Jesse Jackson's Shakedown Methods

Excerpts from book reveal his scheme of manipulating corporations

March 11, 2002

Based on groundbreaking interviews by the author and damning documents just released by the government, Kenneth R. Timmerman's new book, "Shakedown," reveals how Jesse Jackson has manipulated the public and painted a false portrait of himself from the moment he burst on the national scene in 1968. "Shakedown," painstakingly researched and meticulously footnoted, should forever change the public perception of Jackson. Here are two excerpts from Timmerman's blockbuster new book, beginning with the introduction, which lays out the wide scope of this important exposé.

By Kenneth R. Timmerman
© 2002 Regnery Publishing

Few political figures in America today arouse as much passion as the Rev. Jesse Jackson. A hero to some in the black community, Jackson is credited with helping to break down barriers to political and economic access. But to other black leaders, Jackson has become a symbol for all that has gone wrong with their community.

"Jesse virtually invented black racism," the Rev. Johnny Hunter, a black pastor from Virginia Beach, tells me. The Rev. Jesse Lee Peterson, a black conservative, calls Jackson a "gatekeeper of black progress" and a "race hustler" who has cashed in on white guilt to fund an opulent lifestyle and a personal power base. "He is really just a David Duke in black skin," Peterson says. On the anniversary of Dr. Martin Luther King, Jr.'s birthday in 2000, Peterson convened the first National Day of Repudiation of Jesse Jackson, which he announced would be "an annual event until Jackson repents or retires." This repudiation of Jackson by black community and church leaders came almost a full year before Jackson's public admission that he had fathered a "love child" with an employee.

As if foreseeing Jackson, Booker T. Washington warned two generations earlier against "problem profiteers" within the black community:

"There is a class of colored people who make a business of keeping the troubles, the wrongs and the hardships of the Negro race before the public. Having learned that they are able to make a living out of their troubles, they have grown into the settled habit of advertising their wrongs – partly because they want sympathy and partly because it pays. Some of these people do not want the Negro to lose his grievances, because they do not want to lose their jobs."

"Shakedown" is the first investigative portrait of the Rev. Jesse Jackson since black reporter Barbara Reynolds' explosive biography was published in 1975. Based on interviews with Jackson friends and foes, federal prosecutors and other law enforcement officials, and on newly released government documents, "Shakedown" examines how Jackson has manipulated the truth to build a false portrait of himself from the moment he burst onto the national scene.

Over the years, he has graduated from street hustling, to prematurely adopting the religious title "Reverend," to abusing his privileges as a "special presidential envoy." But through it all he has used the same basic techniques – refining them as he went along – of intimidation, coercion and protection. In so doing he has enriched his family, steered billions of dollars of business to his friends and launched a political dynasty.

For all the press Jackson has attracted over the years, there is much about him that has remained a mystery. One of the most troubling questions is how Jackson, often flaunting the law, has managed to escape even the threat of prosecution. During the Carter administration, civil servants at the Department of Education amassed a huge investigative file on Jackson's Operation PUSH (People United to Save Humanity), which they believed was defrauding the government of millions of dollars in federal grants. Reagan officials terminated the grants but never prosecuted Jackson for fear of a racial backlash. The support Jackson has won from the liberal establishment, the media and even the criminal justice system defies logic – and ignores the facts of his malfeasance.

For there is a dark side to Jesse Jackson, and it has gone unreported from the very start. It began in Chicago in the late 1960s, when Jackson began consorting with a street gang known as the Black P Stone Rangers, whose leaders one by one were thrown in jail with life sentences for murder, extortion and racketeering. Among them was Jackson's own half brother and early partner in the shakedown game, Noah Robinson Jr.

Also ignored in those early days was the extraordinary influence exerted on Jackson by a known Communist Party organizer. Hunter Pitts O'Dell had been hauled before congressional investigating committees on three separate occasions because of his prominent role in the clandestine apparatus of the pro-Soviet Communist Party in the United States. Later known simply as "Jack," he became Jackson's international affairs adviser. Under Jack O'Dell's watchful eye, Jackson actively endorsed virtually every hard-left Third World leader promoted by Soviet intelligence at the time, from Fidel Castro to Syria's Hafez al Assad.

