The Washington PostDemocracy Dies in Darkness

NYT investigation: MSNBC’s Sharpton runs ‘delinquent’ nonprofit organization

The Rev. Al Sharpton speaks to residents attending a protest rally demanding justice for the killing of Trayvon Martin in Miami in 2012. (Lucas Jackson/Reuters)
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A New York Times investigation into the finances of MSNBC host and Washington heavyweight Al Sharpton has found “$4.5 million in current state and federal tax liens against him and his for-profit businesses,” according to the story by Russ Buettner. Titled “Questions About Sharpton’s Finances Accompany His Rise in Influence,” the story documents a long trail of unmet obligations and a messy web of financial interests spanning nonprofits, personal finances and beyond.

“Mr. Sharpton has regularly sidestepped the sorts of obligations most people see as inevitable, like taxes, rent and other bills,” claims the piece. Even with his tax liabilities, notes the story, Sharpton “traveled first class and collected a sizable salary.”

Though he anchors “Politics Nation” on MSNBC on weeknights, Sharpton is a target of far greater resonance than a cable news host. The longtime rabble-rousing Brooklyn preacher and civil rights activist has become a player of national import under the Obama administration. As explained in an August piece in Politico Magazine by Glenn Thrush, Sharpton had transformed himself into the Obama administration’s “go-to man on race.” After the killing of Michael Brown in Ferguson, Mo., in August, Sharpton established himself as the “de facto contact and conduit for a jittery White House seeking to negotiate a middle ground between meddling and disengagement.”

All of which makes him a large and fair target for a newspaper investigation.

In 1991, Sharpton founded the National Action Network (NAN), which calls itself “one of the leading civil rights organizations in the Nation with chapters throughout the entire United States.” Trouble is, it has achieved its current size without paying the payroll taxes of its employees, according to the Times:

To stay afloat, the nonprofit became reliant on money that was supposed to go to payroll taxes, according to its financial statements. The amount National Action Network underpaid the federal government in taxes went from about $900,000 in 2003 to almost $1.9 million by 2006, records show. Mr. Sharpton, making more money from a new radio contract, tried to help by forgoing a salary from 2006 through 2008 and giving the organization a $200,000 no-interest loan.
In 2007 and 2008, the group’s accountant noted in a financial statement that the organization’s “existence has been dependent upon” loans from Mr. Sharpton and “the nonpayment of payroll tax obligations.”
“These circumstances create substantial doubt about the organization’s ability to continue as a going concern,” the accountant wrote.
In 2009, when the group still owed $1.1 million in overdue payroll taxes, Mr. Sharpton began collecting a salary of $250,000 from National Action Network. The recent Treasury report that called that sort of practice abusive also said only 1,200 organizations in the nation owed more than $100,000 in unpaid payroll taxes, which would put Mr. Sharpton’s group among the most delinquent nonprofit organizations in the nation.

Sharpton told the Times that disagreements with the IRS over how to “classify certain workers” explain the overdue payroll taxes. That said, Sharpton did concede that not all of his books check out: “You can say I’m not a great administrator,” he told the newspaper. “You can’t say that I’m not committed.”

MSNBC has all but invited this embarrassment. As the Erik Wemple Blog has reported, Sharpton negotiated his contract with MSNBC under the stipulation that his work as an activist would continue. In remarks in D.C. last year, Sharpton recalled what he told MSNBC President Phil Griffin about his status: “I said, well, I’m still going to run NAN, I’m still going to be an activist.” Griffin responded positively. “He said, ‘Put it in the contract. We’d never interfere with what you’re doing, your civil rights work,'” Sharpton quoted Griffin as saying.

On one level, Sharpton’s various hats carry implications for the ethics of his work at MSNBC. Being an anchor on a news network while also serving as a big shot at the White House and the head of a civil rights group creates a jumble of undiagrammable — and almost unknowable — conflicts of interest.

Yet the other level of concern is precisely what the Times has exposed: Sharpton Inc. is a sprawling concern, clearly more than one overbooked man can handle. By employing Sharpton as a prominent figure in its news rotation, MSNBC must own the failings of his empire. A spokeswoman for MSNBC says the network has no comment on the situation.