(FORTUNE Magazine) – On a Tuesday in early May, just back from the Balkans where he had held hands in prayer with Slobodan Milosevic and sprung three U.S. soldiers from captivity, the Reverend Jesse Jackson kept two long-standing appointments in New York. The first, early in the morning, was at Paul Robeson High School in Brooklyn, one of thousands of motivational visits Jackson has made over the years to schools, churches, community centers, and union halls. "I am!" is how he begins at such gatherings, plainly joyful, the words welling up from deep down inside. "I am!" comes the instant response from his audience. "Somebody!" shouts Jackson. "Somebody!" comes the echo. He's 57 years old now, thicker in the chest than he used to be, and there are particles of gray in his mustache. But he can still be vintage Jackson, right out of the rousing civil-rights crusades of the 1960s and '70s.

Jackson's second appointment, at noon, was something else altogether: a quiet tete-a-tete up in Westchester County with someone who hardly needs reminding that he is somebody, thank you very much--Roger Enrico, the chief executive of PepsiCo. It was their first meeting since the Pepsi Bottling Group's $2.3 billion IPO in March, when Enrico, bowing to enormous last-minute pressure from Jackson, overruled his own CFO and treasurer and made Utendahl Capital Partners, a black-owned investment bank, co-manager of the offering. That gave Utendahl, a seven-year-old firm founded with support from Merrill Lynch, a coveted spot on the cover of the prospectus, plus a cut of the $19 million management fee.

Despite PBG's pallid performance since the IPO (it opened at $23, but tumbled as low as $20 and only lately returned to near its offering price), the Pepsi deal sent the loudest signal yet that Jackson, through his two-year-old Wall Street Project, is actually prying open doors long shut to minority financiers. It came on the heels of two other deals bearing Jackson's fingerprints: a $60 million investment by Georgetown Partners, a ten-year-old private equity firm, in a joint partnership with GTE to buy part of Ameritech's wireless business; and the selection of Blaylock & Partners, a six-year-old firm founded with support from Bear Stearns, as co-manager in a record-breaking $8 billion bond issue from AT&T.

Like most initiatives undertaken by Jackson, however, the Wall Street Project's successes are liberally sprinkled with controversy. Jackson's considerable persuasive powers are backed, implicitly or otherwise, by the threat of boycotts and bad publicity, and even some of the Wall Street Project's intended beneficiaries worry that by playing hardball with clients, Jackson only makes it tougher for minority firms to gain permanent entry into the cozy investment banking fraternity. Other minority financiers bitterly accuse Jackson of favoritism: They say how hard he works on your behalf depends on how generously you contribute to the not-for-profit Project.

And then there's the fundamental question: Why is Jesse Jackson, after all these years of advocating on behalf of the working class and the poor, troubling himself with the plight of such an elite segment of the population? Chester Davenport, for instance, the managing director of Georgetown Partners, recently sold his automobile-emissions-testing business for $280 million and is said to have a personal net worth of around $100 million. Does helping Davenport become really, really rich, as opposed to merely rich, truly advance the cause of people who need help most?

To a cynic, the answer's easy: Jackson's crusade on Wall Street has less to do with goodness than with the nation's Dow-addled zeitgeist and Jackson's compulsion to find the spotlight, wherever it may be. In March, when Jackson formally took himself out of the running for the 2000 Democratic presidential nomination, he said he wanted to spend "less time inside the Beltway" and more time on Wall Street, "challenging the finance culture." Jackson has found no shortage of things to challenge. The Wall Street Project, which he launched in 1997 as an outgrowth of his social-action Rainbow/Push Coalition, aims to create more entry-level jobs for blacks on Wall Street, promote diversity on corporate boards, promote black ownership of professional sports franchises, place institutional funds with minority money managers, and foster what Jackson calls "vehicles for the transport of capital" from Wall Street to Appalachia and Mississippi. Lately, however, the focus has been on rainmaking for the two dozen or so minority- and women-owned banks.

Cynics notwithstanding, few would argue that Wall Street provides a level playing field for minorities and women competing with white male investment bankers for the biggest deals. According to numbers compiled by Securities Data/Thomson Financial, Blaylock & Partners, far and away the leading black-owned firm, ranked 25th among corporate bond issuers in 1998, with a scant 1.2% market share; Blaylock's market share on the equity side, while also first among black-owned firms, was only 0.9%. Clearly some minority investment bankers have enjoyed a modicum of success; a few even played roles in major bond and equity deals before Jackson decided to take on the Street. "We know we have to bring the same intellectual capacity and execution that Goldman and Morgan Stanley bring," says CEO Ron Blaylock. "That's the only way we know how to play." Still, none of these firms have advanced beyond the boutique stage. Many are even losing ground. "Things are not going well for African-American [investment bankers]," says Leo Guzman of Guzman & Co., a Hispanic-owned firm that participated in the Pepsi IPO. "There were five or six major firms a few years ago that are no longer in business or barely in business."

