Monday, October 5, 2009
The case against Charlie Rangel
The case against Charlie Rangel
By ISABEL VINCENT and MELISSA KLEIN
Last Updated: 4:30 AM, October 4, 2009
On April 9, 1965, a 34-year-old lawyer named Charles Rangel took out a low-interest mortgage to renovate his childhood home — a row house on West 132nd Street that he had just inherited from his grandfather.
The $39,350 loan came from a New York City program to develop low-income housing. Rangel and his sister Frances were to use the money to turn the family home in Central Harlem, which Rangel affectionately called Buckingham Palace, into six apartments.
While Rangel may have thought he scored a sweetheart deal, the loan came back to haunt him during his first run for Congress in 1970. An opponent in the Democratic primary accused him of violating the conditions of the mortgage because he was living in one of the apartments that were supposed to be rented only to poor people,
“If Charlie Rangel is low income, then we have a new crisis in this country,” Jesse Gray, a longtime housing activist, charged.
Rangel brushed aside the accusations, and went on to defeat both Gray and Adam Clayton Powell, who had held the Harlem congressional seat since 1944.
But even as he celebrated his victory, the loan dogged the young, ambitious politician. City and federal investigators launched a probe into the dealings of the $135 million Municipal Loan Program, which was set up to give loans to building owners who couldn’t otherwise get funding to rehabilitate their properties. The Post, in a front-page story in July 1971, fingered the newly minted Congressman and another elected official in the scandal.
Rangel denounced the accusations by attacking the “yellow journalism” of The Post and said that he didn’t see anything wrong with living in a Harlem apartment renovated with money reserved for poor people. He also said he was not a public official when he received the 1965 loan.
“The New York Post has the power to destroy,” said Rangel at a 1971 press conference in his Harlem office. “I received a loan to rehabilitate a building I lived in all my life, to rebuild my homestead where five low-income families now live.”
But even people who should have been his political allies were upset.
“I am shocked that Congressman Rangel, who has a Congressional budget of more than $200,000 a year, has used thousands of dollars of New York City money to feather his own nest when welfare recipients are being thrown out into the streets or being forced to live in squalid hotels,” said Leonard de Champs, chairman of Harlem’s Congress of Racial Equality, a civil rights group.
So it would go for Charlie Rangel over the next four decades — a pattern of tax evasion, special treatment and enrichment that seemed to increase with his power and prestige in Congress. Whether it’s living in rent-stabilized apartments while making a hefty salary, or failing to disclose hundreds of thousands of dollars in earnings and assets, his actions betray a consistent, defiant sense of entitlement. And when he is caught, the powerful Democrat blames a right-wing conspiracy.
Never mind that his critics are often independent, or even liberal.
“Although Charlie Rangel has an admirable record over 40 years, none of that excuses his reprehensible ethics violations,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a non-partisan government watchdog group that since 2008 has included Rangel on its list of the most corrupt members of Congress. “There is a pattern of violations that suggest at a minimum carelessness and arrogance that he doesn’t think the rules apply to him.”
The Harlem row house loan was only the first step in Rangel’s history of playing fast-and-loose with real estate.
In 1971, soon after his arrival in Washington, Rangel and his wife Alma purchased a four-bedroom house on North Colorado Avenue.
During his nearly three decades of ownership, he applied for tax breaks in DC, declaring the property as his primary residence even as he still lived in the row house and later in a posh apartment complex in Harlem. Then, in 1989, he took out a $60,000 loan on his childhood home in New York, declaring that home to be his primary residence in order to obtain a low interest rate.
But a year earlier, he moved to Lenox Terrace, scoring a giant rent-stabilized apartment — two units combined into one — the kind of perk New Yorkers covet. He later leased a small studio on the same floor and yet another apartment in 1999 which he used as a campaign office. Since it was built in 1958, Lenox Terrace has been the home of prominent politicians, such as former Manhattan borough president Percy Sutton, former New York secretary of state Basil Paterson and his son New York governor David Paterson.
Rangel was listing three addresses as his primary residence, and, at least between 1995 and 2000, getting tax breaks because of it.
Meanwhile, Rangel began to distinguish himself as an important power broker on Capitol Hill. He was a founder of the Congressional Black Caucus, and, as a member of the Judiciary Committee, participated in Richard Nixon’s impeachment hearings. He later championed tough measures to combat drug trafficking. As a member of the tax-writing Ways and Means Committee, he advocated for low-income housing tax credits which fueled a boom in affordable housing.
Two years ago, Rangel rose to the height of his power, when he became chairman of Ways and Means. His National Leadership PAC is an important fundraising tool for the Democratic Party and he has become a foreign policy leader in forging business and trade ties with Caribbean nations.
