By Albert Samaha
By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
The latest Al Sharpton brouhaha is not a racist's dream come true: Contrary to first reports, an alleged scam in 2003 involving leading African American pols and businessmen is not about fried chicken. It's about a hedge fund and campaign donations. If you believe Sharpton, it is about nothing at all.
When the New York Post picked up a Philadelphia Inquirer story last week about Sharpton's being seen on a surveillance video accepting donations collected by two men indicted for corrupting Philadelphia's city government, the Rev detected a political vendetta against him. He told the Voice late last week that he might ask for a special prosecutor to probe why the surveillance was conducted and why it was leaked.
The videotape reportedly had Sharpton meeting in May 2003 with restaurant magnate La-Van Hawkins and bond lawyer Ronald White, two fundraisers for his presidential campaign. According to accounts of the tape, when White hands Sharpton a bundle of checks, Sharpton asks for $25,000 more. In a separate wiretap, Hawkins tells White that he suspects Sharpton had not reported some of the campaign cash they raised for him.
Not so, sayeth the Rev, who suspects that the $25,000 he asked for in the videotape was likely just a reference to the quotas he established for each presidential fundraiser. He says Hawkins was merely confused about when campaigns were to file reports with the Federal Election Commission.
"The money they raised had been reported when in fact it was donated to the campaign," Sharpton proclaimed at an April 12 press conference in front of the Post's Sixth Avenue headquarters. "There was no probable cause for an FBI probe of anything." So maybe the videotape was a "Watergate thing, where they were really surveilling my campaign," Sharpton speculated, or perhaps race was a factor: "I certainly think that there is a pattern here, from [Philadelphia mayor] John Street to the NAACP to me. That is very curious." What's more, the story touched the other major black leader in New York City politics, City Comptroller Bill Thompson.
According to newspaper accounts, Hawkins and White wanted to talk to Thompson about getting an investment from the city's pension funds so Hawkins could buy fried chicken restaurant franchises. Thompson, who is accused of no wrongdoing, did meet with White in May 2003. Sharpton set the meeting up. But the two men didn't talk about fried chicken, Thompson's office says; they discussed a hedge fund. New York City's pension funds don't deal with hedge funds, so nothing came out of the talk. White died of cancer in November 2004 after being charged with bribing Philadelphia's treasurer to get sweetheart deals for himself and other backers of Philly mayor John Street. Hawkins is now on trial in that corruption case and faces a maximum of 125 years in jail if convicted on all counts.
Sharpton claimed last week that simple common sense was his best defense against the suggestions of dirty dealing. "The whole premise is absurd," he told the Voice. Why would his campaign want to keep any donations secret, when it was desperate to qualify for federal funds matching the donations they'd collected? And why would Hawkins need to use secretive campaign donations to buy influence with the Rev when, as Sharpton says, "They could have hired me," as others have done.
In fact, Hawkins did hire Sharpton. According to Sharpton's 2003 personal financial disclosure form, Hawkins Food Group paid him $25,000 for "consultation." Sharpton declined to tell the Voice what the consulting involved. "We have a long business relationship," he says. "There's no need for him to give to my campaign to get me to do something."
As for how the allegations in the Post/ Inquirer stories relate to his obtaining matching funds, that's complicated. Federal matching-fund rules create incentives to collect small donations from a lot of different people in a range of states. But while campaigns like to get matching funds, they also need money in any legal form they can get it, if only to sustain their operations until matching money is released.
Back in March 2003, La-Van Hawkins and his wife, Wendy, each gave the maximum $2,000 to Sharpton's campaign, then hosted a reception for the candidate in Atlanta to which they flew Sharpton in a private jet. Sharpton's campaign reports showed no expenses for the affair, so the expense of the party could be seen as another donation by the Hawkinses to Sharpton. A watchdog group, the National Legal and Policy Center, complained to the FEC that the Hawkinses' hosting the party violated campaign finance law because they'd already maxed out on donations.
Like any good fundraiser, the party was a magnet for big donations. Around the date of the party, a slew of $2,000 donations came in, 26 of them over six days. One was from Atlanta-based consultant Clinton Barrow, who attended the party and described it as "a very pleasant affair." Marsha Jews, a Manhattan resident, says it was nothing fancy. She told the Voice that she forked over the maximum donation because she felt Sharpton was the only candidate who could really challenge the Republicans on the deficit, the war, and the rollback of rights for minorities, gays, and women. "Sharpton was a voice that could tell the real deal about what's going on in this country," she says.
But a Detroit news anchor, Carolyn Clifford, is on record as donating even though it was her husband who wrote the check. Patrina Dobbins, a hairdresser from outside Detroit, said in a phone interview last week that she does not recall the $2,000 donation the FEC records say she gave. Her husband and a co-worker also gave the maximum.
Some of the campaign finance curiosities in Sharpton's reports pop up in many campaigns. In Sharpton's case, some of these are more interesting than others. The comptroller's office would not say what hedge fund Thompson and White discussed in their May 8, 2003, meeting. But the federal indictment says White was involved in a hedge fund run by White's largest contributor to the Philadelphia mayoral campaign. Press reports identified White's largest contributor as John P. McNiff, head of Longwood Investment Partners and a hedge fund called Discovery Capital.
McNiff did not give Al Sharpton any campaign money. But his then 63-year-old mother, Ann McNiff, didshe donated the maximum $2,000 on February 26, 2003. The next day, McNiff's maternal uncles Peter and Stanley Marcinkewicz gave $2,000 and $1,000 respectively. For all three donors, it was their only political donation at the state or federal level recorded in online databases. Ann McNiff died last August. A message sent to the Marcinkewicz brothers through another relative was not returned. John McNiff did not return phone messages.
McNiff was not implicated in any way by the Philly corruption case. It was during that trialwhich went to the jury last weekthat word of the surveillance of Sharpton emerged, when a federal prosecutor indicated in court that evidence about Sharpton may have been referred to another jurisdiction.
It's entirely possible that Patrina Dobbins, her co-worker, and her husband all decided to make their first federal political donations on successive days, to give the maximum amount, and to give it to Sharpton almost a year before the first presidential primaryjust as Marsha Jews did. It's also possible that three relatives of the hedge fund guru linked to Ron White genuinely supported Sharpton and decided to cut him big checks. Sharpton, responding to a similarly speculative comment, said at last week's press conference, "Anything is possible."
It might be impossible to know whether Sharpton's campaign intentionally did something wrong, because his campaign finances were disorganized and intimately linked with those of Sharpton's nonprofit National Action Network. The FEC raised numerous complaints and is still trying to get back the $100,000 in matching funds. Onetime campaign manager Frank Watkins says Sharpton owes him about $60,000. But Watkins says he doesn't think Sharpton committed any of the wrongs implied by the reports of the videotape.
Sharpton says that, aside from a letter notifying him that he'd been picked up by FBI surveillance, he hasn't been contacted by anyone from the FBI or U.S. Attorney's offices. "In fact, there is no allegation," Sharpton said during the presser outside the Post.