Unlikely Advocate
Look who’s talking about bad business practices.

January 29, 2002 8:30 a.m.

hile the president delivers his State of the Union address tonight, elsewhere in Washington, the Rev. Jesse Jackson's latest attempt at a political comeback will get underway. He's arriving in the capital today aboard a bus caravan of ex-Enron employees, who will watch the speech at a labor-union office. On Wednesday, Jackson intends to lead them in a protest rally at an as-yet-undetermined location. The media, no doubt, will be notified.

Now, let's grant that the poor souls who got ripped off by Enron certainly could use someone to advocate for them, but are they sure they want Jesse Jackson as their standard-bearer? This is like hiring teen-queen sexpot Britney Spears to upbraid Madonna for being too slutty.

"For somebody who has had problems for 20 years with bookkeeping and accounting practices, for him to raise the issue of Enron is shameless," says Ken Boehm, chairman of the National Legal and Policy Center, a Virginia-based research and advocacy group.

Boehm should know. Last year, NLPC filed an Internal Revenue Service complaint against Jackson and his not-for-profit Citizenship Education Foundation, charging that the various activities the organization sponsors violates its not-for-profit status under the tax code.

NLPC contended in its complaint that CEF's lucrative Wall Street Project "appears to be providing business services and facilitating transactions for a fee, which, if true, would seem to be a non-exempt purpose."

As was reported last year by the New York Post, the Chicago dailies, Fox News Channel, and almost nobody else, Jackson threatened to hold up several media mega-mergers on spurious racial grounds. When the companies involved made donations to at least one of his organizations, as well as provided business for his family members, friends, and contributors, Jackson's opposition evaporated.

Critics called the Wall Street Project a scheme by Jackson to leverage his moral standing as a civil-rights leader to make those in his inner circle rich. As I reported in my Post column, the tax-exempt CEF quintupled its revenue — from $2 million in 1998 to $9.7 million in 1999 — in the same year that Jackson signed off on the corporate mergers, all of which depended on the Federal Communications Commission for approval. The FCC was then headed by Jackson pal William Kennard.

This information was discovered on the CEF's publicly available tax returns, which upon inspection, turned out to have been incompetently executed. Whether there was intention to deceive is a matter of conjecture. There were glaring errors and omissions, including the salaries of CEF's top five paid employees. Under fire, Jackson's accountants tried to plug the gaping holes by filing an amended IRS Form 990 — and flopped a second time.

Wells Fargo Bank was listed as having made a $200,000 contribution. The bank said it had no record of that. Coors Brewing did not give $25,000 to CEF, as the tax form claimed, but to PUSH For Excellence, another Jackson entity. A $15,000 contribution credited to the New York City Board of Education had actually come from the Securities Industry Association. And so forth.

Jackson's CEF lied to the IRS once, and got caught. They lied a second time, and got caught. And so far, nothing has happened to them. As Bill O'Reilly used to say, "You try that."

Also last year, the American Conservative Union filed a complaint against Jackson with the Federal Election Commission, charging that tax-exempt funds from CEF's coffers were commingled with funds from Jackson groups that paid for political campaigning. "We've heard nothing from the FEC," ACU attorney Cleta Mitchell said on Monday.

None of this will be news to readers of the few print media outlets who covered it, or to viewers of The O'Reilly Factor. But many millions of Americans who will be watching Jackson on the network news attempting to redeem himself by going to bat for Enron workers will have no idea that credible allegations of corrupt business dealings have recently been made against Jackson — and to the best of anyone's knowledge, were never followed up on by government agencies charged with policing these matters.

"Maybe Enron should have used Jesse's accountants," said Mitchell. "I've never seen financial statements that were more bizarre than the ones from his enterprises, which are supposed to be charities. At least Enron didn't present itself as a charity."

It is assumed by many that Jackson has gotten a free pass from the IRS and the FEC because bureaucrats in those agencies don't want to be accused of racism. One grassroots conservative group was set to release a letter last year from several strongly conservative members of Congress, calling on the Feds to investigate Jackson's finances, but the congressmen bailed out at the last minute.

The Bush administration has done an exemplary job of marginalizing Jackson, who in December of 2000, denounced the president's election as "a coup d'etat," and who vowed revenge at the ballot box against both the president and his brother Jeb, the governor of Florida. Then Jackson was sidelined by revelations that he had fathered an illegitimate child. Months later, Jackson approached Alphonso Jackson [no relation], an African-American businessman from Texas and a friend of Bush's, asking him to use his influence to secure a Jackson meeting with Bush. Nothing came of it.

Yet Jackson-watchers were surprised two weeks ago when the name of Constance B. Newman, who oversees the U.S. Agency for International Development's Africa desk, spoke at the Wall Street Project's annual conference. Newman, whose boss at the agency is the brother-in-law of White House Chief of Staff Andrew Card, participated in a panel discussion about business opportunity in Africa. Did the White House approve Newman's appearance at a Jackson event, and if so, does this mean Bush is inching towards establishing a relationship with the increasingly irrelevant Jackson? The White House didn't return a call seeking comment.

What we do know is that starting today in Washington, a loudmouthed activist whose financial derring-do by rights should get him in serious trouble with government regulators, will attempt to relaunch his career by demagoguing the president on Enron. You don't have to have read Bernard Goldberg's book to know that the mainstream media are not likely to challenge Jackson on this. The more interesting question is this: How much Enron guff will congressional Republicans take from Jackson before demanding that the IRS and the FEC do their jobs?