Rangel Trial Will Focus on Corporate Favors From Tax Committee, Former Chairman Sought $30 Million Donations by Gregory Hilton

February 2009, the President and Rep. Charles Rangel (D-NY) are shown in the East Room of the White House. In the center is the late Sen. Ted Kennedy (D-MA). This was Rangel's highpoint. The next month he would lose his Chairmanship of the most influential committee on Capitol Hill.

The House Ethics Committee yesterday released an in-depth report on its 21-month investigation into the financial dealings of Rep. Charles Rangel (D-NY). Rangel is the former Chairman of the powerful Ways and Means Committee, and the report describes how he used that role to request contributions of $30 million a piece from many of the nations top corporations. The recipient was his vanity project at City College of New York (CCNY) which was intended to be similar to a presidential library.
Now the embattled Congressman faces a public trial which will focus on 13 charges. The report accuses him of violating various House rules and several federal statutes. Rangel did not attend the hearing but his attorneys issued a 32-page rebuttal.
The alleged violations include legislative favors for donors to the planned Charles Rangel Center for Public Policy at CCNY; failing to report more than $600,000 on his financial disclosure report; failing to pay taxes on rental income from a villa he owns in the Dominican Republic; and using a rent controlled apartment he owns as a campaign office.
Rangel called the charges a “public lynching”, and said the report contained “no inference of corruption.” He repeatedly said he will fight the charges and be cleared of any wrongdoing.
Prospects for a Deal
Many observers were expecting Rangel to seek a deal which would have avoided a public trial. The trial will undoubtedly be harmful to House Democrats, and it is an embarrassment for Speaker Nancy Pelosi who promised “the most ethical Congress ever.” Surveys demonstrate that Republicans suffered significantly in 2006 when several of their Members were found guilty of ethics violations.
The time frame for a deal has apparently closed and it would have required the support of at least one Republican. The investigation would end if Rangel resigned, but he clearly has no intention of following that path. “We are now in the trial phase,” ethics panel member Mike McCaul (R-Texas) said. In fact, staff members for the ethics panel met yesterday to map out logistics for a Rangel trial.
Ethics Committee Investigation
The investigation itself was all inclusive, involving more than 28,000 pages of documents, and 50 depositions. The Committee issued over 160 formal requests for documents, and held over 60 meetings on the matter.
Rep. Jo Bonner (R-AL), the co-chairman of the investigative panel, said “Mr. Rangel was given multiple opportunities to settle this matter. Instead, he chose to move forward into this public trial phase.”
The Allegations
Yesterday’s “Statement of Alleged Violations” focused in large part on the Congressman’s role in raising over $9 million in donations for the Charles B. Rangel Center for Public Service. He was seeking contributions as large as $30 million from various corporations and foundations.
A major problem is that many of these businesses were involved in legislation pending before the Ways and Means Committee.
The Committee is charging him with seeking financial support from Eugene Isenberg, the chief executive of Nabors Industries, an oil company which was seeking a $500 million tax break. Rangel opposed the tax break in February of 2007, but later changed his mind.
The Committee says this happened after Isenberg pledged $1 million to the Rangel Center. Rangel met with Isenberg on the same day Ways and Means voted to give him the huge tax break. Eleven days later, City College received a $100,000 contribution from Isenberg.
Other large donors were The Ford Foundation which gave $1 million, American International Group which contributed $5 million, and Verizon which donated $500,000. Rangel also secured a $2.1 million earmark from his Congressional colleagues.
What Will Happen Now?
The House of Representatives is about to begin a six week recess. When they return in mid-September the Rangel trial will be held before the Ethics Committee. It will be similar to a court room proceeding.
The Harlem Congressman has already spent $1.9 million on his legal defense and his attorney’s will be able to call witnesses and present evidence similar to a court room. The Chairman of the Ethics Committee, Rep. Zoe Lofren (D-CA), will serve in a role similar to a judge.
The ethics panel is evenly divided between Democrats and Republicans. At the conclusion of the trial the committee will vote to determine if he is guilty on each count. If Rangel is found not guilty than the allegation will be dismissed. If he is found guilty then the full House will vote on a punishment which could include expulsion.
The Congressman was compelled to give up his Ways and Means chairmanship last March after being reprimanded in a separate probe involving corporate-financed travel to the Caribbean. Rangel was a former Assistant U.S. Attorney and state Assemblyman 40 years ago when he used ethics issues to oust legendary Congressman Adam Clayton Powell in the 1970 Democratic primary.
Powell was the first black Congressman from New York. In fact, he was the first from any northern state other than Illinois in the post-reconstruction era. Powell was frequently in hot water with the Ethics panel, but the Supreme Court ruled the House had acted unconstitutionally when it excluded Powell in 1967. Rangel defeated Powell by just 150 votes, and has never faced a serious election since that time. One of Rangel’s four Democratic challengers in this years September 14th primary is Adam Clayton Powell IV, the son of his predecessor.
Today’s Editorial Reaction:
Washington Post: “The catalogue of alleged abuses bespeak a politician who enjoyed power and grew overly comfortable wielding it however he saw fit. In fact, the most damning charge by the investigative subcommittee is ‘respondent’s pattern of indifference or disregard for the laws, rules and regulations of the United States and the House of Representatives.'”
Wall Street Journal
: “The larger picture here is of a Congressman who came to see himself across his 40-year career as a political baron whose stature made him immune from the rules everyone else lives by. . . it is hard to see how Mr. Rangel can in good conscience remain in office.”
USA Today: “At best, Rangel’s actions look like self-serving arrogance and extreme sloppiness. At worst, Rangel knew exactly what he was doing and saw nothing wrong with shaking down people for contributions and rewarding them with tax breaks. Failure to properly file taxes is particularly egregious; it’s simply untenable to have a man in charge of tax law fail to follow it himself.”

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