Tax probe dropped against Sharpton

July 22, 2008 4:28:40 PM PDT
Al Sharpton's lawyers say a federal probe of the minister's finances has cleared him of any criminal wrongdoing.The decision not to press charges came after prosecutors concluded that Sharpton's substantial tax problems were better handled civilly by the Internal Revenue Service, and not a criminal court, his lawyers said.

The investigation was the latest in a string of government inquiries into Sharpton's finances, dating to his earliest days as a civil rights figure.

Each time, he has emerged unscathed. In the late 1980s he was acquitted of stealing from a nonprofit group. A state case accusing him of evading income taxes also fizzled; he pleaded guilty to a misdemeanor charge of failing to file a tax return and paid a small fine.

This latest probe became public last year after several of Sharpton's aides received grand jury subpoenas.

The IRS and other tax agencies claim that Sharpton owes well more than $1 million in back taxes and penalties. His organization, the National Action Network, also faces a hefty tax bill.

Sharpton told The Associated Press he was glad to be in the clear.

"I'm just grateful to God and my family, and all of our supporters," he said.

He said that both he and the civil rights group would pay off their debts, clean up their books and complete a reorganization intended to ensure the group's long-term fiscal stability.

"We learn from every experience to be more cautious, more accountable," he said.

A spokesman for the U.S. attorney in Brooklyn declined to comment.

After news of the probe became public in December, law enforcement officials said the inquiry was focused on potential tax violations and possible election law violations during Sharpton's 2004 run for president.

Authorities had ample reason to be suspicious. Both Sharpton and the National Action Network had, for years, been notoriously poor bookkeepers.

The civil rights group had failed for several years in a row to file income tax returns, obtain workers compensation insurance, or disclose how much it was collecting in donations or paying its top employees, as required by law.

Many of those problems have now been resolved, and both Sharpton and his group have also begun paying down their sizable tax debts, his lawyers said.

The end of the criminal probe was first reported Tuesday by the New York Daily News.

Michael Hardy, Sharpton's longtime attorney, said he hoped the resolution of the criminal probe would silence suggestions that the minister was profiting personally from the dealings of his nonprofit group.

"I think this really clears the air for everyone," Hardy said.

Sharpton, according to public tax filings and disclosure forms during his presidential campaign, receives little or no salary most years from the National Action Network.

His sizable personal income is derived from several high paying media jobs, including his nationally syndicated radio show, book royalties and speaking fees.