Jesse came to do good and did well

Conflict: Is Jesse Jackson keeping hope alive for the downtrodden or merely making his friends and family rich?

March 18, 2001|By Peter Flaherty

"THIS BUD'S a Dud" was the Rev. Jesse L. Jackson's rallying cry during the 1980s against Anheuser-Busch, which he accused of racism for having few minority-owned distributorships. Today, all is apparently forgiven.

Two of Jackson's sons, Yusef and Jonathan, were granted a lucrative Anheuser-Busch distributorship in Chicago in 1998. This franchise gives the younger Jacksons exclusive rights to sell $30-$40 million worth of Budweiser and other products in an area that includes Wrigley Field. The brothers, who own 90 percent of the company, were 28 and 32 years old in 1998. Neither had any experience in the beer business. The remaining 10 percent is owned by a longtime Anheuser-Busch employee who apparently runs the company.

When asked about the deal at his boisterous March 8 news conference, Jackson said the questions amounted to "racial profiling" of his sons. He maintained that the distributorship was a "private business" and he would have nothing to say about it. In response to recent media inquiries, the distributorship has refused to disclose how many African-Americans it employs.

Jesse Jackson's charmed existence is over. The legion of journalists who attended his news conference grumbled as they filed out. CNN and Fox, which televised the event live, cut out early as Jackson spent the 90 minutes attacking his critics and ducking questions about his finances. The frustration of the press corps was reflected in the skeptical tone of the media coverage the next day.

By forfeiting his moral authority, Jackson now finds himself the subject of the same level of scrutiny faced by other public figures. He is not adjusting well. For sure, there is too little shame in our society. The hypocrisy of Jesse Jackson providing "spiritual counseling" to Bill Clinton while he carried on his own extramarital affair is too much, however, even by today's weak standards.

Questions about whether payments to the mother of his child were omitted from a tax form have exploded into a larger controversy over Jackson's personal and organizational finances. On Feb. 28, the National Legal and Policy Center, of which I am president, filed a formal complaint with the Internal Revenue Service against the Citizenship Education Fund, Jackson's largest nonprofit group. We argue that CEF is operating outside of its tax-exempt status.

CEF, whose board includes beer magnates Yusef and Jonathan, sponsors something called the Wall Street Project. Its ostensible goal is noble, to promote the economic empowerment of African-Americans through entrepreneurship. But CEF's critics say it merely shakes down corporate America and the beneficiaries are often Jackson's family and friends, many of whom are already wealthy.

The recent CBS-Viacom merger is a case in point. Viacom owns the UPN television network, an asset it will have to shed under federal regulations governing network ownership.

Jackson's solution is for Viacom to sell UPN to a minority businessman. He reportedly has already met with CBS Chairman Mel Karmazin with three qualified prospects in tow. The first was Percy Sutton of Inner City Broadcasting. According to Jackson's disclosure forms from his 1988 presidential run, his wife owned between $250,000 and $1 million worth of Inner City stock, an asset she reportedly still holds. The second was Chester Davenport, a longtime Jackson friend and CEF financial backer. The third was a Hispanic businessman whose relationship with Jackson is unclear.

It was a previous merger, detailed by the Chicago Sun-Times in February, that helped Chester Davenport become a very rich man. After first opposing the SBC Communications-Ameritech merger in 1998, Jackson supported it after Davenport's firm, Georgetown Partners, was cut in on the deal. To win approval of federal regulators, Ameritech sold half its wireless business to a GTE Corp.-led venture. Davenport reportedly put up $60 million for a 7 percent share in the new $3.3 billion company. He was even named chairman despite having no experience in the telecom business. According to a company spokesman, he would have "no operational responsibility." As a presumed sweetener, $500,000 was kicked in to CEF.

Because of the necessary approval of federal regulators friendly to Jackson during the Clinton administration, it is telecom and media mergers where Jackson has found the most fertile grounds for his tactics.

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