Stopping Juvenile Detention:

Al Sharpton and the National Action Network: Why Do Corporations, the Media, Democrats (and some Republicans) Play Along? By Fred Lucas

Summary: Once reviled as a racial dem- agogue, the Rev. has trans- formed himself into a national statesman— in his own eyes. Why do major American corporations, national politicians and the news media agree with him?

he scene: the Sheraton Hotel in New TYork City last April. The guests: Big Media personalities such as CNN’s Larry King, ABC’s Robin Roberts, and NBC’s Matt Lauer, executives from Pep- siCo and Wal-Mart, Andy Stern of the Service Employees International Union (SEIU), and former House Speaker Newt Gingrich.

The corporate sponsors: Johnson & John- son, American Honda, Anheuser-Busch, Colgate-Palmolive, Comcast, Pfi zer and Home Depot. Bashing Republicans: RNC chairman Michael Steele dropped by the annual con- vention of Rev. Al Sharpton’s National Action Network last month. Both leaders The occasion: The four-day 11th Annual criticized the GOP. (photo: dailycaller.com) Convention of the National Action Network national trade and whom he would appoint investigating NAN’s fi nancial dealings (NAN), a “Christian activist organization,” to chair the Federal Reserve Board while the year before and subpoenaed Anheuser- according to its tax forms, whose founder and standing at a podium alongside Senators John Busch for its records of charitable gifts to president is the Rev. Al Sharpton. Kerry, Joe Lieberman and John Edwards, and the nonprofi t, a move Sharpton criticized former Governor Howard Dean, Gen. Wesley as a “fi shing expedition.” According to These days Al Sharpton has trimmed down Clark and Rep. Dennis Kucinich. and shaped up. He no longer wears jumpsuits and gold medallions around his neck. His May 2010 Last year, New York magazine put Sharpton bouffant hair is slicked back and his rheto- on its list of the city’s “Power Dozen,” which CONTENTS ric is toned-down. Once reviled as a racial included Mayor Michael Bloomberg and demagogue, he now receives the deference publisher Rupert Murdoch. When Sharpton of politicians. Sharpton will probably never Al Sharpton and the threw himself a 55th birthday party, Mayor live down the Tawana Brawley case of the late National Action Network Bloomberg and New York Governor David 1980s, but in 2004 he ran for the Democratic Page 1 Patterson came to offer him their congratula- Party’s presidential nomination, where he tions and acknowledge his stature and infl u- participated in nationally televised primary ence. However, one notable was missing. Philanthropy Notes debates. He answered questions about inter- Attorney General Andrew Cuomo began Page 6 FoundationWatch its website, Anheuser-Busch contributed a negative fund balance of $2 million and The National Legal and Policy Center between $100,000 and $499,000 to NAN faced more than $1 million dollars in pend- (NLPC), a government and corporate watch- in 2007 alone. (, June 19, ing tax liens. In May 2008, the Associated dog group, wasn’t so sure. In 2006 and 2007 2008) Press reported that Sharpton and his business NLPC sponsored a shareholder proposal to entities owed $1.5 million in back taxes: The require PepsiCo to disclose all its charitable Before became president, IRS got a lien of $931,397 against Sharpton giving and provide to its shareholders a Sharpton vied with Rev. Jesse Jackson to for unpaid personal income taxes. New York business rationale for each gift. PepsiCo be perceived as the most prominent spokes- City said he owed $365,558 in municipal management opposed the proposal, which man for black America and the conscience taxes, and New York State said his company, failed. of the civil rights movement. He was the Rev. Al Communications, owed $175,962 master of ceremonies at memorial services in state tax. In July 2008, Sharpton worked Last fall, PepsiCo shareholders tried again. for soul singer James Brown in 2006 and out a deal with federal prosecutors, agreeing They wrote the company’s management and pop star Michael Jackson in 2009. He has to pay back $1 million out of at least $1.8 asked why it continued to give money to claimed credit for preventing Rush Limbaugh million he owed in back taxes, according to the National Action Network. PepsiCo lists from purchasing part of an NFL team and news reports. (Mainstreaming Demagoguery, a 2008 contribution to NAN of “$10,000 for (temporarily) running Don Imus off the NLPC, May 14, 2009) or less.” (See