Follow the Money
OPPENHEIM, NOAH D.
Follow the Money Thee Jeessssee Jaccksson ssttorry BY NOAH D. OPPENHEIM On March 8, the Reverend Jesse Jackson held a press conference in Chicago. All the country's major newspapers sent...
...If Jackson's critics are right-wing extremists, is it right-wing extremism to question the respect Jackson continues to be afforded in our public life...
...One wonders how the value of that opportunity is reflected in quarterly reports...
...In May 1998, telecommunications firms SBC and Ameritech reported their desire to merge...
...Meanwhile, almost 2,000 of the original 13,000 minority plaintiffs in the Boeing suit formally protested to the court that the proposed settlement was inadequate...
...Jackson estimates he travels about 250 days a year, bringing his average daily expenses to about $2,500...
...Jackson himself does not shy from casting such aspersions when assailing his critics...
...His Citizenship Education Fund received $680,000 to organize two conferences...
...Besides the obvious waste to taxpayers, the KidCare case highlights the question: Who benefits from Jackson's exceptional ability to extract money from corporations and the government...
...Jackson met with Boeing head Phil Condit and reached a settlement in days...
...Of course, the cost of refusing to bow to Jackson can be quite real...
...At the very least, it would appear that Jackson does not stay at the Holiday Inn...
...When the saber-rattling was over, Inner City Broadcasting, operated by longtime Jackson friend Percy Sutton, bought nine of those stations in major cities...
...Sharpton and others prefer to shift the focus away from Jackson and toward the progressive causes he champions...
...Any investigation of these matters is made difficult by the complexity of Jackson's empire...
...While other groups were signing up thousands of children, PUSH signed up hardly any...
...Certainly Jackson's speech to the Democratic National Convention fit this description...
...While Jackson says he is working to tear down the walls of "economic apartheid," his tactics bring to mind an old-style protection racket...
...Inner City's Percy Sutton is similarly well-off...
...Some of Jackson's shakedowns: • In 1997, Viacom announced its intent to sell 10 radio stations to two other companies for $1.1 billion...
...Jackson's explanation for focusing on large telecommunications mergers: "It's where the most money was...
...No other organizations were allowed to bid for the work...
...In October 1999, Clear Channel Communications sought to merge with AMFM Inc...
...The tax-exempt status of these donations deserves emphasis...
...PUSH has been responsible for signing up only 151 families...
...For months, Jackson had been attacking governor George Ryan for his failure to increase KidCare participation...
...Jackson would eventually get around to offering his explanation—a simple accounting oversight, devoid of Noah D. Oppenheim is a writer in Washington, D.C...
...They were against us marching for the right to vote...
...Their stake, originally worth $10,000, is now worth between $850,000 and $1.2 million...
...George W. Bush, too, treats Jackson with deference, including him among the former presidents and other dignitaries he telephoned following the Supreme Court's decision in Bush v. Gore...
...Jackson declared the merger "fundamentally undemocratic" and proclaimed, "Consumers, workers, women, and people of color are being excluded and left behind...
...AT&T subsequently gave $425,000 to the Citizenship Education Fund...
...We already know what Jackson and his friends win...
...Thanks to the reporting of Tim Novak, Chuck Neubauer, and Abdon M. Pallasch in the Chicago Sun-Times and Eric Slater and Myron Levin in the Los Angeles Times in the past two months, a clear pattern can be traced in Jackson's dealings with corporate America: Under the guise of "civil rights activism," Jackson coerces companies into conducting business with his friends and, very often, donating large sums of money to his own organizations...
...And Reynolds explained his firm's meteoric rise: "A significant part of the access that we've enjoyed . . . has only been made possible through the tireless efforts of Reverend Jackson...
...In 1999, PUSH spent about $1.3 million on unidentified consultants...
...Since July 1, when PUSH received the grant, 37,000 children in Illinois have been signed up for KidCare...
...Jackson did not respond to requests for comment for this story, but his suspicious record-keeping is currently the subject of a complaint to the IRS filed by the American Conservative Union...