Even so, why would the nation's most visible African-American leader focus on investment bankers rather than on any number of needier groups? FORTUNE put the question to Jackson in the parking lot outside Little Rock Baptist Church in Gulfport, Miss.--about as far from Wall Street as you can get and still be in the U.S. It was the week before Jackson's trip to the Balkans, at the start of an exhausting eight-day bus tour through the poorest state in the Union. In a few moments Jackson would speak to an expectant throng inside the church. (Every time the sanctuary's side door opened, song poured out.) Here in the South, Jackson is clearly in his element, surrounded by people who revere him as a hero of the civil-rights movement. So where in all this does the Wall Street Project fit in?

Jackson says he merely wants American capitalism to embrace the people it has mostly ignored. "I'm an enlightened capitalist," he says while standing just outside the church. "Capitalism without democracy is a runaway greed machine. Informed by democratic values, it is inclusive." Wealthy black entrepreneurs can play a unique role in that process in several ways. For one thing, says Jackson, a black financier may provide capital to black-owned businesses or to minority neighborhoods that others might turn down. "He's less likely to red-line," Jackson says that evening in Mississippi. "He's more likely to see the advantages of expanding into territory others have been blind to." A black who succeeds on Wall Street also becomes a valuable role model. "If he can do it, it means that others can do it too." And he can create opportunities for other minorities and minority-owned businesses. "The ripples that come from the big rock hitting the water just go on and on and on," Jackson says. "So it's not just a matter of him getting something. It's him and the lawyers, the ad agencies, and the vendors he will hire."

Jackson would also like to help shatter Wall Street's ancient glass ceiling for talented blacks, a theme he came back to repeatedly over the next several days. "It's one thing to have people who, somewhere along life's journey, got sidetracked or broken and have been convinced they are not worthy of a certain level," Jackson tells FORTUNE. "So they settle for level four on a scale of ten. But the guy or lady who plays by the rules, doesn't get trapped in jail or drugs, doesn't get sidetracked by teen pregnancy, scores high on the SAT, goes to the white school, white classmate, white roommate, makes good grades--at graduation time, they [and their white classmates] go in two different directions! Those [blacks] have no capacity to rationalize why they paid 'ten' dues and they're not a 'ten.' "

John W. Rogers Jr., president of Ariel Capital Management, knows only too well what Jackson means. Both his parents graduated from law school at the University of Chicago, but as blacks in postwar America, they never even got the chance to work at a big downtown law firm. A generation later, Rogers, who went to Princeton, says that for all his successes, he still encounters race obstacles that cost him business. "I have a lot of discussions with [white] friends who are part of the country club elite," he says. "They just don't realize how much the game is skewed by relationships built up over a lifetime."

Making useful connections has never been Jackson's problem--and his relationships with an enviable cross-section of the nation's rich and powerful are one huge reason behind the Wall Street Project's successes to date. Jackson is tight with the President. He's on a first-name basis with Enrico, AT&T CEO Michael Armstrong, and Richard Grasso, chairman of the New York Stock Exchange. He has breakfast from time to time with Citigroup's Sandy Weill and once joined him for an evening at the Alvin Ailey Dance Theatre. Anybody he wants to reach, he can, period. His fundraising prowess is legendary, whether he's behind the pulpit at a ramshackle church in rural Mississippi ("All those who want to and are able to contribute at least $100, please stand up!") or at a conference table in a corporate boardroom in Manhattan. For instance: Corporate sponsorships for this year's Wall Street Project black-tie gala on the floor of the exchange totaled at least $1.25 million.

But once he has everybody's attention--and their money--then what? Like all gifted politicians, Jackson prefers accommodation to confrontation. "He knows that a hunger strike in the middle of Wall Street is not the right tool," says Guzman. So Jackson's pitch begins with an appeal to enlightened self-interest. "Let's talk business," he likes to say. He argues forcefully that corporate America, its vision limited by "cultural blinders," has imposed artificial limits on its own profits and growth--just as baseball's owners deprived the game of deserving talent and sold the fans an inferior product before Branch Rickey signed Jackie Robinson in 1947 to break the sport's color barrier. "We don't know how good American business can be," Jackson pronounces to corporate leaders. "We have not yet put all the players on the field."

When business logic is not enough, Jackson has other arrows in his quiver. He is a minister, don't forget, capable of making even Milosevic be still and bow his head. And he clearly has history and morality on his side: It would be hard for the Wall Street establishment to argue that it has never excluded minorities from positions of power.

Thus armed, Jackson enters negotiations with the assumption that everyone across the table wants to do the right thing. One of his favorite adjectives is "decent," as in "he's a decent guy," a phrase he used at different times to describe Enrico, Weill, Armstrong, and Texaco's Peter Bijur (but not Milosevic!). It's a powerful tactic. Knowing Jackson thinks you're a "decent guy" makes it easier to give him what he wants. This strategy provides the "smoothest ride," says Jackson. "People like to think of themselves as being basically good people who want to do what's morally right.... They want to sleep with themselves at night and face their children."