http://www.pepsico.com/ airwaves. Purpose/Corporate-Contributions/Division- Sharpton and NAN continue to attract pub- Giving-2008.html.) The website of Sharpton’s National Action lic attention and corporate money. But one Network says, “The NAN works within the wonders how he manages to ignore media PepsiCo’s bland response: “As a global spirit and tradition of Dr. Martin Luther King, reports and defy court orders while continu- consumer products company that serves Jr. to promote a modern civil rights agenda ing to attract large corporate contributions. all people, we support many not-for-profi t that includes the fi ght for social justice and For an organization that frequently supports organizations with a variety of missions. The one standard of justice and decency for all anti-business policies and has a messy history leaders of these organizations may at times people regardless of race, religion, national of handling its own fi nances, what makes have points of view that do not necessarily origin, and gender.” With 45 chapters na- Sharpton’s National Action Network so ap- represent those of PepsiCo. I want to assure tionwide, NAN’s provocative motto is “No pealing to Corporate America? you that this Company does not endorse Justice, No Peace.” those individual viewpoints, political or PepsiCo, Wal-Mart, MGM: No Funding, otherwise.” (NLPC, Oct. 19, 2009) Yet all is not as it appears. The fi nances of No Peace the National Action Network are shaky. In 2009 NAN was proud to give its Corpo- PepsiCo is just one of many major American The group’s 2007 tax return shows it had rate Excellence Award to Maurice Cox, the corporations that participate in the National PepsiCo Vice President for Diversity and Action Network’s “Madison Avenue Initia- Editor: Matthew Vadum Inclusion Development. tive.” NAN describes the Initiative this way: Publisher: Terrence Scanlon What a difference a decade made. In June Foundation Watch 1998, Al Sharpton was complaining that “In 1999, in a united voice with African- is published by Capital Research Pepsico did not feature African-Americans American advertising agencies and market- Center, a non-partisan education and in its commercials, and he threatened to ing and media outlets, he [Sharpton] launched research organization, classifi ed by call for a consumer boycott of all Pepsi the ‘Madison Avenue Initiative’ (MAI) to the IRS as a 501(c)(3) public charity. products, including Frito Lay, Tropicana, ensure that those who do business with and Quaker Oats. The boycott never took advertising outlets around the country deal Address: 1513 16th Street, N.W. place. Instead, PepsiCo hired Sharpton as even-handedly with agencies, media outlets Washington, DC 20036-1480 a consultant for $25,000 a year and it put and publications run by people of color,” the him on its African-American advisory board NAN website says. Phone: (202) 483-6900 where he served until 2007. (New York Post, Long-Distance: (800) 459-3950 June 15, 2008) “Sharpton’s work with the MAI has targeted E-mail Address: major corporations, including PepsiCo, Col- [email protected] Had the job and Pepsico donations to NAN gate-Palmolive, Microsoft, and others, who compromised Sharpton’s criticisms or have subsequently extended their advertising Web Site: persuaded him to end his boycott threat? dollars to reach more of African-American http://www.capitalresearch.org Sharpton insisted that they had not made and Hispanic communities.” Organization Trends welcomes let- him less aggressive in his pursuit of social ters to the editor. justice. “Just because Pepsi and other com- Wal-Mart, the nation’s largest retailer, is panies had me on their board advising them another NAN corporate contributor. It has Reprints are available for $2.50 pre- paid to Capital Research Center. didn’t mean that I wasn’t blasting them all contributed annually to Sharpton’s group the time,” said Sharpton. since 2005. As a result, the company that 2 May 2010 FoundationWatch many on the Left love to hate has received no from General Motors, a GM spokesman closes additional diffi culties. It suggests that grief from Sharpton. Instead, Esther Silver- told the New York Post. Then, in December NAN’s corporate funders support, at the very Parker, Senior Vice President of Diversity 2006, Sharpton threatened to call a boycott least, a fi nancially troubled organization that Relations for Wal-Mart Stores, Inc., received because the company had closed an African- may be teetering on the