|
|
 |
|
Jackson
called "Godfather" of Shakedowns
|
By Marc Morano
CNSNews.com Senior Staff Writer
October 23, 2001
(This is the second of two articles focusing on Jesse Jackson's business
dealings)
(CNSNews.com) - A Washington D.C. public relations
executive is warning clients about the consequences of
"appeasement" in dealing with Jesse Jackson, and labels
Jackson the "godfather" of corporate
shakedowns."
Nick Nichols' book, entitled The Rules for Corporate Warriors:
How to fight and survive attack group shakedowns, follows a
highly publicized deal in August of this year between Jackson
and Toyota Motor Sales USA, in which the automaker agreed to
spend nearly $8 billion over ten years to increase minority
participation in the company. Prior to the agreement, Jackson
had threatened to organize a boycott against Toyota.
Toyota is also accused of buckling under Jackson's pressure by
diverting a portion of a $300 million bond offering to
supporters of the civil rights leader. Toyota claims the bond
offering was merely a "coincidence," and unrelated
to its agreement with Jackson to boost minority participation
at the company.
"We have had protection rackets for several thousand
years because they work. The Mafia has made protection an art
form. Jackson has taken a lesson from history," Nichols
told CNSNews.com.
He defines a shakedown as occurring when a group or individual
like Jackson makes "a highly exaggerated or completely
bogus allegation and the message to the company is you either
do things our way or we are going to take this public,
embarrass you, hurt you on Wall Street and do a lot of
damage."
The next step, Nichols said, involves the corporation
consulting with a public relations firm, which usually
recommends that the company meet the demands of the pressure
group. But Nichols cautions against taking this advice.
"That is the attitude that was held by [former British
Prime Minister] Neville Chamberlain when he tried to do this
with Adolf Hitler. It didn't get him anywhere and it's not
going to get them anywhere," he stated.
When a company gives into these types of demands, they are
open to even more pressure, according to Nichols.
"Once your corporation has been marked as a company that
is prepared to pay up and roll over, other groups who also
make a living from doing this kind of thing start to go after
you," he stated. Nichols cites Starbucks' decision to
meet the demands of the organic food industry as a recent
example.
"Starbucks rolled over. Now every time you pick up the
paper, someone new is attacking the company. It's an easy hit
for people who simply want to engage in a protection
activity."
Nichols expects more corporations to give in to the demands of
Jackson because "a lot of corporate executives are
getting counsel from PR flacks and others to basically engage
in appeasement. It's a lot easier to do than to fight
back."
A Quid Pro Quo?
Critics say Jackson's agreement with Toyota shows a familiar
pattern.
Ken Boehm, chairman of the National Legal & Policy Center
(NLPC), said Toyota's finance division sold a $300 million
bond offering, with a portion going to two financial
contributors of Jackson, just one week after Jackson's boycott
was delayed. The NLPC filed a complaint with the Internal
Revenue Service earlier this year alleging that Jackson's
Citizenship Education Fund (CEF) had violated several tax code
provisions.
"There is a $300 million security offering that gets
farmed out through the underwriter to two of Jackson's biggest
supporters on Wall Street," Boehm said, noting it
happened just one week after Jackson announced he was delaying
the boycott against Toyota.
"Sometimes things are exactly what they look like. This
is one of those times," Nichols said. "You have a
quid, a pro and a quo."
The New York Post reported that Toyota sold a $300 million
issue of medium-term notes through Goldman Sachs,
"listing two street firms whose owners are big Jackson
supporters - Blaylock & Partners, and Williams Capital -
as sellers of the issue."
Blaylock & Partners contributed $30,000 to CEF and also
benefited from Jackson's opposition to a merger between
AT&T;and TCI, Boehm alleged. "[Jackson] dropped his
opposition when the companies hired Blaylock & Partners to
float an $8 billion bond offering. AT&T;then gave
[Jackson's] CEF $425,000," according to Boehm.
Williams Capital has given Jackson at least $50 thousand in
contributions, Boehm said.
