FOX NEWS NETWORK
SHOW: THE O'REILLY FACTOR (20:22 ET)
March 2, 2001, Friday
Transcript # 030203cb.256
GUESTS: Peter Flaherty
Unresolved Problems: Investigating Jesse Jackson's Citizenship Education Fund
O'REILLY: In the "Unresolved Problem" Segment tonight, as we have been reporting, there are many unanswered questions surrounding Jesse Jackson's tax-exempt organizations, and now the National Legal and Policy Center, a conservative foundation which promotes ethics in government, has filed a formal complaint with the IRS concerning Jackson's Citizenship Education Fund.
THE FACTOR has reported that the fund raised about $12 million in '98- '99 but spent only $47,000 on education. Jesse Jackson will not talk to us did respond to the complaint.
(BEGIN VIDEO CLIP, MARCH 2, 2001)
REV. JESSE JACKSON, RAINBOW COALITION: We file our returns every year. We have an audit. It's the government's job to protect its rights, not to allow right-wing extremists to seek to discredit or destroy us.
O'REILLY: Oh, right-wing extremists now. Joining us from Washington is the president of the National Legal and Policy Center, Peter Flaherty, who is also the co-author of the book "The First Lady: A Comprehensive View of Hillary Rodham Clinton." All right. We did our investigation. You did you your investigation. What did you find out?
PETER FLAHERTY, NATIONAL LEGAL AND POLICY CENTER PRESIDENT: Well, we have taken a series of facts that have been noticed by others and applied a legal analysis to them and filed a formal complaint with the Internal Revenue Service. We expect a swift, fair, and complete investigation. By the way, I really regret the fact that Mr. Jackson would reduce himself to name-calling about us. I'd rather that he respond directly to the matters raised in our complaint, the very serious matters. We argue that the Citizenship Education Fund, which is his largest non-profit group, is operating outside of its tax-exempt status, that it's operating more like a business or a consulting service, and that is impermissible under the tax code.
O'REILLY: Well, do you have specifics that you can give us? A couple of examples?
FLAHERTY: We sure do. Most of the concern centers around something called the Wall Street Project. That's a project of the Citizenship Education Fund whereby Jesse Jackson has used his stature and influence to extract hundreds of thousands, millions of dollars from corporate America for the Citizenship Education Fund and also to the private enrichment of his friends and family.
O'REILLY: Can you prove that? Can you prove the private enrichment of his family and friends.
FLAHERTY: Well, we're not in the proof business. That's the job of the IRS. What we can do is show them a fact pattern that suggests that, and I think anybody who looks at the facts in our complaint -- and it's a substantive, 30-page complaint -- would have to conclude that Jesse Jackson is providing important services for corporate America, and they're paying big money for them.
O'REILLY: Yeah. Well, look, I mean, I don't think there's any doubt in my --well, there isn't any doubt in my mind. Now the IRS -- we've been, as you know, investigating this for more than a year, and we cracked the thing open and got the '98-'99 returns. You said he -- they're open and all. What a bunch of baloney. They're not open at all. They don't to want give out anything. But why isn't the IRS -- you've dealt with them before. Why aren't -- why do we have to prod them into investigating him?
FLAHERTY: Bill, sometimes the best way to get something you want is to ask for it, and that's what we're doing with this complaint. I'll also note that during the Clinton administration, the secretary of the Treasury was Robert Rubin, who has big Wall Street credentials, and the Internal Revenue Service is under the Department of the Treasury. Robert Rubin has been supportive of Jesse Jackson's efforts and helped open doors for the Wall Street Project. So it's possible that officialdom at the IRS has been reluctant to take on Jesse Jackson, but, in the face of continued allegations of problems and abuses, we hope that will change.
O'REILLY: Well, you hope it will change. What are the odds of it changing because I don't -- I'm not real optimistic that they're -- you know, this has been rattling around now for almost 20 years. I mean, Jackson's been in trouble before with the IRS, with the Federal Election Commission. Every time they look at him, he comes up, you know, a million or two light. They don't know where it is. And the IRS doesn't seem to have any desire to find out what's really going on here. Or am I wrong?
FLAHERTY: Well, as far as I know, the IRS has not looked into the Citizenship Education Fund or Jackson's other groups for 18 years. I think it's long overdue. You know, Bill, the National Legal and Policy Center in 1993 sued Hillary Rodham Clinton's health-care task force to open up the meetings and records, and we -- when we did that, people laughed at us, but then when the judge ruled the meetings were opened and the records were opened -- and you may remember that the secrecy was the first controversial thing about the task force and, I believe, led to the defeat of government-run and - rationed health care.
O'REILLY: Do you really believe the IRS -- you're going to be able to prod them into looking at Jackson?
FLAHERTY: Well, I think the more attention this gets, the better. I think facts are coming to light all the time. You know, the worst abuse so far -- maybe not the worst, it's not the biggest abuse, but the most dramatic abuse is the situation with the mistress and, presumably, a... couple of months ago, the IRS knew nothing about that. Now it's been in the newspaper.
O'REILLY: Well, you would think -- yeah. You would think the day it came out they would have dispatched a few agents.
Well, listen, Mr. Flaherty, you keep us posted on this. As with all investigations right now in our federal government, I'm not that optimistic, but we appreciate you coming on the program. Thank you.
FLAHERTY: Thank you, Bill.
O'REILLY: Plenty more ahead as THE FACTOR moves along this evening.
Right back.
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LOAD-DATE: March 3, 2001