OK — My Bad — But I Get To Keep My Job
“I really don’t believe making mistakes means you have to give up your career,” Representative Charles B. Rangel said at a news conference in Washington on Wednesday.
Already dealing with the backdraft from several other scandals, eternal Harlem Congressman and immensely powerful Chairman of the House Ways and Means Committee Charles Rangel has now acknowledged that he failed to pay tax on rental income from a Dominican Republic resort condo (the acquisition of which is already under separate scrutiny). That’s a long sentence, I know, but it’s carrying a lot of information; just as the jaunty, dapper, gravelly-voiced Chairman appears to be carrying a lot of baggage.
The 19-term Congressman was first elected in 1970, replacing the legendary Adam Clayton Powell; his first assignment was to the Judiciary Committee, and in 1974 he was part of the Impeachment Inquiry. He has been re-elected with scarcely even token opposition ever since.
The rental income-tax story is reported in today’s New York Times:
Representative Charles B. Rangel paid no interest for more than a decade on a mortgage extended to him to buy a villa at a beachfront resort in the Dominican Republic, according to Mr. Rangel’s lawyer and records from the resort.
The loan was given to him by the resort development company, in which Theodore Kheel, a prominent New York labor lawyer, was a principal investor. Mr. Kheel, who has given tens of thousands of dollars to Mr. Rangel’s campaigns over the past decade, had encouraged the congressman to be one of the initial investors in the project.
In fact, it was the New York Post that broke the story — and that has been on “Tricky Charlie’s” (as they style him) finances and living arrangements like a Weimaraner on a pork chop for the last several months.
Chairman Rangel is far and away the biggest recipient of contributions from lobbyists in the New York delegation (and that sets a very high standard indeed.) In the first half of this year he took in almost three quarters of a million dollars in this manner.
The DNC returned a $100,000 check he gave from the money raised at his 77th birthday party fundraiser. (The party, held at The Tavern on the Green in August 2007, raised more than $1 million.) The technicality was that it went against the Obama campaign’s decision not to accept any PAC-related money, but it was widely seen as a serious slap at the formerly sacrosanct Chairman.
Its namesake’s way of supporting the Charles B. Rangel Center for Public Service at the City College of New York doesn’t, in the words of the Washington Post, “pass the smell test”. The paper editorialized about “Rep. Rangel’s Tin Cup”:
In the corridors of money and power in New York City, Rep. Charles B. Rangel (D-N.Y.), is called simply “Mr. Chairman.” Everyone knows that he’s chairman of the House Ways and Means Committee. With his sway over tax and trade policy, captains of industry around the country are eager to have his ear. So when a letter from Mr. Rangel, especially if it’s on his congressional stationary, arrives, the 19-term Harlem congressman receives close attention.
As Post staff writer Christopher Lee reported Tuesday, Mr. Rangel has been requesting meetings with business and philanthropic leaders since 2005 to discuss the Charles B. Rangel Center for Public Service at the City College of New York. It’s a $30 million facility Mr. Rangel says is dedicated to ensuring that the next generation of public servants reflects America’s diversity and “will allow me to locate the inspirational aspects of my legacy in my home Harlem community.” So far, $12.2 million has been raised. That includes a $1.9 million earmark, $690,500 in grants from the Department of Housing and Urban Development, $100,000 from the New York City Council, $7.1 million from foundations and $2.3 million from individuals. The largest single gift ($5 million) came from the C.V. Starr Foundation, which is chaired by Maurice R. “Hank” Greenberg, a former head of insurance and financial services giant AIG. Mr. Rangel and college officials had a separate meeting with AIG this year, and another gift is under consideration.
Mr. Rangel’s actions raise a couple of red flags. First, House rules forbid solicitations on official letterhead, even for nonprofits. At a minimum, he should stop this practice. Next, Mr. Rangel says that congressional business never comes up at his meetings. We’ll take him at his word. But those with business before Mr. Rangel’s committee could try to curry favor with him by donating to the Rangel Center. The appearance problem here is huge.
Charlie Rangel is a colorful and engaging figure. He’s the first to admit that “modesty is not really my best trait.” Before the 2004 he joked to voters that, if he became a powerful Committee Chair, “I don’t want to be treated differently than any other world leader.” You can get an example of his winning ways on this interview given just as he was poised to assume his Chairmanship back in 2007.
Last July it was revealed —again by the New York Post— that Mr. Rangel, whose declared net worth was in the high six figures, was living in four apartments in Manhattan that were rent-stabilized in order to help low income tenants find decent housing. I wrote about this story here at the time.