edge of bankruptcy. the Corporate Executive of Excellence Award American owned GM dealership in the More worrisome is the possibility that major at the NAN convention last April. Bronx. He even led a demonstration outside American corporations sustain a corrupt GM’s New York headquarters building. In nonprofi t that misuses its contributions to In 2006, the Rev. Jesse Jackson, an ardent 2007 and 2008, GM gave NAN $5,000, but sustain its founder’s political ambitions and Wal-Mart critic, accused the retail giant it was not listed as a sponsor of the 2009 personal vanity. of trying to “throw money at us” to buy NAN convention. Jackson’s silence. Sharpton said that didn’t In 2007, a year before the nationwide fi nancial happen in his case. “Wal-Mart has in no way Sharpton actually picketed Daimler crisis, NAN took in $2,379,376 in revenue tried to persuade me with money.” (New York Chrysler’s Chicago car show in November but spent $2,481,092. Its annual defi cit was Post, July 15, 2008) 2003 and threatened a consumer boycott be- $101,716. According to its 2007 IRS Form cause he said the company showed racial bias 990 (the most recent tax return publicly When Wal-Mart shareholders expressed in making car loans. “This is institutional rac- available), NAN ended the year with no net their concerns about their company’s gifts ism,” Sharpton said. By May 2004, Chrysler assets. Instead, it reported a negative fund to Sharpton, they received this uninforma- was contributing to NAN and sponsored the balance of $2,075,179. tive e-mail. annual convention. In 2007, Chrysler also got an award for “corporate excellence.” The Form 990 reveals that at the end of 2007 “Wal-Mart supports the National Action (New York Post, July 15, 2008) NAN owed $1,848,799 in “payroll taxes Network (NAN) as part of an ongoing effort and related interest & penalties,” a slight to partner with national organizations that In 2003, the Rev. Horace Sheffi eld III, chair- decline from the $1,954,200 it owed in 2006. support issues and initiatives of importance man of NAN’s Michigan chapter, co-wrote However, the overall trend in NAN’s payroll to our customers, and the communities we a letter with Sharpton to American Honda tax-related debt has been growing: from serve,” the Wal-Mart statement said. “Our complaining that the company did not hire $939,300 in 2003 to $1,255,218 in 2004 to support for NAN is focused on addressing enough African-Americans in management. $1,553,833 in 2005. health and wellness issues and other issues “We support those that support us,” the letter important to our customers and associates. said. “We cannot be silent while African- In addition, NAN owes at least $1,556,059 Our company will continue to support orga- Americans spend hard-earned dollars with in federal taxes and $108,489 in New York nizations that can further our mission to help a company that does not hire, promote or do taxes, according to the Nexis tax liens da- people live better.” (NLPC, Oct. 19, 2009) business with us in a statistically signifi cant tabase. manner.” (New York Post, July 15) Shortly In 1998 NAN complained that department thereafter American Honda executives began Pro-Worker? store giant Macy’s did not spend enough of contributing to NAN and sponsored its an- Sharpton claims to be an advocate for work- its advertising budget on minority-owned nual convention. ers rights. “We will not allow you to enslave media. Macy’s is now a NAN sponsor too, our communities, Mr. Ratner,” Sharpton and Sharpton is on the company’s unpaid Ford Motors is also a NAN sponsor, although said in front of a supportive crowd in 2000, panel of diversity advisors. there have been no reported NAN threats according to the New York Post. “You must against it. Other corporate sponsors for the meet with us. You must come to terms with Then there’s the MGM Mirage entertain- 2009 National Action Network conference the poverty you are creating with public dol- ment company. In 2001 and 2002 Sharpton were Ariel Capital Management, Black lars.” Sharpton was denouncing New York threatened a national boycott if its offi cials Entertainment Television, Entergy, Global developer Bruce Ratner for paying low wages did not meet with him to talk about racism Hue, LawCash, Omnicom Group, OraSure to workers at his Atlantic Mall development in minority hiring at the MGM casino in Technologies and Williams Capital Group. in Brooklyn. Detroit. MGM management decided not to Union sponsorship came from SEIU, AF- gamble. In 