WASHINGTON—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 anti-poverty group's activities and recent efforts to distance the government from it.

Since 1994, ACORN, which stands for the Association of Community Organizations for Reform Now, has received about $53 million in federal aid, much of it grants from the Department of Housing and Urban Development for providing various services related to affordable housing.

But the group has become a prime target for conservative critics, and on Oct. 1, President Barack Obama signed into law a spending bill that included a provision that said no taxpayer money—including money authorized by previous legislation—could be “;provided to”; the group or its affiliates.

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, 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,”; Barron wrote.

The deputy director of national operations for ACORN, Brian Kettenring, praised Barron's decision. “;We are pleased that commitments will be honored relative to ACORN's work to help keep America's working families facing foreclosure in their homes,”; Kettenring said.

Barron said he had based his conclusion on the statute's phrase “;provided to.”; This phrase, he said, has no clearly defined meaning in the realm of government spending—unlike words like “;obligate”; and “;expend.”;

Citing dictionary and thesaurus entries, he said “;provided to”; could be interpreted as meaning only instances in which an official was making “;discretionary choices”; about whether to give the group money, rather than instances in which the transfer of money to ACORN was required to satisfy contractual obligations.

Since there are two possible ways to construe the term “;provided to,”; Barron wrote, it makes sense to pick the interpretation that allows the government to avoid breaching contracts.

Moreover, he argued, requiring the government to cancel contracts with a specifically named entity—“;including even in cases where performance has already been completed but payment has not been rendered”;—would raise constitutional concerns best avoided by interpreting the law differently.

The Constitution prohibits “;bills of attainder”;—legislation intended to punish specific people or groups. ACORN has filed a lawsuit arguing that the statute banning the government from providing it money amounts to a bill of attainder.

Founded in Arkansas in 1970, ACORN describes itself as the nation's largest grass-roots community organizing group. It provides financial services to poor and middle-income families, conducts voter registration drives, and advocates for higher minimum wages and more affordable housing.

Conservatives have long complained about ACORN's voter drives in poor neighborhoods, citing instances in which workers fraudulently registered imaginary voters like Mickey Mouse. ACORN has argued that it is the real victim of such incidents, which its employees have often brought to the attention of the authorities.

Criticism of ACORN escalated in September, when two conservative activists released videos they had recorded using secret cameras of ACORN workers in several cities. The activists had posed as a pimp and a prostitute seeking financial advice. Instead of raising objections, the ACORN employees counseled the couple on how to hide their illicit activities and avoid paying taxes.

Conservatives seized on the videos to criticize the group further, highlighting that the Obama campaign had paid an ACORN affiliate for get-out-the-vote efforts. Congress then enacted the ban on providing money to it.

ACORN has fired several of the employees depicted in the videos.