updated 12/7/2009 1:43:01 PM ET 2009-12-07T18:43:01

An internal investigation of the community-organizing group ACORN concluded there was no criminal conduct by employees caught on videos offering advice on how to hide assets and falsify lending documents.

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The report, which ACORN's CEO described as "part vindication, part constructive criticism and complete roadmap for the future," was unlikely to stem continuing political criticisms of the group and its efforts.

In a 47-page assessment that former Massachusetts Attorney General Scott Harshbarger was commissioned by the organization to do, he said ACORN leaders "appear committed to effect reform and are on their way to preserving ACORN and its mission in a reduced size and scope."

Harshbarger's report says ACORN, which stands for the Association of Community Organizers for Reform Now, should return to its roots, focusing on community organizing and should hire an independent ethics officer to oversee an internal governance program that is already under way.

The report, the product of a two-month investigation, said that ACORN's management had not moved fast enough to institute reforms after an alleged eight-year cover up by ACORN founder Wade Rathke of an embezzlement by his brother.

ACORN's leaders are "now reaping what Rathke sowed," wrote Harshbarger.

The organization's leadership has made reforms in finances and governance a priority, the Harshbarger report stated. However, it added, this focus has not yet been matched by similar attention to delivering services to ACORN's clients.

The videos of ACORN staffers offering advice to a woman and a man posing as a prostitute and her boyfriend triggered a firestorm of criticism this fall, with some ACORN employees appearing willing to support illegal schemes involving tax advice, misuse of public funds and illegal trafficking in children.

The videos "feed the impression that ACORN believes it is above the law," stated the Harshbarger report, intended as an independent examination of the issues.

"We did not find a pattern of intentional, illegal conduct by ACORN staff involved; in fact, no action, illegal or otherwise, was ever taken by any ACORN employee on behalf of the videographers," Harshbarger said in a statement. "Instead, the videos represent the byproduct of ACORN's longstanding management weaknesses, including a lack of training, a lack of procedures and a lack of onsite supervision."

In an interview with reporters, Harshbarger said some of the behavior was inappropriate, but said there is a difference between behaving unprofessionally and behaving illegally. The examination "did not find any illegal conduct by ACORN staff," Harshbarger said.

First ReadACORN CEO Bertha Lewis said Harshbarger "was tough but fair in examining where ACORN has been and what we still need to accomplish in having the most effective possible organization to represent the interests of the communities we represent — low- and moderate-income, African-American and Latino families."

Asked how much ACORN paid Harshbarger's law firm to conduct the examination, Lewis said the ACORN board was the entity that would have to decide on whether to release such a figure.

"How surprising is it that a report paid for by ACORN exonerates them?" Rep. Darrell Issa of California, the ranking Republican on the House Oversight & Government Reform Committee, said in a statement.

Until this fall's controversy over the videos, 10 percent of ACORN's funds came from federal government grants. In September, Congress blocked previously approved funds from going to ACORN.

"In barring ACORN from competing for federal contracts when no lawbreaking had occurred, Congress rushed to judgment and violated fundamental constitutional rights," said Nan Aron, president of the liberal Alliance for Justice.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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