As he rose through the ranks, Rangel made important friends along the way, among them Theodore Kheel, the prominent New York labor lawyer and businessman. In 1987, Kheel gave Rangel an interest-free loan on a beachfront villa in a resort Kheel and his partners were developing in the Dominican Republic.
Once again, Rangel’s real estate pursuits led to some hard questions. The Congressman used the vacation home a few times a year, renting it out during the peak holiday seasons. Last year, The Post revealed Rangel’s failure to fully disclose rental income on the villa. In a press conference, Rangel admitted that he had failed to declare $75,000 in rental income, and later paid the IRS and New York State $10,800 in back taxes.
But this time the scandal did not go away so easily. He was already on the hot seat for his use of the four rent-stabilized apartments in Lenox Terrace. Rangel gave up the campaign office, admitting that it “presents an issue.” Rent stabilization rules require that tenants use their apartments as a primary residence.
Last September, the Ethics Committee launched a wide-ranging investigation looking at the Caribbean property, among other issues.
The probe also focuses on his use of Congressional stationery to solicit donations from corporations and private foundations for the Charles B. Rangel Center for Public Service at City College in New York. Later, the investigation widened to include what critics referred to as among his most egregious ethical lapses — his efforts to preserve a tax loophole for Nabors Industries, an oil drilling company, at the time that its chief executive pledged $1 million in donations for the Rangel Center, which opened in 2008.
“Rangel looks more and more like a clown car in a circus,” said a source close to the ethics probe. “Nobody knows how this is going to end.”
Or when it will end.
The probe is multiplying. It also includes questions about Rangel’s participation in junkets to the Caribbean sponsored by corporations and lobbyists, a violation of House rules. Even his car did not escape scrutiny, as Ethics Committee members ponder why he parked his vintage Mercedes for free in a House garage. In August, Rangel amended his required financial disclosure forms for 2002 through 2006, acknowledging that he omitted as much as $780,000 in assets in previous filings. He also apparently forgot on earlier filings to disclose two small vacant lots in Glassboro, N.J., land on which he owed back taxes. He paid the $164 bill the next month, after The Post revealed the debt.
Sources say that the Ethics Committee, which has been hampered by staffing issues over the past year, may vote to widen the Rangel probe even further to include an investigation into Rangel’s former childhood home — the now dilapidated row house in Harlem.
Among the issues that have recently surfaced about the brick building are Rangel’s failure to disclose any rental income for eight years, between 1993 and 2000 — a period during which The Post found tenants were living there.
In 2004, Rangel sold the row house to the First AME Church Bethel for $410,000. But Rangel left open three building code violations for failing to file an annual boiler inspection report. He owes $1,500, according to the city’s Department of Buildings.
Earlier this year, Rangel wrote a letter supporting the church’s application for low-income housing tax credits in order to renovate an apartment building on the same street, The Post found.
A source close to the Ethics Committee says Rangel’s support of tax credits for the church’s proposed $9 million renovation amounts to a conflict of interest since the Congressman had a business relationship with the pastor, the Rev. Henry Belin III.
But while Rangel acknowledges that he may have been sloppy in his accounting records, his office has repeatedly refused to answer any specific questions on his real estate transactions.
Early on, in order to get ahead of a scandal, Rangel himself called for the Ethics Committee probe. He initially blamed his wife Alma, who handled the family finances, for the Dominican villa omissions and cited cultural and language barriers in his failure to disclose rental income. Although he hired a forensic accountant to scour 20 years worth of finances, he stopped short of making his tax returns public.
When all else fails, Rangel tends to go back to his favorite target: A media conspiracy.
Once again, Rangel denounced The Post, saying that he was the victim of conspiracy theories concocted by the Congressman’s political enemies.
“The Post’s persistent and vicious attacks are an effort to undermine Democratic leaders who are trying to enact health care reform and to undo the damage done to this country by the Bush Administration,” said Emile Milne, his spokesman.
After 19 terms in Congress, won with easy victories in his district, Rangel may believe he is immune to criticism. But the mounting evidence could prove too much.
“Congressman Rangel’s record of unpaid taxes, false financial disclosure reports and hidden assets has been unfolding for more than a year,” said Ken Boehm, chairman of the National Legal and Policy Center, a conservative ethics group that has filed several complaints against Rangel. “Speaker Pelosi has done nothing to remove him as Chairman from the House committee that writes the tax laws. Apparently, there is one set of laws for powerful Congressmen and another for everyone else.”
Republicans, watchdog groups and editorial boards have called for Rangel to resign his chairmanship of the tax-writing Ways and Means Committee — demands which have intensified in recent weeks.
“To allow Mr. Rangel to continue to serve as chairman is the same as allowing a confessed bank robber to serve as chairman of the Banking Committee during the trial,” Republican Congressman John Carter said last week.
Carter said that if Rangel did not resign, he would introduce a resolution to force his removal.
Posted by Brett at 9:33 AM