Even The Times’ usually restrained prose (especially where powerful Manhattan Democratic Committee Chairs are involved) showed some righteous indignation at the patent unfairness (and political foolhardiness) of Mr. Rangel’s living arrangements:
While aggressive evictions are reducing the number of rent-stabilized apartments in New York, Representative Charles B. Rangel is enjoying four of them, including three adjacent units on the 16th floor overlooking Upper Manhattan in a building owned by one of New York’s premier real estate developers.
The Olnick Organization and other real estate firms have been accused of overzealous tactics as they move to evict tenants from their rent-stabilized apartments and convert the units into market-rate housing.
The current market-rate rent for similar apartments in Mr. Rangel’s building would total $7,465 to $8,125 a month, according to the Web site of the owner, the Olnick Organization.
Mr. Rangel, the powerful Democrat who is chairman of the House Ways and Means Committee, uses his fourth apartment, six floors below, as a campaign office, despite state and city regulations that require rent-stabilized apartments to be used as a primary residence.
Mr. Rangel, who has a net worth of $566,000 to $1.2 million, according to Congressional disclosure records, paid a total rent of $3,894 monthly in 2007 for the four apartments at Lenox Terrace, a 1,700-unit luxury development of six towers, with doormen, that is described in real estate publications as Harlem’s most prestigious address.
It’s one thing to to have a sweetheart deal of a questionable nature. It’s quite another thing to flaunt it in a lavish rich-and-famous lifestyles coffeetable book. What could have been the thought processes behind inviting the photographer over for that gig?
Me? I’m of two minds about all this. At least I think I am; and, if I am, then it’s at least two. As a New Yorker, I’m long-accustomed to Mr. Rangel’s colorful ways and means and have developed what amounts to an affection for him. He can be bombastic and he can be outrageous. He’s one of the last lions left over from the old days when outsize personalities were not uncommon; and, if you had the right stuff to back them up, they were widely admired. He is known as a prodigiously hard worker; a good boss; an excellent constituent services provider; and as the kind of all around good guy that is sadly missing and sorely missed around Washington these days.
He is a heart-on-sleeve liberal partisan, many (if not most) of whose positions I couldn’t disagree with more. But whether you agree with him or not, you know where he stands and you can depend on him to stand up for what he believes in.
Given the unbelievable extent to which all Congresspersons —much less senior Democrats and powerful Committee Chairmen— are isolated from the realities of ordinary daily life while their asses are kissed six ways til Sunday 24/7/365, he has remained refreshingly accessible and good-natured. And, at least based on what has surfaced so far, he is probably still only in the mid single digits on a ten point run-of-the-mill congressional corruption scale.
He has a very compelling personal story that he set down in an autobiography published earlier this year: And I Haven’t Had A Bad Day Since. It got such good reviews and word of mouth that I actually bought a copy. Although I ended up skimming a lot of the political boilerplate towards the end, the earlier sections were vivid and candid. They include the tales of a somewhat misspent youth, a spell in the Army in Korea where he won a Purple Heart (his reaction to that incident gave the book its title), and the beginnings of a hugely successful career in politics.
But what about his current arguments that he didn’t know about his tax obligations and that he thought his accountants and lawyers were handling everything. I suppose they’re OK as far as they go. The question is: how far do they go? After all, the man is generally acknowledged to be brilliant; he’s a graduate of NYU’s School of Commerce and St. John’s Law School; and he’s surrounded by very large and capable staffs entirely devoted to his continuance in office. And he hasn’t got to where he is by being inattentive to details.
This ignorance defense is very popular on Capitol Hill these days. In the last few months it has been invoked by Senate Banking Committee Chairman Chris Dodd and Senate Budget Committee Chairman Kent Conrad to explain the highly favorable non-competitive rates they got on mortgages for second homes from a lender who had business with their Committees.
What level of responsibility —and accountability— should attach to legislators who are in charge of regulating the nation’s banks and writing the nation’s tax laws and who claim ignorance as their defense when serious questions are raised about their financial and tax affairs?
The tide seems to be turning against Mr. Rangel these days. Slowly now, to be sure; but perceptively gaining speed. His fund-raising prowess, formerly admired, is under investigation. Ethics Committee involvement is under way. His ardent support for Senator Clinton’s presidential bid has left him naked to his enemies at the Obamaized DNC. And it can never be a good sign when you hire Lanny Davis as your defense attorney.
The admirable philosophy that has brought him so far for so long is about to be sorely tested: Charlie Rangel is about to have some very bad days.
UPDATE 9/13/08: In today’s Wall Street Journal, Eileen Norcross has an interesting column about rent control and stabilization in the New York City housing market.