President Obama says there should be an investigation into the hidden-camera video involving employees at the activist group ACORN and a couple posing as a prostitute and her pimp.
The two ACORN workers are seen apparently advising the couple to lie about her profession and launder her earnings to get housing aid.
The video is only the latest problem for the group, which had nearly $1 million embezzled by its founder's brother and has been accused of voter registration fraud. The House and Senate voted last week to.
Mr. Obama told ABC's "This Week" in an interview broadcast Sunday that what he saw on the video "was certainly inappropriate and deserves to be investigated." But the president did not say who should investigate. And he said it is not a major national issue he pays much attention to.
"Frankly, it's not really something I've followed closely," Obama said. "I didn't even know that ACORN was getting a whole lot of federal money."
Asked about the president calling for an investigation, ACORN chief executive Bertha Lewis said Sunday, "Well, that's his opinion."
ACORN said last week it would order its own investigation of the video scandal. Lewis, who had promised to name an independent auditor by Friday, told "Fox News Sunday" that the announcement would take place Monday. She would not reveal the auditor.
Later Sunday, Lewis issued a statement saying, "We agree with President Obama's comments today that issues raised by the videos need to be investigated."
In the meantime, the group has suspended the admission of new clients to its housing program.
"Over the next several weeks, you will see us working triple time to get this review right so that we can refocus attention on ACORN's critical work for low- and moderate-income families," Lewis said in the statement.
The government is investigating ACORN's activities, though the scope of its activity is unknown. Voter registration fraud cases involving ACORN workers are pending. The Housing and Urban Development Department's inspector general has acknowledged an investigation is under way.
ACORN - short for the Association of Community Organizations for Reform Now - started in 1970 in Arkansas to help the poor and today is a national, multimillion-dollar conglomerate. ACORN's political action committee endorsed Obama for president, and his campaign paid an ACORN subsidiary $832,000 to help get out the vote.
Obama, himself a former community organizer, has long-standing ties to the group, which he represented in 1995 in a lawsuit against the state of Illinois over the "motor-voter" law.
The group's Democratic leanings and political work have made it a target of Republicans, who led the drive last week to deny it any further federal funds.
California Republican Rep. Darrell Issa, a member of the House Oversight and Government Reform Committee, pressed Lewis to reveal more about the group's operations.
"The bottom line is, there's no transparency in ACORN," said Issa, who also was on Fox.
"Here we have literally hundreds of organizations tied under the ACORN umbrella, and you can't even find out what their incorporation is, whether they pay taxes, who makes what," Issa said.
Lewis said she has made sure, since becoming chief executive last year, that affiliates have "firewalls" between them. "I've completely overhauled all of our finances, all of our controls," she said.
She also said founder Wade Rathke was fired immediately after it was discovered his brother, Dale, stole nearly $1 million from the organization nine years ago. In fact, Wade Rathke learned of the embezzlement in 2000, told only a few people but failed to report the embezzlement to law enforcement. An anonymous donor compensated the group for the missing money.