But getting from these beginnings to a position from which he could shake down Wall Street was a giant step that required Jackson's own special genius.

Jackson's stint as "presidential special envoy" to Africa during Bill Clinton's second term is without a doubt the least reported disgrace of the Clinton years. Not only did Jackson broker a disastrous peace agreement for Sierra Leone that brought a serial murderer into government, he helped block an international accord cracking down on the trafficking of "war diamonds" that were fueling the conflict.

But clearly the event that precipitated Jackson's fall from grace was the revelation in January 2001 that he had sired an illegitimate child with a former aide, Karin Stanford, and had been using funds from his tax-exempt empire to pay her personal expenses. For years, Jackson's amorous adventures had elicited winks and nods among his supporters and friends. Now, for the first time, a crack in his circle of friends allowed the scandal to leak to the mainstream press.

A sexual scandal is an embarrassment, and the misuse of tax-exempt funds is illegal, but there are far more serious charges to be laid against Jackson – charges which reveal the depth of his fundamental hypocrisy. "Me First Jackson," as some Chicago commentators called him, put himself before family, before friends, before country and – as shown by his support for the butchers in Liberia and Sierra Leone who made sport of amputating the hands of errant children – even before humanity.

If Jesse Jackson wants our respect, he deserves our scrutiny. It is my hope that Americans, provided with this new information on a major political figure, can now better evaluate his claims to have advanced the cause of racial healing. ...

Jesse finds new scheme

With the end of the Carter era grants and strong pressure from the Reagan administration, Jackson needed to find a new scheme to finance his operations. When no new money flowed into PUSH-Excel he simply jettisoned the school programs and revived the tried and true tactics of Operation Breadbasket. So much for his dedication to improving the quality of inner-city schools. Jackson was sending his own children to exclusive schools such as St. Albans, so why should he care?

Breadbasket's main drawback was its limited scope and financial benefits. When Jackson had turned to government grants, his base of black business backers in Chicago had been tapped out. He couldn't have squeezed greater contributions from them.

But now, in the 1980s, there were thriving black businesses all over the country, and Jackson had rich and powerful new friends. He decided to adapt the Breadbasket techniques to the big leagues and become the broker for black businesses in their dealings with major U.S. corporations.

This went way beyond the minority set-asides that were becoming Noah Robinson's specialty. Jackson used his experience with the early boycotts by Operation Breadbasket to pressure large corporations to sign "trade agreements" and "covenants" with PUSH that established racial quotas across the entire spectrum of corporate activities, not just government contracting.

Targeting Coca-Cola

His first target was Coca-Cola. Based in Atlanta, where former U.N. Ambassador Andrew Young was now running for mayor, Coke prided itself as an equal-opportunity employer and charitable donor to the majority black community. Coke thought it had nothing to fear from Jackson's threatened boycott. But Jackson was planning to beat Coke with another stick: its business dealings in apartheid South Africa. It was mau-mauing, 1980s style.

"Jesse brings up South Africa and the whole pressure in the negotiation shifts," a longtime PUSH operative told biographer Marshall Frady. "This is one of the areas where they're most vulnerable, because they've got big operations in South Africa."

Coca-Cola came to terms in August 1981 and offered distributorships of the patented Coke syrup to blacks. Coke shareholders were furious. A Coke spokesman, Carlton Curtis, said, "There's been a strong reaction in the marketplace that this is outright blackmail, that this is a $30-million give-away plan." But Coke management went along and soon downplayed the dollar value of the concessions they made to Jackson, claiming they barely reached $11 million and consisted of already planned expenditures.

But for Jackson the lesson was clear: Public shaming worked better than the threat of boycott and was much less work. The first to benefit was Jesse's half brother Noah Robinson. Covenant in hand, he won the first black syrup distributorship from Coca-Cola just one month later. Shortly afterwards, Coke also granted a distributorship to Cecil Troy, a major financial backer of Operation PUSH.

In March 1982, Jackson signed a similar covenant with Heublein Corp., a wine and spirits company that owned Kentucky Fried Chicken. Under the deal, Heublein pledged it would spend $360 million over five years with black banks, advertising agencies, and newspapers, and would expand the number of minority franchise owners.

