Politics

Rev. Al Sharpton’s Messy Financial Web

| by Rhianna Kreger

Reverend Al Sharpton, the incendiary street activist turned White House adviser, reportedly owes millions of dollars in federal and state back taxes, the New York Times reports today.

Sharpton has accrued more than $3 million in personal federal tax liens, as well as roughly three-quarters of a million dollars in liens for each of two of his private companies, Raw Talent and Revals (“Rev. Al’s”) Communications, the latter of which he had dissolved in 2009. That same year, it was estimated that his not-for-profit organization, the National Action Network, owed $1.1 million dollars in unpaid payroll taxes, placing it as one of “the most delinquent nonprofit organizations in the nations,” according to the Times.

Mr Sharpton’s history of messy finances stretches back to the 1990s, when he was indicted—and acquitted—on felony charges of tax fraud and stealing a quarter of a million dollars from one of his charities. In 1993, he pled guilty to the misdemeanor of failing to file an income tax return to New York State. In 1998, Sharpton announced that he could not pay a court-ordered fine of $65,000 to Steven A. Pagones for defamatory statements he made during the Tawana Brawley case, when the teenaged Brawley accused Pagones and two other white men of abducting and raping her. (A grand jury found the accusations to be a hoax.) Sharpton’s claim that he was broke—save for a $300 watch and his 20-year-old wedding ring—was elaborated in a lengthy deposition given to Pagones’s lawyers in 2000.

That testimony, according to an archived New York Times report, provided a glimpse “into the byzantine world” of Sharpton’s finances, where the lines between the personal, the nonprofit, and the corporate blurred and intersected in a web of circumspective sleight of hand. The nonprofit National Action Network siphoned money into Revals Communications, which was then used to pay for Sharpton’s daughters’ boarding school, as well as the family’s rent. At other times, Sharpton made no-interest loans to the National Action Network, which accountants maintain has subsisted entirely off these loans, in direct violation of federal tax laws for nonprofits.

In 2009, with the National Action Network still mired in $1.1 million in overdue payroll taxes, Sharpton began to collect a new salary of $250,000 from the organization. This practice—of a nonprofit officer drawing a salary while the organization is in debt—is regarded as “abusive” by the US Treasury.

Meanwhile, thanks in large part to the rise of Sharpton’s influence with powerful politicians—ranging from New York City Mayor Bill de Blasio and Governor Andrew Cuomo to President Barack Obama himself—Sharpton has been able to greatly increase donations to the National Action Network, pulling in more than $4 million dollars annually, according to its most recent tax filing, much of which stemming from corporations.

In a perfect illustration of the porous nature of Sharpton’s financial world, he held a birthday party for himself last month at one of New York’s most posh restaurants. Billed as a fundraiser for the National Action Network, the Sharpton birthday bash—which featured appearances by the mayor, the governor, and with a prepared statement by the president—raised $1 million dollars.

Sources: New York Times (2014); Mediaite; New York Times (2000); New York Post / Image source: WikiCommons, Mediaite