...All the country's major newspapers sent reporters, and all three cable news networks covered the event live...
...Negotiations had been going on for over a year...
...Jackson's complaints stopped as soon as the contract was awarded...
...Even more troubling than the apparent misuse of charitable dollars to conceal an extramarital affair are Jackson's "tireless efforts" on behalf of minority businessmen such as Reynolds...
...Utendahl has since donated tens of thousands of dollars to the Citizenship Education Fund...
...After negotiating with Jackson, Viacom and the two buyers set aside $2 million to "promote minority ownership of broadcast properties...
...We've been at business approximately three years...
...In a separate complaint filed recently with the Federal Election Commission, the American Conservative Union alleges that many of Jackson's public appearances last year were coordinated with the Gore-Lieberman campaign, and many involved explicit advocacy on behalf of Democratic candidates...
...Before singing Jackson's praises, Reynolds described how, after 20 years in the world of finance, he had founded his own firm...
...In January 1999, Jackson flew to Seattle, where thousands of Boeing employees had filed a racial discrimination lawsuit...
...He says the success of men like Davenport and Sutton inspires the entire community...
...All told, Jackson's charities currently take in approximately $15 million a year in tax-exempt donations, most of that money stemming from Jackson's intervention in corporate transactions, according to Slater and Levin's analysis of financial records released by the groups...
...Jackson and his allies argue his sizable income and expensive upkeep are beside the point...
...Not only is the shareholder being fleeced, but by extension the government is being robbed...
...This past summer, the state of Illinois awarded Jackson's Rainbow/PUSH Coalition $763,000 to enroll poor children in the KidCare health insurance program...
...Where did the money go...
...But, while PUSH purports to be a nonpartisan organization, there is ample indication that Jackson's message is no general call to civic involvement...
...In the following months, Boeing also directed hundreds of millions of dollars in pension funds to be managed by minority-owned banks, many with connections to Jackson...
...Jackson pays himself a salary of $120,000, and maintains a security detail that costs about $62,000...
...The most memorable of these character witnesses was Jim Reynolds, owner of Loop Capital Markets, a Chicago investment bank...
...And, while all other community groups in Illinois are paid $50 for every child they enroll, PUSH's money came in a lump sum with no strings attached...
...Perhaps worse is the potential damage to its reputation...
...Reynolds boasted of Loop, "We're the number one underwriter of public securities...
...Ameritech also sold a portion of its $3.3 billion cellular business to Jackson's friend Chester Davenport...
...The Democratic National Committee reimbursed PUSH for much of Jackson's travel during the election, belying the supposedly nonpartisan nature of his work and provoking concern that party soft money had been spent illegally on a political campaign...
...Jackson had promised to explain the byzantine finances of his nonprofit empire—in particular, the omission from tax forms of payments to employee Karin Stanford, the mother of his illegitimate child...
...Rather than threaten broken kneecaps, Jackson threatens boycotts and the stigma of being labeled racist by this country's most prominent black leader...
...impropriety"—but only after most TV networks had tuned out, apparently bored by the testimonials from a long parade of Jackson's friends...
...He also runs the political action committee Keep Hope Alive...
...The beneficiaries of his work are not the black underclass, or even the booming black middle class...
...He earns an additional $260,000 as a talk show host on CNN, and an undisclosed amount from speaking engagements...
...Blaylock gave $30,000...
...The grant was unusual in two respects...
...The merits of Jackson's crusade against "economic apartheid" are even more dubious...
...As their fight with Jackson dragged into the following year, SBC and Ameritech contributed $500,000 to his Citizenship Education Fund...
...But the justice of those causes is even less clear than PUSH's accounting methodology...
...He dropped his opposition after the companies hired Blaylock & Partners, a minority-owned investment bank, to float an $8 billion bond offering...
...He is nominally the head of several charities, including the Rainbow/PUSH Coalition, PUSH for Excellence, the Citizenship Education Fund, and People United...
...Jackson describes the purpose of his PUSH travel as "voter education [and] voter registration...
...Jackson also claims that forcing companies to do business with minorities is "a win-win situation...
