Eric Holder at the National Action Network breakfast/IMAGE: C-SPAN via YouTube
For the past two weeks NLPC has documented the racial equity audit industry: how companies under pressure from Democratic-aligned union investment funds paid former Obama Attorney General Eric Holder nearly $2,300 an hour at Covington & Burling to certify their racial justice compliance, and how a second Obama attorney general — Loretta Lynch at Paul Weiss — conducted similar racial equity audits for companies including Amazon and Chevron, while WilmerHale built its own practice serving Google, McDonald’s, and Home Depot.
Today we follow the money one step further — into a set of parallel corporate payments that, taken together, reveal something more than a compliance industry. They reveal a protection ecosystem, and NLPC has documented its roots for years.
The story begins with Al Sharpton. For more than two decades, NLPC has tracked how Sharpton’s National Action Network solicited and received corporate donations following public pressure campaigns by threatening boycotts, protests, and the application of the racism label to companies that failed to cooperate. InfluenceWatch documents the pattern in detail, including NLPC’s own characterization: Peter Flaherty, president of NLPC, has called Sharpton’s operation “quite clearly a shakedown operation.” NLPC’s late chairman Ken Boehm put it more directly to the New York Post: “Al Sharpton has enriched himself and NAN for years by threatening companies with bad publicity if they didn’t come to terms with him. Put simply, Sharpton specializes in shakedowns.”
The pattern documented by NLPC and others is consistent: Sharpton threatened a boycott of General Motors over a Bronx dealership closure in 2006; GM began donating to NAN in 2007. He threatened American Honda over minority hiring in 2003; Honda began sponsoring NAN events shortly after. He threatened a Pepsi boycott over advertising in 1998; Pepsi hired him as a $25,000-a-year adviser and he held the position for nearly a decade. In multiple cases, companies criticized by Sharpton later became financial supporters of NAN.
NAN’s corporate donor list is the next piece of this puzzle. Sponsors of NAN’s annual conventions have included AT&T, Walmart, Comcast, McDonald’s, Coca-Cola, Home Depot, Verizon, and Macy’s — a roster that overlaps substantially with the companies that later paid for racial equity audits. That overlap is not coincidental. It describes companies that had been navigating activist racial pressure for years, and had learned that paying — in one form or another — was the path of least resistance.
Consider Verizon. The telecom giant was a documented NAN convention sponsor and in May 2022 publicly announced it had commissioned a racial equity audit from “a team from Covington & Burling LLP, led by former Attorney General Eric Holder.” Verizon named Holder specifically in its announcement — one of the few companies to do so. The same company that had been paying Sharpton’s organization for years was now paying Holder’s firm. The activist had changed; the mechanism had evolved; the underlying transaction — activist threatens, company pays, pressure eases — remained the same.
McDonald’s appears on both lists as well. A documented NAN convention sponsor for years, McDonald’s in 2022 faced a 55.1% shareholder vote pushed by SOC Investment Group demanding a civil rights audit. McDonald’s hired WilmerHale to conduct a review that took over two years. Home Depot, another NAN convention sponsor, faced a 62.8% shareholder vote for a racial equity audit in 2022 and subsequently engaged WilmerHale for the same. The companies were not choosing between paying Sharpton and paying BigLaw. They were paying both, through different channels, to different recipients, simultaneously.
The starkest illustration of this parallel payment ecosystem comes from Wells Fargo. As documented in NLPC’s report two weeks ago, Wells Fargo hired Covington & Burling for a racial equity audit beginning in September 2022. Around the same time, Wells Fargo gave the NAACP a $50 million grant — described by the NAACP’s own president as “the single largest donation the NAACP has ever received from a corporation.” The bank was paying Holder’s firm to certify its civil rights compliance and simultaneously writing the largest check in NAACP history to the nation’s most prominent civil rights organization. These transactions appear on different line items in Wells Fargo’s financial disclosures. Viewed together, they describe a company managing activist pressure across multiple payment streams at once.
There is an important distinction between the Sharpton model and the BigLaw audit model that deserves acknowledgment. When companies paid NAN, the money went to a nonprofit that Sharpton controlled personally, and from which he drew millions in compensation. When companies paid Covington or Paul Weiss or WilmerHale, the money went to law firms as professional billing — firms whose partners included Holder and Lynch, but who are legal professionals, not activists. The mechanism is different. The legal character of the transactions is different. But the incentive structure that produced them — activists threaten, companies pay, pressure eases — is structurally identical. That is not a coincidence. It is how corporate America learned to manage racial pressure campaigns over several decades, and the racial equity audit industry was the natural commercial evolution of that learned behavior.
The word NLPC has used for years to describe the Sharpton model is “shakedown.” Whether that word applies to the BigLaw audit ecosystem is a question companies’ shareholders should be asking of their boards.
What is documentable is this: the same corporations that had been paying into Sharpton’s activist apparatus for years found themselves, after George Floyd‘s death, paying into a new apparatus — more expensive, more credentialed, more defensible in a proxy statement, and run by former attorneys general rather than a Harlem preacher. Whether they were buying racial justice compliance or buying relief from activist pressure is a question those boards have never been asked to answer publicly.