2003, it named NAN one of its SCME, the National Education Association In 2004, Ratner’s company, Forest City diversity partners in Detroit. and the United Federation of Teachers. Ratner, began making contributions to NAN, and Sharpton took credit for Atlantic Some might call NAN’s method of operation Financial Troubles Yards, another Ratner development, which a corporate shakedown. Clearly Corporate America fi nds it easier to included a new arena for the New Jersey buy off the Rev. Al Sharpton than to endure Nets. “Look at Forest City Ratner,” he said. Detroit Auto Firms Kowtow to NAN his threat of boycotts with their inevitable “I blasted them and they came up with one The Detroit auto industry also recognized bad publicity and the possibility of costly of the best community agreements for blacks the benefi ts of being charitable to Sharpton. legal action. and Latinos.” Beginning in 2000, NAN made repeated but unsuccessful requests for contributions However, a review of NAN’s tax forms dis- NAN’s practices belie Sharpton’s words. On May 2010 3 FoundationWatch

July 5, 2007, the Workers Compensation called to account, he confl ates his personal The organization was soon involving itself Board of New York fi led a $25,000 claim travails with his civil rights crusading, turning in high profi le cases that caused great racial against NAN. Earlier, the New York State his own questionable practices into a vehicle tension. Sharpton organized protests follow- Commissioner of Labor obtained a $39,314 for self-promotion and raising his politi- ing the Crown Heights riots in 1991 after a judgment against NAN on Feb. 1, 2005. The cal clout.” (Mainstreaming Demagoguery, black child was killed by a car that was part commissioner fi led another $4,279 claim NLPC, May 14, 2009) of a Jewish motorcade. In 1999 he protested against NAN on Feb. 8, 2007. News reports against police offi cers who in 2004 said the New York State Department The Tawana Brawley Case mistakenly shot and killed African immigrant of Labor issued warrants against NAN for Sharpton founded the National Action Net- Amadou Diallo. NAN was prominent in the failing to pay $15,446.31 in unemployment work a few years after the Tawana Brawley 2006 Jena Six controversy, where six black insurance case made him a national fi gure. In Novem- teens in Louisiana were charged with at- ber 1987, fi fteen year-old Tawana Brawley tempted murder in the beating a white high While claiming to help the downtrodden, claimed she was brutally raped by six white school student. Typically, Sharpton’s com- NAN in 2003 ran up a $76,000 debt with males in Dutchess County, NewYork, and ments attracted media attention, provoked 1-800 LIMO CENTER CORP that it did not that one of her abductors wore a police controversy and seemed to infl ame already pay. It was slapped with a $51,939 judgment. badge. When police and prosecutors voiced tense situations. Sharpton’s only comment was to object to suspicions that her account was a hoax, black calling the company a “limo service” because activists became involved in the case and Targeting Don Imus and Rush he said he never rides in limousines. The New charged that law enforcement authorities Limbaugh York Times reported (Jan. 10, 2004) that in were covering-up a police crime. Sharpton, In 2007, Sharpton led the attack on radio 2004 a small travel agency fi led a lawsuit then 33 years old, became Brawley’s chief personality Don Imus, who had stupidly against both NAN and Sharpton for almost public advocate. A young protégé of singer joked that players on the Rutgers University $200,000 in travel expenses, including a James Brown and organizer for Jesse Jack- women’s basketball team were “nappy-head- trip to Sudan. son, Sharpton staged protest demonstrations ed hos.” Sharpton urged Imus’s employers, and media events in Brawley’s defense and MSNBC television and WCBS Radio in New It appears that NAN’s problems have forced appeared on news programs, including York, to take him off the air. Despite Imus’s Sharpton to forego his salary as president “Nightline” and shows hosted by Phil Do- numerous and abject apologies, MSNBC and and CEO. Tax returns show he was paid a nahue and Geraldo Rivera. In the course of WCBS buckled to pressure and ditched the salary of $90,000 in 1999, $93,636 in 2003 denouncing the police and courts as racist show. (Eventually Imus got a new radio show and 2004, $72,036 in 2005, $4,860 in 2006 and corrupt, Sharpton accused an assistant