|
Feds drop criminal probe of Rev. Al Sharpton's finances
New York Daily News Cover Story By Errol Louis, Tuesday, July 22nd 2008
Federal prosecutors have dropped their criminal probe of fiscal irregularities and tax fraud by the Rev. Al Sharpton and his National Action Network.
Lawyers for the civil rights activist said that means Sharpton's tax tangle won't result in an indictment or jail time, or even an appearance before a grand jury, though he's agreed to pay millions in back taxes. It also means the feds aren't pursuing allegations the civil rights leader extorted contributions from corporations in exchange for not protesting against them.
Prosecutors would not comment, but law enforcement sources confirmed that the criminal probe is over. Bottom line: Sharpton gets a huge, hearty laugh at the expense of his large and vocal chorus of critics and accusers. And a dozen current and former aides to Sharpton who got slapped with subpoenas - some at 6 a.m. - can now breathe easy.
While all criminal investigations are over, Sharpton and the National Action Network (NAN) have agreed to a tax settlement of between $2 million and $9 million.
Prosecutors turned the matter over to the IRS, which is still calculating what it believes Sharpton and his organization owe. The government has agreed to let Sharpton pay it off over a period of months or years.
"According to the government, Rev. Sharpton individually owed in excess of $1 million and NAN owed in excess of $1 million, over 50% of which was penalties in both cases," said Michael Hardy, Sharpton's longtime lawyer.
Legal bills related to the long-running case total another $2 million, Hardy said.
"Rev. Sharpton, his business entities and NAN have already deposited a substantial sum as an initial payment of these outstanding federal tax obligations," said Zachary Carter, another Sharpton lawyer, who used to run the same U.S. attorney's office in Brooklyn that launched the probe of Sharpton.
Sources estimated that Sharpton has shelled out $1 million to the IRS and will eventually have to fork over millions more.
"The U.S. attorney's office, after doing an investigation, came to the conclusion that this was most appropriate for a civil resolution," Carter said. One way or another, he'll have the money to make good on the debt.
None of NAN's corporate supporters, including name brands like Wal-Mart, Pepsi and Colgate, has stopped supporting the group, Hardy said. And while critics are fond of calling Sharpton an ambulance chaser who somehow makes money by speaking out on hot-button issues like police brutality and racial profiling, the truth is that his sources of personal income are fairly straightforward.
Sharpton hosts a syndicated daily radio show heard in 40 markets nationwide, as well as a weekly TV show and regular (paid) appearances on the "Tom Joyner Morning Show."
The media gigs pay him a combined salary of $750,000 a year. He also earns royalties on his two books and lecture fees of $15,000 to $20,000 a shot, along with amounts in the $2,000 range for giving sermons at churches around the nation - often, two on any given Sunday. In other words, Sharpton can easily take home close to a million a year - and often plows his earnings into his civil rights group, making loans and donations to NAN.
All the shifting money caused an unholy fiscal mess, particularly in recent years after a fire destroyed NAN's records. The group fell behind on submitting payroll taxes, raising red flags with the authorities, Hardy said.
Operating as he does with one eye on the history books, Sharpton knows he will always get scrutiny and never get the benefit of the doubt from the government he criticizes for a living.
He would be well-served to use this expensive close encounter with the feds as a wakeup call and hire as many accountants, lawyers and managers as it takes to keep himself and his organization out of trouble.
With John Marzulli
|
Hear Reverend Sharpton Live