DoJ: Federal agencies must honor ACORN contracts

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.