, not just Contract Law, behind it.

Are you all trying to say that Contract Law, overrides the Constitution?

Romeo13 on November 28, 2009 at 1:41 PM

What was signed by the president?

Itchee Dryback on November 28, 2009 at 2:21 PM

What act did former USAG Gonzales do to lose his position as the USAG? Was it for firing US DA’s? I’d have to ask now, what action by this USAG will measure up or warrent similar scrutiny?

Americannodash on November 28, 2009 at 1:48 PM

Amazing isn’t it? It seems like the sole reason for that was all the brow beating by the MSM press. Manufactured Dissent.

Itchee Dryback on November 28, 2009 at 2:27 PM

http://www.veteranoutrage.com

Wait a second:
Breaking existing contracts
Firing CEOS
Forcing new pay rules

Wait a second didnt all the God Damed Democraps
just do this to all of the banks and GM and Chrystler?

But now that their favorite pet communist activist / thugish group is being defunded suddendly

YOU cant break contracts?
BULLSHIT..

veteranoutrage on November 28, 2009 at 2:39 PM

“Honor” is probably the most inappropriate word that could be applied to any current federal agency… in any context!

If they wanted to “honor” something, how ’bout they start with our Constitution…

.

DenneyCrane on November 28, 2009 at 2:45 PM

Holder should be next to go. I hope Beck goes after him next.

nyx on November 28, 2009 at 2:48 PM

On those relationships between ACORN and the government that are based on contracts, both parties have an obligation to meet the terms of the contracts.

I want transparency regarding these so called “contracts”.
It would be awfully hard to believe that engaging in massive voter fraud,prostitution,and helping promote a child sex ring would not violate any normal contract set up by people with a double digit IQ.

Wait a second didnt all the God Damed Democraps
just do this to all of the banks and GM and Chrystler?

But now that their favorite pet communist activist / thugish group is being defunded suddendly

YOU cant break contracts?
BULLSHIT..

veteranoutrage on November 28, 2009 at 2:39 PM

Spot on!!!!

These were my thoughts exactly.
The Obama administration broke contract after contract in their dealings with the Banks and Car companies but now they all of a sudden have found Jesus.

What we have here is desperation by the democratic party that knows the only way they are going to stay in power is to have help in stealing elections with their number one criminal enterprise ACORN.

The anger towards this administration is mounting on a daily basis with democratic Senators and Congressmen looking worse and worse come 2010.

There only hope is probably massive voter fraud which Holder (who let the black panthers go for their voter intimidation) is doing his best to deliver to them.

“Yes We Can!!!”.

Baxter Greene on November 28, 2009 at 2:52 PM

I know a few people who had thier pensions in GM that are saying…

“What the fu%k?”

Seven Percent Solution on November 28, 2009 at 2:53 PM

In other related news, the administration has created or saved thousands of Acorn jobs – to be counted twice or thrice.

Fuquay Steve on November 28, 2009 at 2:59 PM

Itchee Dryback on November 28, 2009 at 2:08 PM

The content of a persons character be damned. Sotomajor & Holder’s confirmations were political correctness in action assisted by the MSM. The MSM are quite the facilitators of PC. The DNC and MSM give back scratchers to each other when ever gifts are exchanged. The democrat party uses the MSM like an American Express card. The democrats won’t leave home without it.

The MSM pledge: We, who have been college educated by liberal professors solemnly swear to cooperate with ….

Americannodash on November 28, 2009 at 2:59 PM

In other related news, the administration has created or saved thousands of Acorn jobs – to be counted twice or thrice.

Fuquay Steve on November 28, 2009 at 2:59 PM

Grim Humor. I likes.

nyx on November 28, 2009 at 3:04 PM

The MSM pledge: We, who have been college educated by liberal professors solemnly swear to cooperate with ….

