Charles Rangel: When It Rains, It Pours

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Back in July, the New York Times and the New York Post appeared in competition for which publication could roll out the most damaging story about House Ways and Means Committee Chairman Charles Rangel. Four months later and they’re back at it.

Yesterday, the Post reported the Rangel receives a tax benefit on his home in D.C. that is intended for home owners and residents of the District of Columbia. Unfortunately for Rangel, he also receives perks in his Harlem home district, where he owns multiple rent-stabilized apartments. Both benefits require that the resident operate their home as a “primary residence.” So, where is it that you live congressman? Harlem? Or Washington? (FYI, we don’t have congressional representation here. So, if it was Washington, you’d be out of a job.)

The Times adds the pile-on today, with a much more serious story. Rangel, a long time opponent of off shore tax shelters, has, in recent years, sought to protect the tax shelter status of an oil-drilling company whose chief executive promised $200,000 to help fund the creation of the Charles Rangel School of Public Service at C.C.N.Y.:

Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.

The company, Nabors Industries, was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments. Mr. Rangel was among dozens of representatives from both parties who bitterly opposed those offshore moves and, in 2004, pushed unsuccessfully for legislation to make the companies pay more tax.

But in 2007, when the United States Senate tried to crack down on the companies, Mr. Rangel, who had recently been sworn in as House Ways and Means chairman, fought to protect them. The tax shelter for the four companies was preserved, saving Nabors an estimated tens of millions of dollars annually and depriving the federal treasury of $1.1 billion in revenues over a decade, according to a Congressional analysis by the nonpartisan Joint Committee on Taxation.

Rangel is already facing an ethics investigation targeting his solicitation for funding for the Rangel Center and his rent stabilized apartments. This revelation, while the congressman claims there is “no quid pro quo,” could do great harm to his stature in Congress. The Politico goes as far as to ponder whether President Obama will want to work through a scandal tarred committee chairman.

Back to the allegations in the Times article. Members of Congress and private interests have long stated that contributions by the latter to charitable interests connected to the former are nothing but simple good will. The understanding, as evidenced by the Times’ reporting, that these contributions constitute an unregulated form of influence seeking led Congress to finally establish some disclosure requirements.

The biannual lobbyist contribution forms mandated under the Honest Leadership and Open Government Act require the disclosure of contributions to entities if they are named after, in recognition of, established, maintained, or controlled by an elected representative. If that is the case, then the Rangel School has not received any contributions so far this year. Unless, of course, some groups are skirting the disclosure requirements.

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