- The Washington Times - Tuesday, March 13, 2001

With the Rev. Jesse Jackson, it's always "an oversight" or merely an "accounting" problem. When Mr. Jackson was running for the Democratic presidential nomination in 1984 and 1988, he would blithely dismiss media inquiries about his problems with the IRS over nearly $2 million in highly questionable expenditures involving taxpayer-supplied government grants. Just an "accounting dispute," Mr. Jackson would cavalierly reply. During Thursday's rather surreal 90-minute press conference, which Mr. Jackson ostensibly called to answer new questions about the questionable accounting practices of his various organizations, Mr. Jackson described a serious omission on a tax return of one of his nonprofit, tax-exempt organizations as merely "an oversight."

An oversight? Even coming from the self-appointed expert on Jewish influence in New York, that is some chutzpah. In its 1999 tax return, the so-called Citizenship Education Fund (CEF), one of Mr. Jackson's tax-exempt organization, answered "NONE" in the section requiring it to list the names of the employees who earned at least $50,000 that year. It so happens that Mr. Jackson was paying Karin Stanford an annual salary of $120,000 that year before she went to California in September, after which she was paid nearly $40,000 by CEF in questionable payments for "employee reimbursement" and "consulting services." To say the least, Miss Stanford was not a run-of-the-mill nonprofit staffer. She was CEF's executive director, with whom Mr. Jackson fathered an out-of-wedlock child in 1999 during a relationship the reverend had been conducting for some time with an employee 20 years his junior. An oversight?

CEF will be filing an amended return with the IRS, but that should hardly be the end of it. Indeed, the National Legal and Policy Center (NLPC), a Virginia-based public-interest watchdog group, has filed a complaint with the IRS charging that CEF has committed "apparent violations of the requirements for tax-exempt status." As NLPC chairman Peter Flaherty explained to Jerry Seper of The Washington Times, "Paying off a mistress is not a legitimate use of the assets of a tax-exempt group." Moreover, as the 26-page complaint exhaustively details (www.nlpc.org), CEF seems to operate "more like a fee-for-service consulting business rather than a charitable/educational organization." The complaint itemizes six specific business services CEF provides, all of which relate to Mr. Jackson's rather unique modus operandi. In recent years, he has been extracting sizable "donations" from large corporations whose merger aspirations subsequently receive Mr. Jackson's blessings. Cynics have compared this negotiating process to a crude shakedown operation.

The CEF and other Jackson-controlled organizations apparently have other legal problems as well. Various national Democratic campaign committees have been underwriting Mr. Jackson's political travel expenses in what could well be a violation of federal law. Mr. Jackson's chief financial officer recently acknowledged that these Democratic committees last year paid more than $450,000 of Mr. Jackson's $614,000 travel expenses, which were directly related to political advocacy. As Cleta Mitchell, a D.C. attorney who is preparing a complaint by the American Conservative Union (ACU) with the Federal Election Commission (FEC) against Mr. Jackson's organizations, explained to The Washington Times, "It is against the law for a corporation, nonprofit or for-profit, to spend corporate treasury funds for voter registration in behalf of a political party." Explaining why his organization is filing a supplemental complaint with the IRS, ACU Chairman David Keene argued, "If any of [Democratic]-reimbursed travel was paid for by a [501]c3 charitable organization, that is a prima facie violation of the tax code, and the [501]c3 charitable status must be revoked by the IRS."

The recent revelations regarding Mr. Jackson's financial shenanigans surely exceed the level of mere "oversight" and "accounting disputes," as he has always reflexively characterized them. And no, it isn't about the reverend's sexual romps. It's about whether taxpayers should subsidize his extramarital adventures and political operations. Both the IRS and the FEC owe Mr. Jackson a visit. And soon.

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