Americannodash on November 28, 2009 at 2:59 PM

I agree, and oddly enough, the real blame for the abuses of power and audacious screwing of America that is happening, lie with the metrosexual effete elite of the media and celebrities. The dedicated ideological “soldiers” of leftist lies can at least be the recipients of misplaced and distorted respect for their tenacity….but the ones truly handing them success are these useful idiots of the MSM, and I have developed a hatred for these organizations.

Itchee Dryback on November 28, 2009 at 3:16 PM

As a Contracting Officer with a government agency, I can tell you that all government contracts (assuming it is a traditional contract executed under the Federal Acquisition Regulation, not an agreement, grant, or some other arrangement – I don’t work with those types of instruments) do have a Termination for the Government’s Convenience clause (or T4C as we call it for short). The T4C can be exercised at most any point in the contract, for no other reason than, as the name implies, our convenience.

But to me, the DOJ opinion (which I’ve only had time to skim) seems to imply that the question asked was whether payment could be made – for work that (presumably – although not entirely clear) was completed within the contract requirements. If we haven’t chosen to terminate a contractor for convenience, then we normally have an obligation to pay bills which are submitted for work that is completed (or for financing payments).

The opinion doesn’t state that the government cannot terminate ACORN – for Convenience or Default. Rather it only addresses the question of paying bills that are otherwise payable.

Nowhere does it state that the gov’t must “honor” (in the sense of, not terminate) ACORN contracts. As it notes, Congress could have clearly banned payment of existing obligations – but did not word the law clearly enough, apparently. Any agency with an ACORN contract could T4C now and avoid any future payments to ACORN, even if a bill already in hand still has to be paid.

84fiero on November 28, 2009 at 3:27 PM

Well, what could we expect out of Holder?

Rather than investigate ACORN’s illegal activities, he spends his time/money/effort investigating how to get them more of our money.

Pfffft.

jeanneb on November 28, 2009 at 3:43 PM

adds a new wrinkle to a sharp political debate over the antipoverty group’s activities

antipoverty group?

That’s a new one. Other than the crooks at the top, who have they lifted out of “poverty”

Are “bank robbers” also members of this antipoverty category?

DSchoen on November 28, 2009 at 4:08 PM

What remains to be seen is whether these relationships actually were contractual, and what the contractual terms are in each instance.

And in exacting detail, did ACORN fulfill its obligation each and every time, all documentation to back up each and every claim along with a complete detail account of all expenditures.

Bean counters got Al Capone, they can get ACORN.

DSchoen on November 28, 2009 at 4:10 PM

What was signed by the president?

Itchee Dryback on November 28, 2009 at 2:21 PM

The Bills to which these amendments which nailed ACORN were attatched to.

Romeo13 on November 28, 2009 at 4:13 PM

This story had better not be lost during the holiday weekend distraction. It is a critical continuation of the erosion of our Constitution and rule of law.

We cannot wait for the 2010 elections to push this issue (and other malfeasances of Holder’s DOJ) because if ACORN gets away with a reinstatement of its government funding through this twisted “justice,” then we will have a continuation and/or furtherance of this politicization of the law for Marxist social progressive ends of redistributing wealth.

onlineanalyst on November 28, 2009 at 4:15 PM

What act did former USAG Gonzales do to lose his position as the USAG? Was it for firing US DA’s?

There is nothing wrong with replacing political appointees with other political appointees for political reasons, or no reason at all!

Just ask Holder, after all he is a political appointee that replace another political appointee for political reasons.

DSchoen on November 28, 2009 at 4:25 PM

The government can’t constitutionally break existing contracts. However it gets more grey when Congress is one of the parties in the contract. That is, unless certain parties have engaged in obfuscation, fraud, and various other illegalities. It would be ACORN who has broken the terms of any and all contracts requiring federal funds by engaging in voter fraud and other convictions already on he books. Holder is either an idiot or subverting law. Not to mention halting further investigations into ACORN. and it’s also hypocritical tat the White House can break existing contracts between banks and their top level employees for bonuses, but wouldn’t dare do so when it hurts their allies.

chicagojedi on November 28, 2009 at 4:43 PM

This story had better not be lost during the holiday

weekend distraction. It is a critical continuation of the erosion of our Constitution and rule of law.

