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Nonprofit Law Prof Blog

Al Sharpton’s National Action Network Campaign Intervention Workaround

By nonprofitlawprof

 

Journalists have their ethical boxers and panties in knots amid reports that the Kamala Harris campaign made a half million-dollar “donation” to the National Action Network in October right around the time Al Sharpton hosted Harris on MSNBC. NAN is a (c)(4), so it is limited to insubstantial campaign intervention.  Sharpton is President of NAN and also a talking head on MSNBC’s show, PoliticsNation. Nice work if you can get it. The boring, six-minute interview was a complete softball, though it obviously didn’t make much difference.  Journalists, especially at MSNBC, are asking whether Big Al should have disclosed the half million dollar transfer and whether his failure to do so compromised his and MSNBC’s journalistic credibility. 

Sharpton didn’t say “vote for Harris,” exactly. And he shrugs off journalist’s ethical criticisms by simply admitting that he has never claimed to be a journalist.  He just plays  one on TV, I guess.  He isn’t a tax or nonprofit lawyer, that much is sure. But he might actually make a pretty good one based on the step transaction he seems to have pulled off.  Here was the problem:  

Big Al can’t accept payment for booking interviews on MSNBC’s platform. Because agents may not exploit a principal’s assets for personal gain. His nonprofit can’t endorse Harris for president too much either.  But Sharpton apparently wanted both of those things nonetheless.  So he employed a disguised sale of MSNBC air time using NAN as the intermediary. Pretty smart, I’d say. Here are the  steps:

  1. Harris makes a half million-dollar donation to NAN
  2. Sharpton, as PoliticsNation’s executive editor, invites Harris to appear on the show for an interview.  
  3. Sharpton engages  in a nationally televised though hardly watched (let’s just be honest) interview that is really a campaign ad.  
  4. NAN uses the donation for its charitable purpose, including the payment of Sharpton’s “reasonable salary.”

It is all pretty obvious and yet fairly bullet-proof. Despite the obvious, there is hardly a credible legal case that NAN engaged in campaign intervention. Seriously. I think Al can even get away with any contractual or fiduciary duty problem he might have with MSNBC.  Al Sharpton and NAN are two separate legal persons, one natural and the other a guy with a slick haircut and a lifelong hustle through his tax-exempt organization.  Sharpton could have even said, “vote for Harris” without running afoul of tax laws according to Situations 3 – 6 in Revenue Ruling 2007-41.  Even though his political persona is thoroughly intertwined with the National Action Network, he can still have and express personal views.  Just like any other nationally recognized figure who’s base is a (c)(3) or (c)(4).  Sharpton’s views aren’t necessarily NAN’s and NAN’s income is not necessarily his.  Those two associations must necessarily exist for there to be a tax or contract law problem for NAN and Al.  What’s more, the “context” that is supposed to tell us whether Al’s interview constitutes NAN’s vicarious endorsement of Kamala Harris is attenuated and hopelessly ambiguous.  Maybe Al just scored a big innocent interview with a presidential candidate right before the election entirely unrelated to the candidate’s “unusual grant” to his nonprofit.  It could happen!  

Seriously, this is all just more evidence that the Johnson Amendment is hopelessly unenforceable, easily avoidable, and facially unconstitutional. It is a waste of time.

darryll k. jones