WSJ Highlights NLPC’s Efforts to Expose Rangel’s Tax Evasion

The lead editorial in today’s Wall Street Journal is titled “Morality and Charlie Rangel’s Taxes.” It begins:

Ever notice that those who endorse high taxes and those who actually pay them aren’t the same people? Consider the curious case of Ways and Means Chairman Charlie Rangel, who is leading the charge for a new 5.4-percentage point income tax surcharge and recently called it “the moral thing to do.” About his own tax liability he seems less, well, fervent.

Exhibit A concerns a rental property Mr. Rangel purchased in 1987 at the Punta Cana Yacht Club in the Dominican Republic. The rental income from that property ought to be substantial since it is a luxury beach-front villa and is more often than not rented out. But when the National Legal and Policy Center looked at Mr. Rangel’s House financial disclosure forms in August, it noted that his reported income looked suspiciously low. In 2004 and 2005, he reported no more than $5,000, and in 2006 and 2007 no income at all from the property.

We were delighted when Rangel admitted to failing to report and disclose his rental income, but we were puzzled that the media simply accepted Rangel’s figure of $75,000 when it appeared the total was much higher.

We have provided additional information about this income in a Complaint to the Internal Revenue Service. Maybe Rangel realizes that his estimate of unreported and undisclosed income will not fly. As the Journal points out:

Mr. Rangel promised last fall to amend his tax returns, pay what is due and correct the information on his annual financial disclosure form. But the deadline for the 2008 filing was May 15 and as of last week he still had not filed. His press spokesman declined to answer questions about anything related to his ethics problems.

Besides not paying those pesky taxes, Mr. Rangel had other reasons for wanting to hide income. As the tenant of four rent-stabilized apartments in Harlem, the Congressman needed to keep his annual reported income below $175,000, lest he be ineligible as a hardship case for rent control. (He also used one of the apartments as an office in violation of rent-control rules, but that’s another story.)

Mr. Rangel said last fall that “I never had any idea that I got any income’’ from the villa. Try using that one the next time the IRS comes after you. Equally interesting is his claim that he didn’t know that the developer of the Dominican Republic villa had converted his $52,000 mortgage to an interest-free loan in 1990. That would seem to violate House rules on gifts, which say Members may only accept loans on “terms that are generally available to the public.” Try getting an interest-free loan from your banker.

The editorial notes another NLPC-exposed instance of Rangel cheating on his taxes:

The National Legal and Policy Center also says it has confirmed that Mr. Rangel owned a home in Washington from 1971-2000 and during that time claimed a “homestead” exemption that allowed him to save on his District of Columbia property taxes. However, the homestead exemption only applies to a principal residence, and the Washington home could not have qualified as such since Mr. Rangel’s rent-stabilized apartments in New York have the same requirement.

The House Ethics Committee is supposedly investigating Rangel’s tax evasion, as well as a Rangel-led, Citigroup-funded junket to the Caribbean, also exposed by NLPC. Add to the list the propriety of donations to the so-called Charles B. Rangel Center for Public Service at City College of New York.

Until recently, Rangel was predicting an imminent and total exoneration by the Ethics Committee. This prediction was echoed by Eugene Isenberg, the Chairman of Nabors Industries, when I confronted him at the Nabors’ annual meeting on June 2. Isenberg made a million dollar pledge to the Rangel Center at the same time Rangel was preserving a lucrative tax break for the company.

Rangel and Isenberg may be right. The Ethics Committee, under the thumb of House Speaker Nancy Pelosi, is perfectly capable of clearing tax-evader Rangel of wrongdoing, even as Congress levies big, new taxes on the American people.

photo: AP/Wide World