Prediction!

Starting next Monday “new” ACORN tapes will start being aired.

Will it be one new tape per day or every 3 days?

DSchoen on November 28, 2009 at 5:02 PM

And in exacting detail, did ACORN fulfill its obligation each and every time, all documentation to back up each and every claim along with a complete detail account of all expenditures.

Bean counters got Al Capone, they can get ACORN.

DSchoen on November 28, 2009 at 4:10 PM

Good point. Alinsky them. Make live up to the letter of their agreements.

Rule 4: Make opponents live up to their own book of rules. “You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity.”

Itchee Dryback on November 28, 2009 at 5:03 PM

The Justice Department has concluded that the Obama administration can lawfully pay the community group Acorn for services provided under contracts signed before Congress banned the government from providing money to the group.

Translation:
Obama political appointee/crony Holder, has determined Obama can give billions of our tax dollars to Obama flunkies who help get Obama elected despite many criminal convictions for fraud.

DSchoen on November 28, 2009 at 5:04 PM

Obama had no problem breaking the contract with Senior GM Bondholders and handing the lion’s share over to the unions.

Buy Danish on November 28, 2009 at 5:09 PM

The Bills to which these amendments which nailed ACORN were attatched to.

Romeo13 on November 28, 2009 at 4:13 PM

How is that the power of the Constitution and opposed to just authorizing an expenditure? Not sure what your point was.

Itchee Dryback on November 28, 2009 at 5:10 PM

If we are to enforce contractual law, then the federal government has to meet the same obligations as every other citizen in its contractual relationships. Otherwise we encourage arbitrary despotism rather than the rule of law, and ACORN isn’t worth changing that basic fabric of the American system.

You mean like when President Obama ignored the law in shoving aside prefered bondholders in favor of the UAW?

LFRGary on November 28, 2009 at 6:32 PM

As an attorney, let me assure you: Fraud vitiates all contracts. If Holder believes otherwise he knows even less about the law than I think he does.

Hucklebuck on November 28, 2009 at 6:33 PM

How is that the power of the Constitution and opposed to just authorizing an expenditure? Not sure what your point was.

Itchee Dryback on November 28, 2009 at 5:10 PM

Point being this is not “just” a law, but Congress using their Constitutional Power… one specificly granted them in the Constitution… ie, the power of the purse.

No Law can stop the Constitutional powers. If there is a conflict, the Constitution wins.

This is clearly (IMO) in Congress’s power… to fund, or STOP funding somthing as they wish. I see no provision in the Constitution thats says that contract LAW (enacted by Congress in fact, and then signed by some administration flunky) can trump the excercise of a Constitutional Power.

To me, the question is clear.

Romeo13 on November 28, 2009 at 6:39 PM

This is clearly (IMO) in Congress’s power… to fund, or STOP funding somthing as they wish. I see no provision in the Constitution thats says that contract LAW (enacted by Congress in fact, and then signed by some administration flunky) can trump the excercise of a Constitutional Power.

To me, the question is clear.

Romeo13 on November 28, 2009 at 6:39 PM

Sorry, to be more clear… I meant that contract law is written by Congress, and then the contracts themselves are signed by “some administration flunkys”.

Romeo13 on November 28, 2009 at 6:41 PM

Taken from ACORN’s website video’s at their Convention 2008 –

Openingly campaigning for Obama w/ our tax-dollars:

Part I
http://www.youtube.com/watch?v=H8Ep1tkNOUU

Part II
http://www.youtube.com/watch?v=625jUE78zjE

I don’t want my tax-dollars going to elect DemoRATS no more than I want them going to support killing babies.

Isn’t it fraud to claim you’re non-partison, yet only support the Dems, since they get money from ALL of us?

Annie on November 28, 2009 at 6:54 PM

Starting next Monday “new” ACORN tapes will start being aired.
DSchoen on November 28, 2009 at 5:02 PM

It could be a case of Holder wanting Breithart to show his hand early rather than at the elections?