If gentle persuasion fails, Jackson can employ less subtle tactics. According to those with knowledge of the negotiations, Pepsi's willingness to restructure its offering just hours before the stock began trading was not purely a reflection of Enrico's "decency." Those insiders say that Jackson threatened Enrico with a messy public protest, even a boycott, unless he took steps to ensure that the makeup of the Pepsi Bottling Group's IPO syndicate more closely reflected the fact that blacks drink Pepsi too and celebrity endorsers like Ray Charles help sell it.

Enrico didn't want to talk to FORTUNE about the IPO, instead issuing a statement that read in part: "Rev. Jackson makes a very compelling case for minority business interests." Pepsi spokesman Dick Detwiler denied that Jackson bullied Enrico. But even if the threat was never explicit, it was clearly on the table. Says one senior-level investment banker whose firm lost some of its management fee after it had to make room for Utendahl: "Pepsi capitulated."

Even so, not everyone in Jackson's camp was thrilled with the way the story ended. The stock price dove sharply about an hour after it was issued. As a result, some of the investment banks that were not co-managers--that is, those that did not receive a cut of the management fee--may have actually lost money on the deal. "I think everybody, with the best intentions in the world, wanted minorities to [get a bigger share of the deal]," says one minority member of the Pepsi syndicate. "[But] it happened not to have been a particularly strong deal."

At least Utendahl earned a profit. The lion's share of the management fees and shares went to lead managers Merrill and Morgan. Utendahl and the eight other co-managers each received at least $1 million, according to bankers familiar with the deal. The other co-managers each received 6,417,750 shares; limited capital on hand prevented Utendahl from taking more than 500,000 shares. Of his firm's participation in the deal at that level, CEO John Utendahl says, "It's a beginning."

Small victories notwithstanding, a deeper concern among black bankers is that Jackson might be playing it a bit too rough. Threatening boycotts and the like may ultimately ruin client relationships carefully cultivated over the years and poison the climate for future deals. "A lot of people are nervous about tapping into Jesse too much because they know there's a big backlash out there," says a black Wall Street financier. (Like almost everybody else interviewed for this story, he was afraid to say anything on the record even remotely critical of Jackson or the Wall Street Project.) Another minority banker worries about what happens when Jackson moves on. "You've gotten paid, but you don't have a relationship [with the clients]," he says. "It's not as though they're going to use you the next time, unless they're forced. It's not as though they're going to be a favorable and willing reference. I think going to war is bad for everyone."

Still others are unhappy with what they perceive to be Jackson's favored treatment of a select few. Jackson does not levy a fee for introducing firms to the right people, but it is understood, say executives at black-owned firms, that black-owned firms are expected to support the Wall Street Project monetarily. A spokesman for the Project denies that the size of a firm's contribution has anything to do with the effort that Jackson expends on its behalf. "When we send letters out," she says, "we include the names of everybody who's a member of our trade bureau, whether they pay a minuscule amount of money or a lot." But others say money talks. "There's a group of people that are not ever going to be a beneficiary of what [Jackson] has done because they're not paying the piper enough to get there," says the principal officer of one minority firm.

It's hardly a surprise that not everybody's happy with Jackson's m.o.--or even (let's be grownups here) that bigger donors might get better access. The real question is whether Jackson is making a difference. At least one black money manager who admires Jackson and generally supports his causes is skeptical. "It's a nice thing," he says. "But when push comes to shove, we're not talking about any significant business or profits or revenues or responsibility or power."

Maybe not--yet. But both the Pepsi and AT&T deals helped put money into black bankers' pockets, raised awareness of several black firms, and perhaps put the Street on notice that the good old ways of parceling out investment banking profits are no longer immune to challenge. True, the beneficiaries of the Project are better heeled than Jackson's traditional constituency. But so what? The funny thing is, given Jackson's strengths--his skill as a negotiator, his access to people in high places--the clubby world of investment banking may be one place where Jackson can make a noticeable difference in a hurry.

Hoping for a dramatic follow-up to the Pepsi deal, Jackson tried mightily to put a black investment bank in a leading role in the recent highly anticipated Goldman Sachs IPO. He failed, despite a personal plea to Goldman CEO Henry Paulson. Soon afterward, however, Goldman completed a $1.8 billion bond offering featuring two minority firms--Blaylock and Williams Capital Group--as co-managers. Several days later, when Seagram announced a secondary stock offering, Blaylock was in on that too, again in a coveted co-manager's position. What's telling in this deal is that Jackson didn't lift a finger. He didn't have to. Says a banker familiar with the deal: Seagram "wanted to get ahead of the Reverend." If that isn't progress, what is?