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Originally published Saturday, May 10, 2008 at 12:00 AM

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Sharpton owes nearly $1.5 million in taxes, other penalties

Big corporations give him money. Presidential candidates seek his endorsement. He has influential friends in Congress and the governor's...

The Associated Press

NEW YORK — Big corporations give him money. Presidential candidates seek his endorsement. He has influential friends in Congress and the governor's mansion.

The Rev. Al Sharpton, 53, has emerged during the past decade as perhaps the nation's most prominent civil-rights leader, a status demonstrated again this week when he led protests against police brutality that briefly shut down six of Manhattan's major bridges and tunnels.

But government records indicate he and his business entities owe nearly $1.5 million in overdue taxes and associated penalties.

The U.S. attorney is investigating his nonprofit group, a probe that Sharpton brushes off as the kind of annoyance civil-rights figures have come to expect from the government.

"Whatever retaliation they do on me, we never stop," he said. "I think that that is why they try to intimidate us."

In the past year, Sharpton's lawyers and the employees of his nonprofit group, the National Action Network, have been negotiating with the federal government over the size of his debt, which they dispute. The group also has been trying to pay off tens of thousands of dollars it owes for failing to properly maintain workers' compensation and unemployment insurance.

Charlie King, the organization's interim executive director, said Sharpton and the group were unprepared for their rise in stature in recent years and had trouble dealing with big jumps in donations and income.

"The infrastructure was trying to keep up with that pace, and it was not a perfect fit," he said Friday. "The National Action Network may not have been perfect, but nothing was going on that was untoward."

King said the organization has new accountants and a new administrative team, and the group recently filed long-overdue tax returns.

Sharpton's own debts include $365,558 owed in New York City income tax and $931,397 in unpaid federal income tax, according to a lien filed by the Internal Revenue Service (IRS) last spring. His for-profit company, Rev. Al Communications, owes the state an additional $175,962 in delinquent taxes.

As for Sharpton's personal tax debt, King said Sharpton has started paying it off but contends that faulty record-keeping by the National Action Network led the government to overestimate his tax liability.

Tax headaches are not new for Sharpton. The minister has been assailed throughout his career for running up big tax debts and failing to abide by rules governing his charities and election committees. He is perpetually being sued for failing to pay his bills.

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If Sharpton is worried about his latest problems, you'd never know it. He is pressing ahead with his latest campaign: an effort to persuade the Justice Department to bring civil-rights charges against New York City police detectives who fired 50 shots and killed an unarmed groom, Sean Bell, on his wedding day. The detectives were acquitted of state charges in the shooting last month.

Sharpton has been investigated before and always walked away clean.

In 1990, he was acquitted of tax fraud and charges that he stole from one of his charities. He followed that up with what was essentially another victory in a tax case by pleading guilty to a misdemeanor charge of failing to file a state return.

In the latest probe, the official overseeing the investigation is U.S. Attorney Benton Campbell, the same Brooklyn-based prosecutor Sharpton is urging to file criminal charges in Bell's death. Campbell's office has said it is reviewing the case but declined to comment further.

Since the late 1990s, Sharpton's civil-rights group has grown from a small outfit, with a few hundred thousand dollars in annual revenue, to an organization that routinely takes in $1 million to $2 million a year, thanks partly to corporate support.

Donors have included Anheuser-Busch, which gave more than $100,000 last year, and Forest City Ratner, a real-estate development company that courted black leaders for support of a plan to build a National Basketball Association arena in Brooklyn. PepsiCo, for several years, gave Sharpton a compensated position on one of its advisory boards.

The group also enjoys financial support from the state's top politicians.

New York Gov. David Paterson has transferred at least $28,000 from his re-election committee to the National Action Network since 2001. Rep. Charles Rangel, a top Democrat in Congress, has been another major backer, giving at least $83,000. New York Attorney General Andrew Cuomo has given $10,000.

Copyright © 2008 The Seattle Times Company

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