Attorney General Jim Ryan asked for scrutiny of the group's finances after Jackson acknowledged the group paid $35,000 to a former top staff member who bore the civil rights activist's child out of wedlock.
``The evidence is they are in compliance with the law,'' Ryan said Tuesday.
``There's no basis for me to launch an investigation into Operation PUSH,'' he said.
Ryan said he is prepared to give Jackson's organization $300,000 in grants to teach women computer skills and educate female prisoners about AIDS. The money comes from Nine West, a White Plains, N.Y.-based women's shoe company that settled a nationwide price fixing lawsuit last year for $34 million.
Since the money doesn't come from taxpayers, Ryan is free to spend it without approval from taxpayers. Ryan committed to the grants last year, before the controversy over Jackson's finances arose, said Ryan spokesman Dan Curry.
However, Jackson said he isn't sure his organization will accept the grants. ``Given the controversy surrounding this, Operation PUSH is considering not accepting the grants that we never asked for in the first place,'' Jackson said.