on WABC in New York that is now televised and zero in 2007. prosecutor in Dutchess County of participat- on the Fox Business Network.) ing in the abduction and rape. However, it’s far more likely that Sharpton’s “We immediately went to work when CBS/ personal fi nances are entwined in NAN’s. An Brawley’s account was completely discred- NBC on-air personality Don Imus uttered amusing New York Times story (Dec. 21, ited after a thorough investigation. A decade disparaging remarks regarding the Rutgers 2000) noted that Sharpton went so far as to later, in 1998, the falsely accused prosecu- women’s basketball team,” wrote NAN offi - say that he owned no suits but had “access” tor, Steven Pagones, won a $345,000 libel cial Rachel Noerdlinger last year. “As a Black to a dozen. Sharpton also said he did not own judgment against Sharpton and Brawley’s female, I was beyond offended, shocked and a television set but watched a TV in his home lawyers, who refused to pay it. Sharpton’s frustrated with such openly degrading state- purchased by the company he runs. In a court share of the fi ne, $65,000, was eventually paid ments.” (Essence, Oct. 22, 2009) deposition, Sharpton confused his examiner in 2001 by his supporters, attorney Johnny by explaining that he invests almost all his Cochran, Black Enterprise publisher Earl Noerdlinger wrote that she was even more salary in his company, Rev. Al Productions, Graves and Manhattan power broker Percy astounded when Rush Limbaugh attempted which pays the rent and utilities for his fam- Sutton. Sharpton denies that he defamed to join an investors’ group to buy the St. ily home. Sharpton said he reimburses the Pagones and has never apologized. Louis Rams, a professional football team. company for its expenses. At another point She noted that Sharpton sent a public letter he noted that the only items he personally Even though Sharpton has been dogged by the to NFL Commissioner Roger Goodell urg- owned were his watch and wedding ring. case as he seeks to advance his career, it was ing him to reject any offer. It said, “Rush the initial source of his celebrity. Sharpton Limbaugh has been divisive and anti-NFL The Center for Public Integrity, an investiga- founded NAN in 1991. It was incorporated on several occasions with comments about tive group that monitors money in politics, as a 501)c(4) nonprofi t on April 4, 1994, the NFL Players including Michael Vick and said of Sharpton during his 2004 campaign 16th anniversary of Martin Luther King Jr.’s Donovan McNabb and his recent statement for president: “Sharpton has built, with the assassination, and its headquarters building that the NFL was beginning to look like aid of a core of wealthy contributors, a small on 125th Street in the heart of Harlem was a fi ght between the Crips and the Bloods empire of tax-exempt and for-profi t compa- dedicated the following year. The head- without the weapons, was disturbing (New nies and mingles their fi nances to confuse quarters is now located at 145th Street and York Daily News, October 9th). I commend creditors and tax collectors alike. When Malcolm X Boulevard. the executive director of the NFL Players 4 May 2010 FoundationWatch

Association DeMaurice Smith for publicly had to return $100,000 in federal matching Steele spent much of his speech conceding asking that the League seek to unify not di- funds. FEC investigators and the FBI were left-wing talking points and apologizing for vide in a letter to the executive committee.” unable to distinguish between his campaign past sins of the Republican Party. (Oct. 12, 2009) funds, which were eligible for federal match- ing grants, from funds that were provided by Refl ecting on Sharpton’s past activities, CNN reports attributing racist comments NAN, which were not. In December 2007, African-American syndicated columnist Star to Limbaugh were later retracted. But Lim- FBI agents subpoenaed ten Sharpton associ- Parker marvels at his success. baugh was blocked from buying into the ates to testify before a grand jury. They were team after Commissioner Goodell decided asked if he had lied about the “co-mingling” “We see today that if Al Sharpton does not like he was too controversial. of NAN funds with campaign dollars to le- a man, and he pulls circumstantial evidence verage federal matching funds. (New York to claim he is a racist, he can get that man’s NAN’s spokeswoman couldn’t wait to Daily News, Dec. 13, 2007) rights to freely operate and do business in our gloat. society