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Accounting
Changes may Signal Financial Troubles
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By Marc Morano
CNSNews.com Senior Staff Writer
February 21, 2002
(CNSNews.com) - A major accounting change at one of Jesse Jackson's affiliates
may provide more evidence of financial difficulties at his
Rainbow/PUSH Coalition, according to a longtime Jackson
observer.
Jackson's move from fiscal year to calendar year accounting at
his International Trade Bureau comes at a time when former
business associates and friends are also wondering whether
Jackson has lost his "moral authority" as a civil
rights leader.
According to a Feb. 11, 2002 fundraising letter signed by
Jackson and obtained by CNSNews.com, Jackson outlines
the changes for members of the International Trade Bureau.
"As of the close of 2001, all Trade Bureau memberships
became due for renewal. We have transitioned annual membership
renewal from a fiscal year to a calendar year basis, so please
submit your membership renewal today."
According to Ken Boehm, chairman of the National Legal and
Policy Center, "it appears that Jackson is trying to
change the rules of his group to make up for financial
shortfalls he's experiencing." Boehm's legal watchdog
group filed a formal complaint regarding Jackson's finances
with the IRS last year.
CNSNews.com exclusively reported last month that
Jackson was forced to lay off more than 50 employees in 2001,
more than half his workforce because of disappointing
fund-raising. Boehm stated that switching from a fiscal year
to a calendar year "usually does not happen unless there
is a compelling reason." He added, "It's a
fund-raising move. It may be that his financial crisis is
dictating this."
Nizam Arain, spokesman for Rainbow/PUSH in Chicago told CNSNEWS.com
that he was "unable to get a clear answer" as to why
Jackson made the switch.
Other signs that Jackson is struggling were evident at his
annual Wall Street Project in January in New York. According
to the New York Daily News, "Kenneth Chenault, chairman
of American Express; Stanley O'Neal, president of Merrill
Lynch, and AOL Time Warner bigshot Richard Parsons - arguably
the three top black executives in America - didn't attend.
Neither did [N.Y] Gov. [George] Pataki or [New York City]
Mayor [Michael] Bloomberg."
A Wall Street banker, speaking to CNSNews.com last
month on condition of anonymity, said "[Jackson's] money
is drying up, the Wall Street Project is tanking. He is
reeling."
David Wallace, a Christian minister who attended Chicago
Theological Seminary with Jackson in the 1960s, also said he
is not surprised Jackson is in financial difficulty.
Wallace, one of the founding members of Rainbow/PUSH in the
1970s, said he last saw Jackson at Rainbow/PUSH headquarters
in Chicago last October and that Jackson was not upbeat.
According to Wallace, Jackson "did comment to me that
'this year has been a rough year.'"
"The extra-marital affair and baby forfeited Jackson's
moral leadership," Wallace said, a reference to Jackson's
acknowledged affair with a former employee and the
out-of-wedlock child that the affair produced. "That is
not the behavior of a Christian minister," Wallace said.
Membership Has Its Privileges
Jackson's fundraising letter to dues paying members of the
International Trade Bureau boasts that by supporting his
efforts, minority businesses will enable Jackson to arrange
"meetings with the CEOs of major corporations (e.g.,
Coca-Cola, Burger King, Toyota, AT&T; Sodexho, Bank One,
Safeway, etc.) and bring to the table contracting
opportunities for our Trade Bureau members."
Jackson adds, "We value and need your support."
Boehm commented, "It clearly sounds as though Jackson is
doing exactly what his critics have charged him with. He's
charging minority businesses to get business opportunities
with corporations. Same Jackson M.O. - shake down big business
and then minority businesses."
Last year, Jackson pressured Toyota Motor Sales USA with the
threat of a boycott over an ad he deemed offensive to
minorities. Toyota responded by agreeing to devote $700
million per year to minority contractors as part of its
"21st Century Diversity Strategy."
Jackson's letter to members of the International Trade Bureau
also includes an insert explaining that the organization's
goals are "to assist businesses in gaining access to
corporate America."
The brochure states, "Membership in the Rainbow/PUSH
Coalition International Trade Bureau is open to minority and
women business owners who want to maximize their growth
potential."
Annual dues for membership in Jackson's International Trade
Bureau start at $300 for companies with gross revenues of
$500,000 and go up to $2,500 for companies with gross revenues
of $5 million or more.
The brochure does contain the following caveat: "Note:
Membership in the Rainbow/PUSH Coalition International Trade
Bureau does not guarantee the receipt of business from any of
its Trading Partners or other entities." |
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