I think it's worse than the KKK. The KKK merely have an empirical claim, that races have different inherent abilities, including intelligence, and a political claim, that races should be kept separate in their own societies. Some go beyond that, but that's their official view. This guy is an outright bigot who thinks black people should be like sheep, accepting a view simply because most other black people do without the freedom to disagree and use reasoning to do so. He's also relying on outdated racial narratives and evil stereotypes to accuse these people of something that he could not say about white people, which means black people are somehow subject to a lower moral evaluation and moral subordination if they commit certain offenses when white people aren't for the same actions. What's worse is that it's specifically designed as a method of false witness to destroy someone rather than simply using someone as a means to an end without desiring bad for that person as a goal in itself. Even slavery didn't do that.

I do think you're at least exaggerating what Williams did. He ran ads paid for by a PR firm. The PR firm was paid by the government to promote NCLB. That doesn't amount to Williams being on the government payroll. He didn't even know the government connection until the news reports. There was an agreement to talk more about his views on NCLB, and part of it was to ask other pundits to do the same, which is the only really unusual thing about this. Pundits normally don't do that sort of thing (at least as far as public knowledge goes), but it's in many ways similar to what NPR does. They accept money in exchange for focusing on certain issues. The only difference is the amount of money. So he's probably right in calling this a gray area. I don't think it's clearly wrong, and if it is it's nowhere near as bad as people are making it look. It's not as if Bush or even Paige personally handed him a check to promote a view that he wouldn't otherwise have taken. What actually happened was fairly insignificant in comparison to that. That doesn't make it clearly ok, but any problem seems to me to be in not making it known that he was being paid (not even in who was paying it).

It's also worth recognizing that if the DOE was wrong to hire a company to promote their policy, then it's been wrong for all the government administrations to have done that in the past. A libertarian shouldn't like this, but there are lots of things libertarians don't like about how the government operates. I don't see how this is much different from using government funds to do other things libertarians don't like. It's inappropriate use of tax funds, according to libertarianism, but it's not corruption any more than it was corruption for Reagan to pay for anti-drug ads. The only thing resembling corruption is Williams' not making public that he was being paid.