Jackson Defends Finances

The Rev. Jesse Jackson today defended his financial dealings, explained the creative financing of one of his non-profit civil rights groups and tagged his critics as "right wing extremists."

Under fire from a Virginia-based group that has filed a complaint with the IRS alleging Jackson has used his various non-profit organizations to illegally enrich himself, his family and his friends, Jackson today released an internal audit of his organizations.

For the first time, the audit outlines the web of finances for his group. And at a news conference in Chicago this morning, Jackson acknowledged he should not have omitted his mistress from tax returns. Jackson announced he will amend his Citizen Education Fund's 1999 tax records to list Rainbow/PUSH staffer Karin Stanford, with whom he fathered a child outside his marriage.

The names of Stanford and other staffers were left off the filings, Jackson claims inadvertently.

"There is no evidence that there is any inconsistency or impropriety," Jackson said.

As the tax-exempt arm of Rainbow/PUSH, CEF must file extensive disclosure on its financial activities with the IRS.

Though Stanford made over $120,000 a year in 1999, she was not listed as required on state and federal tax forms that require the listing of key employees who earn more than $50,000. Jackson's finances came under scrutiny in January when the reverend acknowledged Rainbow/PUSH paid a $35,000 severance package to the mistress.

Billy Owens, chief financial officer for Rainbow/Push, said, "It was an oversight and it's in the process in being corrected."

The National Legal Policy Center, a foundation that tries to root out corruption in labor unions and Democratic groups, has filed a complaint with the IRS over the matter and said Jackson's disclosure falls short.

"This report is inadequate," NLPC President Peter Flaherty said in a prepared statement. "It is not an independent audit. Billy Owens, who compiled the report, works for Jesse Jackson. We believe that an audit by the IRS is warranted. It is time for a real audit, not a public relations offensive."

Flaherty's complaint alleges Jackson has threatened major U.S. corporations with boycotts and opposition to mergers to pressure them to contribute to his organizations and support projects that financially benefit his friends and family members.

At his news conference today, Jackson railed against the NLPC as "fundamentally an extremist right-wing group" that is out to "disrupt, discredit and destroy" efforts to make progress on civil rights.

"Of course they are friends," he said. "But that's not the basis for getting business. They get that because they're qualified."

Among the examples of strong-arm tactics the conservative group cites, Jackson dropped plans to boycott Anheuser-Busch only after two of his sons were awarded a beer distributorship. Jackson dismissed the charge.

"It's their business," he said. "I should not answer any of their business. I am proud of them."

And while Jackson denies that he tailors his criticism of corporate America according to the size of their donations to his organizations, the record raises questions. In 1998, for example, he lobbied against the merger of Bell Atlantic and GTE, saying they were an "apartheid system" of telecommunications. But after a 1999 donation of $1 million to CEF, Jackson applauded the proposed deal as a way to "deliver the benefits of growth in the telecommunication industry."

"Let the critics try to discredit us," Jackson said today. "Our record is one of discipline, dignity, integrity and results."