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March 23, 2001

Je$$e Ja¢k$on — Shakedown 101

“Extort – tr.v. To obtain from another by coercion or intimidation.” (American Heritage Dictionary) “Extort: bully, intimidate, blackmail, hold up, squeeze, fleece, gouge, shakedown.” (Roget’s Thesaurus)

Jesse Jackson, the Left Reverend of PUSH (“SQUEEZE” some would argue), is on the run. The National Legal and Policy Center has filed a formal complaint with the IRS demanding a review and audit of his PUSH affiliate, the so-called “Citizen Education Fund,” alleging substantial irregularities, including Jackson’s use of this very profitable not-for-profit organization for “private inurement.” NLPC Chairman Peter Flaherty said: “By threatening boycotts and opposition to corporate mergers, Jesse Jackson has extracted millions of dollars from corporate America. In effect, he has been providing business services and facilitating business transactions for a fee, activities inconsistent with his group’s tax-exempt status.”

To wit, the Chicago Sun-Times reports that CEF quintupled its income from $2 million in 1998 to almost $10 million in 1999, much of that from large corporations seeking merger approval from the Federal Communications Commission – and Jesse Jackson.

For example, Jackson complained to the FCC, “[The SBC and Ameritech] proposed merger plan red lines residential customers.” Shortly thereafter, SBC and Ameritech gave $500,000 to CEF. Then Jackson endorsed the merger, proclaiming, “The merger is in the public interest.” FCC status: “Approved.”

Of the AT&T and TCI merger, Jackson complained about a “questionable employment record and a poor level of public service.” Shortly thereafter, AT&T sent CEF $425,000 and Jackson changed his tune. FCC status: “Approved.”

When CBS announced its intention to buy Viacom, Jackson howled – until Viacom pledged $680,000 to CEF. FCC status: “Approved.”

In the case of Bell Atlantic/GTE, Jackson complained to the FCC, “The Bell Atlantic/GTE plan must include a stronger commitment to internet and technology training targeted to the minority community.” Shortly thereafter, Bell Atlantic and GTE gave $1 million to CEF and provide Jackson crony Chester Davenport a 7% stake in the new $3.3 billion company for just $60 million. (You do the math.) FCC status: “Approved.”

Clearly the FCC, like many federal agencies, was little more than a political lapdog for Clinton-Gore. (Remember Franklin Haney, one of Mr. Gore’s longtime Tennessee “Kissin’ Cousins,” who paid Peter Knight, manager of Clinton-Gore ‘96, a $1 million fee the very day the General Services Administration approved the FCC’s revised lease for Haney’s building, upping its original $238 million 20 year contract to a $400 million 20 year contract.) But all the antics involving the FCC are a subject for another day.

Jackson explained his focus on mergers seeking approval from the FCC: “It’s where the biggest mergers took place. It’s where the most money was. It’s where the most opportunity was,” Jackson said.

The FCC routine is just the latest in Jackson’s long and sordid history of coercion, but not all of corporate America is playing his tune. T.J. Rodgers, CEO of Cypress Semiconductors, says: “The basic shakedown mechanism is, he declares racism based on dubious statistics. Then he gives you a chance to repent – and the basic way is to give Jesse money. The threat is you’ll be labeled a racist if you don’t.”

In addition to CEF and his associates, there are other beneficiaries of Jackson’s actions. In 1998, his sons, Yusef and Jonathan, obtained exclusive rights to distribute $30 million to $40 million in Anheuser-Busch products in Chicago’s North Side. (Anheuser-Busch was the target of an earlier Jackson boycott because it lacked minority distributors.)

The Jackson brothers refuse to release information about the number of minorities employed at their distributorship, leading Chicago Tribune columnist John Kass to ponder: “I could just imagine a business in the 1960s or 1970s refusing to disclose minority-hiring numbers when Jesse Jackson demanded them. The King of Beers (as Kass calls Jackson) would have screamed bloody murder and held boycotts and marches and issued bad rhymes.”

Anheuser-Busch, according to a Jackson news release, says the brothers are “exactly the kind of people we look for to be wholesalers representing our company in the community. They have the added advantage of being in the age demographic we describe as 'contemporary adults,’ the key beer-purchasing segment. This is a very strong management team.”

For sure, they have the “added advantage.”

Perhaps soon, Je$$e Ja¢k$on can join the ranks of other deposed politicos, teaching what he knows best – Shakedown 101 – maybe at Columbia University.

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