abrogated. It is a process no differ- It was subsequently determined that Sharpton ent from the past in which racists produced “Three days after Rev. Sharpton’s letter ran up $509,188 on his American Express ‘information’ that ‘proved’ that blacks were to the commissioner, the group vying to card, that his campaign committee paid down inferior and incapable of living as free and purchase the Rams sacked Limbaugh in just $121,996 of the debt, while the bulk was equal citizens,” Parker wrote. what was truly a victory for all Americans,” paid by NAN, in violation of federal election Noerdlinger wrote. “The truth is, we have laws. (New York Post, April 19, 2009) In “But give credit where it’s due. Sharpton worked tirelessly to leverage relationships April 2009, the FEC issued a report stating is a skilled entrepreneur and knows how to in television, print, radio and new media that that “Sharpton 2004 materially misstated get his business done,” Parker continued. enable us to expediently get our concerns out its receipts and disbursements, as well as “What is pathetic is the gutless, ill informed in the forefront.” cash on hand in 2004,” and further that the and misguided businessmen and business- campaign “kept poor records of its activities women, from all walks of American life, After dashing Limbaugh’s NFL hopes, and expenditures” and “comingled funds who are ready to cave to race blackmail at MSNBC commentator Chris Matthews with NAN.” the drop of a hat.” told Sharpton, “I’m just saying you are a powerful voice in this country. When you There was no criminal prosecution. However, Fred Lucas is White House correspondent for speak out, let’s face it, the buildings shake. the FEC fi ned Sharpton and NAN $285,000. Cybercast News Service (CNSNews.com). People do listen to you. You had a lot to do NAN did not admit any intentional wrongdo- with the noise level here.” (“Hardball,” Oct. ing. (New York Post, April 19, 2009) 15, 2009) FW ‘Skilled Entrepreneur’ Presidential Dreams Despite his personal notoriety and fi nancial Matthews’ point is well-taken. Sharpton problems, Sharpton is not only appeased Please consider contributing has always wanted to convert his notoriety but is befriended by some conservatives and into media fame and political infl uence. corporations. In 2008 the Rev. Pat Robertson early in this calendar year to In 1992 – a year after founding NAN – he agreed to appear with Sharpton in a fi lmed the Capital Research Center. ran unsuccessfully in New York to be the public service commercial that was part of Democratic party’s U.S. Senate nominee. He a $300 million campaign sponsored by Al We need your help in the tried again in 1994, and then ran for mayor Gore’s Alliance for Climate Protection. The current diffi cult economic of New York in 1997. These failures set commercial featured the two pastors sitting climate to continue our im- him up to enter the Democratic presidential on a sofa placed on a sandy beach, and was portant research. primaries in 2004. intended to show that people who don’t agree on much can agree on saving the environ- Sharpton came in second in the Washington, ment. Another team was Sharpton and former Your contribution to advance D.C. primary, winning 34% of the vote, House Speaker Newt Gingrich. Last Septem- our watchdog work is deeply then contested Kucinich for third place in a ber they went on a fi ve-city tour sponsored appreciated. handful of states after everyone but Kerry by Obama education secretary Arne Duncan and Edwards dropped out. He won 10% of to promote a better education for American Many thanks. the Democratic vote in New York and 8% children. Last month Republican National in South Carolina. In May 2004, after he Committee chairman Michael Steele dropped Terrence Scanlon formally left the race, the Federal Elections by NAN’s annual convention in New York Commission ruled that Sharpton’s campaign City and was warmly introduced by Sharpton. President May 2010 5 FoundationWatch PhilanthropyNotes President Barack Obama and the First Lady donated 6% of their $5.5 million in income to charity, according to their 2009 tax returns. By contrast, Vice President Joe Biden and his wife gave just 1.5% of their $333,182 income to charitable causes. The Obamas donated $329,100 to 40 charitable organizations including $50,000 contributions to CARE and the United Negro College Fund. As previously reported, the president gave his $1.4 million Nobel Peace Prize cash award to 10 charities.