...Jackson dropped his opposition to the deal...
...Jackson raised concerns about the merger, arguing that minorities should be able to buy any radio stations made available if the deal materialized...
...Jackson has claimed the $763,000 his organization received from Illinois was necessary to pay a staff of "maybe two or three," travel costs, and overhead...
...To cite just one inconsistency among many: On a 1999 form, Jackson is listed as president of the Citizenship Education Fund...
...Still, some facts can be ascertained, even beyond the $35,000 that the Citizenship Education Fund paid to Jackson's mistress as part of a severance and relocation package...
...Over and above the apparently generous per diem he allows himself while on the road, Jackson estimates that his income approaches $430,000 a year...
...And Bush (like Bill Clinton, Barbra Streisand, Jerry Falwell, and other notables) called Jackson with words of encouragement after his affair was reported...
...Also in 1999, Jackson agitated against the merger of AT&T and TCI...
...Boycotts can hurt a company's bottom line...
...Against the objections of his top financial officers, Enrico gave in to Jackson at the last minute, naming Utendahl Capital Markets as co-managers of the offering...
...It's less obvious what's in it for the companies...
...In May 1999, the Pepsi Bottling Group was preparing a $2.3 billion public offering...
...The Reverend Al Sharpton recently lectured a critic, "It is legal for Reverend Jackson to be paid...
...They were against us marching for open housing...
...The state might have achieved the same result by paying another group just $7,550, a savings of about 99 percent...
...Why such men deserved the support of a civil rights group remains a mystery...
...After receiving Jackson's endorsement in last year's presidential election, Vice President Al Gore declared it "a high honor" to have earned the confidence of "a true national leader...
...Slavery's against the law, sir...
...Jackson and his wife Jacqueline are part-owners of Inner City...
...Chester Davenport, who was given a piece of the SBC-Ameritech merger, was already worth close to $100 million when Jackson encouraged his inclusion...
...Questions have arisen about more than the personal embarrassment that originally sparked the public's interest...
...Jackson pressured Pepsico CEO Roger Enrico to involve a minority-owned investment bank in the transaction...
...At his March 9 press conference, he lashed out at those concerned about the mismanagement of his charities: "These groups—they were against us marching for public accommodations...
...Soon thereafter, Jackson pronounced the merger "in the public interest...
...Yet all the politicians' groveling cannot hide from the rest of us that Jackson is really a talented extortionist, debasing the cause for which he claims to fight...
...Rodgers, CEO of Cypress Semiconductors, disputed Jackson's suggestion that Silicon Valley was a bastion of racism, a Jackson-allied group announced, "We can now officially describe Cypress Semiconductor as a white supremacist hate group...
...And what of the millions each year Jackson reaps by leaning on American business...
...When asked why Davenport was included in the sale of Ameritech's cellular business, a company spokesperson explained, "Primarily they brought to the table the opportunity for us to do business with a minority firm...
...on another form for the same year, he is omitted from a list of the group's officers...
...It seems fair to say that Illinois's poor kids gained little...
...When T.J...
...There are indications that funds are often transferred between the nonprofits, but their IRS filings are egregiously sloppy, making their precise workings difficult to pin down...
...Of course, Jackson's raids on the public coffers are not always so indirect...
...They are fundamentally extremist, right-wing groups...
...Jackson's Rainbow/PUSH coalition filed a petition with the FCC, seeking to block the deal...
...Toward what good works do his organizations direct those funds...
...Less than a week later, Boeing made a $50,000 donation to the Citizenship Education Fund—the first of several...
...in this city and state...
...They were against us fighting to free Mandela in South Africa...
...In the weeks since his press conference, Jackson's dealings have come under heightened scrutiny...
...One of PUSH's largest expenditures is for travel—particularly for Jackson, who personally spent $614,000 jetting around the country in the year 2000...
...Still, he insists, "We've always made the choice to live rather modestly...
...But records examined by the Sun-Times indicate most of PUSH's KidCare outreach efforts were integrated into regularly scheduled events held at the organization's headquarters...
Vol. 6 • April 2001 • No. 28
