Sharpton Campaign Faces Funds Questions

For months, Al Sharpton's (search) presidential campaign has been supported indirectly by "love offerings" — donations by churchgoers to minister Sharpton, who then lends money to candidate Sharpton.

The arrangement — unusual among presidential candidates but legal within restrictions — has helped keep his campaign going. Federal Election Commission (search) documents show the campaign is at least $110,000 in debt to Sharpton, who also draws ministerial income from such sources as book sales and speeches.

As Sharpton seeks vital federal matching funds, the loans from minister to candidate may raise obstacles. FEC rules bar candidates who receive matching funds from lending their campaigns more than $50,000. An FEC spokesman said the commission, ultimately, would decide the matter.

Campaign manager Charles Halloran contended the limitation applies only to debts incurred after receipt of matching funds, although one watchdog group disputed that interpretation.

The Sharpton campaign is carrying a debt of nearly $500,000 and has only scant thousands left in the bank, even after a weekend fund-raiser in Detroit. The $150,000 in federal matching funds is so important to the campaign that it has already taken out a bank loan in anticipation of getting it.

Halloran, who is among the Sharpton campaign creditors, said the campaign is laboring under heavy debt, but he insisted it will survive with matching funds and fund-raising in New York and California.

Questions about finances have recurred throughout Sharpton's career as an activist and leader of the Harlem-based National Action Network. He once pleaded guilty to not filing a state income tax return, and, recently, the FEC fined the campaign $5,500 for filing late financial disclosure papers.

A former campaign worker said he became disenchanted with what he saw as a lack of financial discipline.

"I thought that we would be able to raise money, pay staff, and have a real campaign — raise some issues and raise some hell," said Kevin Gray, Sharpton's former coordinator in South Carolina.

"There was no focus and discipline as it relates to raising money, and that's not the way you run a campaign," said Gray, who is owed $38,000 by the campaign's own accounting.

When Sharpton visits churches around the country, he usually gets a "love offering," passing the plate and receiving financial support in envelopes given to him, not the campaign.

FEC officials say nothing is improper with a candidate raising money through a personal profession as long as there is no explicit appeal for votes. Sharpton's aides say he does not ask churchgoers to vote for him.

The National Legal and Policy Center interest group has filed an FEC complaint alleging that the National Action Network, a nonprofit, is in effect being used to pay campaign expenses. The campaign denies the claim.