Sharpton’s Million Dollar Shakedown Racket

From the inimitable New York Post:

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REV. AL SOAKS UP BOYCOTT BUCKS

BIZ GIANTS PAY OR FACE RACE RALLIES

By ISABEL VINCENT and SUSAN EDELMAN

June 15, 2008 — Anheuser-Busch gave him six figures, Colgate-Palmolive shelled out $50,000 and Macy’s and Pfizer have contributed thousands to the Rev. Al Sharpton’s charity.

Almost 50 companies - including PepsiCo, General Motors, Wal-Mart, FedEx, Continental Airlines, Johnson & Johnson and Chase - and some labor unions sponsored Sharpton’s National Action Network annual conference in April.

Terrified of negative publicity, fearful of a consumer boycott or eager to make nice with the civil-rights activist, CEOs write checks, critics say, to NAN and Sharpton - who brandishes the buying power of African-American consumers. In some cases, they hire him as a consultant.

The cash flows even as the US Attorney’s Office in Brooklyn has been conducting a grand-jury investigation of NAN’s finances.

A General Motors spokesman told The Post that NAN had repeatedly - and unsuccessfully - asked for contributions for six years, beginning in August 2000.

Then, in December 2006, Sharpton threatened to call a boycott of the carmaker over the closing of an African-American-owned GM dealership in The Bronx, and he picketed outside GM headquarters on Fifth Avenue.

Last year, General Motors gave NAN a $5,000 donation. It gave $5,000 more this year, a spokesman said, calling NAN a "worthy" organization.

In November 2003, Sharpton picketed DaimlerChrysler’s Chicago car show and threatened a boycott over alleged racial bias in car loans.

"This is institutional racism," he bellowed.

In May 2004, Chrysler began supporting NAN’s conferences, which include panels on corporate responsibility and civil rights and a black-tie awards dinner to honor Martin Luther King Jr. Last year, Sharpton gave Chrysler an award for corporate excellence.

In 2003, Sharpton targeted American Honda for not hiring enough African-Americans in management.

"We support those that support us," wrote Sharpton and the Rev. Horace Sheffield III, president of NAN’s Michigan chapter, in a letter to American Honda. "We cannot be silent while African-Americans spend hard-earned dollars with a company that does not hire, promote or do business with us in a statistically significant manner."

Two months after American Honda execs met with Sharpton, the carmaker began to sponsor NAN’s events - and continues to pay "a modest amount" each year, a spokesman said.

"I think this is quite clearly a shakedown operation," said Peter Flaherty, president of the National Legal and Policy Center in Virginia, a conservative corporate watchdog. "He’s good at harassing people and making noise. CEOs give him his way because it is a lot easier than confronting him."

Sharpton denies his organization pressures corporations for cash.

"That’s the old shakedown theory that the anti-civil-rights forces have used against us forever," he told The Post yesterday. "Why can’t they come up with one company that says that? No one has criticized me." …

NAN, a tax-exempt nonprofit, closely guards its corporate largesse. Most companies also keep the sums secret, and some would not divulge them. The corporations interviewed by The Post viewed their relationships with NAN as friendly and beneficial.

Anheuser-Busch states on its Web site that it gave the group "between $100,000 and $499,000" last year.

Last year, Attorney General Andrew Cuomo found NAN had failed to file years’ worth of financial reports. The group has filed more records, but the AG’s office said it won’t release them pending the US attorney’s probe.

In its 2006 IRS filing, the latest available, NAN reported about $1 million in contributions and $1.1 million in expenses and programs. It owes the IRS $1.9 million in payroll taxes, The Post has learned.

A NAN spokesman said the group is cooperating with authorities "to pay whatever obligations it owes and continues to do so."

What a shock. Apparently the laws against extortion have been repealed for high profile race hustlers like Messrs. Sharpton and Jackson.

And not only that, it is tax exempt!

We were inspired by the New York Post article to take a look at Mr. Sharpton’s organization.

Here is how Mr. Sharpton describes his National Action Network to the IRS, via Guidestar:

MISSION AND PROGRAMS

THE NATIONAL ACTION NETWORK IS A (CHRISTIAN) ACTIVIST ORGANIZATION WEDDED TO THE PRINCIPLES OF THE NONVIOLENT PHILOSOPHY AND METHODOLOGY OF MARTIN LUTHER KING, JR. AND ARE COMMITTED TO THE TASK OF THE LIBERATION FOR ALL OPPRESSED PEOPLES.

1. NATIONAL ACTION NETWORK - CRISIS OUTREACH AND COMMUNITY PROGRAMS DESIGNED TO CHAMPION THE CAUSE OF PEOPLE OF COLOR ON REGIONAL POLITICAL AND SOCIAL ISSUES.

2. THE MADISON AVENUE INITIATIVE - CONDUCTED MEETINGS WITH THE CEO’S AND TOP DECISION MAKERS OF SEVERAL OF THE NATION’S LEADING CONSUMER PRODUCT COMPANIES WHO, BASED ON MINORITY CONSUMPTION FIGURES, DO NOT SPEND ADEQUATE DOLLARS ON MINORITY MEDIA. BASED ON THE MEETINGS AND A REVIEW PROCESS, PUBLISHED A RATING OF COMPANIES IN MAI NEWSLETTER & WEB SITE.

And here is the modest sum NAN collected in just the 2006, according to its form 990 (a pdf file):

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That’s right. Mr. Sharpton made $1,050.740.00 in 2006 alone from just this one organization.

And if we are reading the form 990 right, NAN managed to spend more than that on salaries ($527,633) and consulting fees ($530,574):

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Mr. Sharpton is the only employee listed on the form.

The National Action Network lists itself as a 501c4, which according to the US Code and Wikipedia is not supposed to be for the benefit of any private individual:

501(c)(4)

501(c)(4) exemptions are given to civic leagues or organizations not organized for profit and operated exclusively for the promotion of social welfare, or local associations of employees. Net earnings are devoted exclusively to charitable, educational, or recreational purposes.

The exemption applies so long as "…no part of the net earnings of such entity inures to the benefit of any private shareholder or individual."

And yet almost all of the money NAN collects goes to "salaries" and "consulting fees."

Which sounds like a lot of inuring to the benefit of someone — most likely Mr. Sharpton.

Also please note that out of the $1,050.740.00 taken in 2006, the National Action Network gave only $1,000 to charity.

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