Jackson Defends Finances

ByABC News
March 8, 2001, 11:39 AM

C H I C A G O, March 8 -- 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."