Annie on November 28, 2009 at 6:58 PM

How does that line go about how evil is allowed to flourish when good men do nothing?

Guess that says a lot about people like Eric Holder and Jerry Brown, huh?

pilamaye on November 28, 2009 at 7:20 PM

What were the contractual obligations to the AIG CEO’s who were suppose to receive bonuses?

JellyToast on November 28, 2009 at 7:31 PM

“Does Congress have the authority to break contracts? Are you kiddin’ me? Didn’t stop anybody in the govt from breaking contracts with GM bondholders or compensation contracts with financial executives. The DOJ is a criminal enterprise.

Kissmygrits on November 28, 2009 at 8:10 PM

Romeo13 on November 28, 2009 at 6:39 PM

Thanks for the clarification. I wasn’t sure what you meant. I think I get your reasoning, and if I do, then I agree with you, The funding is from Congress, and Congress can void the agreement.

Itchee Dryback on November 28, 2009 at 8:53 PM

If they are giving our tax dollars to crooks, I think we should stop paying them. STARVE THEM. A million reasons not to fund Acorn….
http://biggovernment.com/

You need a theme song for this…Things that make you hmmm….
http://www.youtube.com/watch?v=0LRstMPlN2I

njpat on November 29, 2009 at 1:44 AM

Talk to the Indiana bondholders of Chrysler’s debt about breach of contract. They got the royal screwing from DOJ, Holder, and the court.

Bill R. on November 29, 2009 at 3:16 AM

ILLEGAL Contracts; I have 2 HUGE rolls of rope with Holder’s and Obamunist’s name on them and they are ITCHING to be used.

nelsonknows on November 29, 2009 at 3:22 AM

It could be a case of Holder wanting Breithart to show his hand early rather than at the elections?
Annie on November 28, 2009 at 6:58 PM

Hummm?
You may be right.

DSchoen on November 29, 2009 at 4:33 AM

From the NY Times article:

A Housing and Urban Development Department lawyer asked the Justice Department whether the new law meant that pre-existing contracts with Acorn should be broken. And in a memorandum signed Oct. 23 and posted online this week, Mr. Barron said the government should continue to make payments to Acorn as required by such contracts.
The new law “should not be read as directing or authorizing HUD to breach a pre-existing binding contractual obligation to make payments to Acorn or its affiliates, subsidiaries or allied organizations where doing so would give rise to contractual liability,” Mr. Barron wrote.

The question was in light of the law passed, not whether they had done anything wrong. The question was never can/should ACORN contracts be broken because they failed to deliver on any deliverables they said they would, or if they violated any other part of their contract.

84fiero spells it out clearly in his/her post.

Patriot Vet on November 29, 2009 at 10:07 AM

As a Contracting Officer with a government agency, I can tell you that all government contracts (assuming it is a traditional contract executed under the Federal Acquisition Regulation, not an agreement, grant, or some other arrangement – I don’t work with those types of instruments) do have a Termination for the Government’s Convenience clause (or T4C as we call it for short). The T4C can be exercised at most any point in the contract, for no other reason than, as the name implies, our convenience.

We need to pay attention to that post. 84fiero is exactly who he says he is – I’ve worked a lot of years in government and this is eactly how a contracting officer talks and they do drive weird cars. Also, he has the correct answer.

I worked things from the program side with COs and I have actually terminated contracts for convenience. At this point all the effected COs should be processing T4Cs on ACORN. Pay the bills, but close it down.

Cricket624 on November 30, 2009 at 7:45 AM

I have heard ACORN could get up to $8 Billion in pork, er stimulus, money so my guess is this ruling was done to ensure they still get that.

JeffinSac on November 30, 2009 at 7:46 AM

So these contracts must be honored? What about the GM share holders that got screwed? What about those “contracts”?

olesparkie on November 30, 2009 at 10:20 AM

Comment pages: 1 2