Once again, Noah Robinson cashed in, using the covenant to lock in a Kentucky Fried Chicken franchise that would become the launching pad for a fast food empire. "I told Jesse, 'If you just do the talking for us – and I handle the financial operations – we can rival the Rockefellers in riches,'" Robinson said.

Cirilo McSween, Jackson's treasurer and early financial supporter, denies receiving any financial assistance from Jackson. "I'm certainly one of his friends – one of his closest friends – and there is no evidence that I ever benefited from Jesse," McSween says today. "I've always had business. He needed me, not the other way around." Nevertheless, in the early 1980s, McSween's Independence Bank of Chicago won several accounts from Burger King as a result of the PUSH covenant, a company spokesman said. And the list went on.

Jackson and friends benefit

Jackson benefited from the covenants at both ends, not just through his brother and his friends. Heublein spokesman Erik Pierce told the Washington Post that Heublein gave $5,000 to Jackson in 1982 to help underwrite the annual PUSH convention and another $10,000 in November 1983. 7-Up and Coca-Cola also made cash contributions to Jackson's groups.

Jackson and his new corporate partners were careful to avoid any appearance of impropriety. "We felt the covenant was a smart business decision, a marketing decision at that," said a Burger King spokesman. A 7-Up vice president added, "We did not feel at any time extorted, blackmailed, any of those things."

But another corporate executive who spoke on condition his name and company not be disclosed paints a very different picture. "It seemed like a shakedown to me. They had lists of people they wanted us to do business with, lists of things they wanted us to do, donations and things like that." Jackson described the covenants as "moving corporate America into the black for the good of America," and denied benefiting personally from the practice.

Other Jackson friends and cronies also prospered as a direct result of the covenants. Among them: Alexis Herman and Ernest Green, the Carter-era Labor Department officials who shoveled so much government money his way. The PUSH covenants created a whole new profession, that of "diversity consultant," and corporations scrambled to find individuals friendly with Jackson who could devise plans he would find acceptable.

Green told the Washington Post in 1984 that his consulting firm derived 30 percent of its business from contracts with Jackson targets Heublein, Coca-Cola and Southland Corp., which owned the 7-Eleven chain. But he quickly added that any suggestion he was profiteering was "hogwash."

Jackson grows defensive when challenged about requiring companies to hire his friends as consultants. "The companies choose the consultant of their choice. We don't appoint them. … We recommend a list of them." Ernest Green soon joined the board of directors of Operation PUSH and, along with Alexis Herman, went to work for Jackson's 1984 presidential campaign. It was Jackson's way to hold close to him those who benefited the most, binding them through dependence and loyalty.

Just as Jackson's school programs benefited from perfect timing during the Carter administration, when the federal government was seeking ways of improving performance and combating violence in predominantly black inner-city schools, his new emphasis on winning concessions for black businesses fit well with the entrepreneurial 1980s.

According to a U.S. Census Bureau survey, the black business sector was booming. The number of black-owned businesses jumped nationwide by nearly 50% during the five years from 1977 to 1982, from 230,000 to 340,000. Gross receipts for black businesses reached $12.4 billion in 1982, a 44% gain from just five years earlier. The majority of these firms were either service or retail trade. Auto dealers and service stations accounted for the largest dollar volume with $1.3 billion. Next were "miscellaneous retail firms" with total receipts of $993 million. These were followed by food stores with $883 million in total income, food and drink establishments with $675 million in receipts, and health services with $595 million gross. Jackson would ride the wave.

Creating PUSH dependency

Ironically, the biggest constraint on the growth of minority businesses was the practice of minority set-asides, or quotas, which made black firms dependent on federal largesse and less able to compete in the private market.

In 1980, for example, only one black-owned firm managed to "graduate" to self-sufficiency in the private market. Jackson's "covenants" with large corporations did not seem aimed at growing healthy black businesses, but rather at generating dependence on Operation PUSH by extending the federal set-aside program to the private sector. He became the broker, the intermediary, and he made it clear that he wanted to be paid for his services. This was the fundamental operating principle of Jesse's new scheme. Some considered it illegal.