"That would be strictly coincidence and not part of our
reason for using them," Mike Michels, a spokesman for
Toyota told CNSNews.com, regarding the multi-million
dollar medium-term note sale involving the two firms.
"There was no quid pro quo," he said.
Boehm counters, "I think it is what is looks like. It is
no coincidence at all. It was the payoff."
Jackson's Rainbow/PUSH organization threatened the nationwide
boycott of Toyota because of a company ad featuring a black
man with a gold tooth reflecting the company's RAV4 sport
utility vehicle.
The ad was denounced as racist and Toyota quickly dropped it.
But in May, Jackson began his boycott campaign demanding more
minority participation in the company.
On June 20th, after a series of meetings with Toyota, Jackson
announced he was postponing the boycott and set a deadline of
Aug. 1 to resolve the issue. Toyota made it known that it
wanted to resolve the boycott threat by working with Jackson
to reach an accord. According to Boehm, the stock offering was
made at the end of June and Toyota's agreement with Jackson's
Rainbow/PUSH coalition to increase minority hiring was
finalized Aug. 8.
Michels laments that there is a "lingering perception
that our corporate diversity plan was in some way a contract
or some kind of agreement with Rev. Jesse Jackson. It is
not."
He instead credits Jackson with allowing Toyota "to delve
into our diversity programs much more comprehensively than we
had in the past" and giving the company "an
excellent opportunity to look at it in a holistic
fashion."
A Familiar Pattern?
Boehm believes Jackson's threatened Toyota boycott followed a
familiar pattern.
"He makes a threat, the corporate folks who are being
threatened cave in by giving money to Jackson's groups, or
friends, or business associates and then a boycott is averted.
That is exactly what happened here. It's a one, two and three
that has characterized virtually every one of his
boycotts," he said.
Keiana Peyton, a spokeswoman for Operation PUSH, told CNSNews.com
that Jackson has been proven financially clean.
"In the probes that have already been completed, they
have found no financial improprieties," she said.
Boehm said he is unaware of the "probes" referred to
by Peyton. "To say he has been cleared, I would like to
know who cleared him and when. Just about anytime he has ever
come under official scrutiny, he has never come up
clean," Boehm said.
When pressed to name the probes to which she was referring,
Peyton would only reference a Jackson media relations effort
earlier this year.
"We had a national press conference with CNN, local
papers, FOX News. We gave them a tour of our financial records
and financial offices and again those accusations that were
raised, no evidence was found," she offered.
Boehm explained that "Jackson's entire career has been
marked with financial irregularities going back to grant money
in the 1970s with federal auditors to the present day use of
charitable funds to pay his mistress." The latter
accusation refers to a scandal that became public earlier this
year when Jackson admitted he had fathered a child out of
wedlock with a former employee, Karin Stanford. According to
the NLPC, Jackson also may have used funds from his
Citizenship Education Fund to help Stanford buy a house in Los
Angeles, a charge Jackson's organization denies.
"There is a compelling pattern that Jackson helps those
in the minority community that help him first," Boehm
noted.
Peyton defended Jackson's tactics and said there was nothing
unusual about them.
"There might be persons, that the reverend or our trade
bureau members are familiar with their records, their work
histories, their ability to provide services. The average
person would only want to recommend persons that they have
worked with personally or could vouch comfortably for
them," she explained.
"But as far as it being exclusively for a particular
group of people, that is not the case at all."
'Just Say No'
Nichols, who runs his own PR firm, counsels his clients to
fight back against any potential shakedown artists. "The
corporations who engage in [fighting back], normally you don't
see much coverage of them because the attacker usually goes
away once they find out they can't get away with it," he
said.
When confronted, he advises clients to "just say no"
and "notify federal law enforcement that your company is
the potential target of a shakedown on the part of some group
or organization." He maintains that reporting the
activity to law enforcement would have a chilling effect on
the group's pressure tactics.
For corporate executives skittish about such action, Nichols
warns that they have no alternative. "You have to stand
up and fight even if you do sustain some short term damage
because in the long run the damage is going to be far
greater," he advised. |
|
HOME >>