Giving credit where it’s due: The nonprofi t media outlet ProPublica received a Pulitzer Prize for investigative reporting, the fi rst time an online news outlet has won such a prize. ProPublica was honored for reporting on medical care at a New Orleans hospital following Hurricane Katrina. ProPublica is funded largely by billion- aire liberals Herb and Marion Sandler and was profi led by Cheryl K. Chumley in the May 2009 Foundation Watch. Despite this good work, many ProPublica stories are left-wing hit pieces attacking corporations and Republican politicians.

Blurring the lines: Congress may soon consider allowing the creation of new hybrid nonprofi t/for-profi t entities, according to Russell Sullivan, staff director for the Senate Finance Committee. “We might see the emergence of some proposals to establish what I’ll call, for the lack of a better term, a for-benefi t corporation – something that is in-between a private taxable company, that’s under our rules of C corporations or S corporations and partnerships, but also not under our rules having to do with charities,” he told the Chronicle of Philanthropy. “The reality is every business really has multiple purposes.” He noted that many businesses make charitable contributions in their communities, while some charities have business operations.

Meanwhile, Maryland has created a new legal structure – called a benefi t corporation – for companies that mix business with social and environment-minded purposes. Gov. Martin O’Malley signed into law a bill providing board members with a legal shield to take social and environmental issues into consideration, the Chronicle reports.

If the 2003 tax cuts are allowed to expire, the income tax on upper-income taxpayers will increase by 10% and the capital gains tax will increase by 33%. This is sure to have a negative impact on charitable giving, write former White House aide Scott Walter and Sandra Swirski in a recent legal backgrounder from the Washing- ton Legal Foundation. Households whose wealth exceeds $1 million –7 % of the population–provide half of all charitable contributions. Walter and Swirski observe that during the boom years 1995-2000 real income per capita increased by 12% while household giving increased by 54%. Charity will suffer as the economy slows and government defi cit spending increases.

The U.S. Securities and Exchange Commission alleges Goldman defrauded investors by failing to disclose confl icts of interest in subprime mortgage investments it sold. The SEC’s civil complaint states that Goldman did not disclose that one of its clients, Paulson & Co., which forked over $15 million in underwriting feels to the bank, helped to create – and then bet against – the fi nancial instruments that Goldman pawned off on unsuspecting investors. Investors lost upwards of $1 billion in the deal, the SEC said. Goldman denies any wrongdoing.

Frequent Capital Research Center contributor Timothy P. Carney says Goldman has become a “powerful ally” of President Obama in his “self-styled war against Wall Street.” In a Washington Examiner column, Car- ney writes that Goldman, whose alumni hold high positions in the Obama administration, told its sharehold- ers that the planned legislative assault on the heart of capitalism will boost Goldman’s profi ts. “Given that much of the fi nancial contagion was fueled by uncertainty about counterparties’ balance sheets,” Goldman CEO Lloyd Blankfein and President Gary Cohn wrote in the bank’s annual report, “we support measures that would require higher capital and liquidity levels, as well as the use of clearinghouses for standardized derivative transactions.” 6 May 2010